Assessing the Consequences for Competition
INTRODUCTION This book presents the results of our research into the competitive impact of merger remedies and how current practice can be improved. It provides a signiﬁcant extension to the empirical literature by focusing on how basic simulation can be used as a practical methodology in this context. This is illustrated by detailed analysis of seven recent mergers in the paper and pharmaceuticals sectors. We also provide a substantial review of the emerging literature, which is currently very dispersed. This chapter summarizes our results and draws together our conclusions. In Section 9.1, we set out the three main objectives of our research. First, we wanted to develop a practical methodology for assessing the eﬀectiveness of remedies agreed by a competition authority as a condition for allowing a merger to proceed. Second, because it is not possible to consider remedies without ﬁrst assessing expected competitive harm, we wanted to compare our basic simulation methodology with the Commission’s starting point of market share analysis. Third, we wanted to take advantage of the parallel ex post study by DG Competition and modify our conclusions in the light of the practical problems of remedy implementation. Starting with the logically prior second of these, we set out our main ﬁnding on each in the following three sections. Section 9.4 then develops what we believe to be an appropriate and practical set of recommendations. 9.1 IDENTIFYING SIGNIFICANT IMPEDIMENT TO EFFECTIVE COMPETITION (SIEC): BASIC SIMULATION VERSUS THE COMMISSION’S MARKET SHARE PRACTICE Before even considering remedies,...
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