Edited by Josef Drexl, Laurence Idot and Joël Monéger
Chapter 13: Efficiency in Merger Law: Appropriateness of Efficiency Analysis in Ex-ante Assessment?
13. Eﬃciency in merger law: appropriateness of eﬃciency analysis in ex-ante assessment? Daniel Zimmer* 1 PRESUMPTION OF EFFICIENCY OR INDIVIDUAL ASSESSMENT? We are aware of not just one way of taking into account eﬃciency considerations in merger control, but rather of two. We may distinguish a more general concept, sometimes referred to as the ‘general-presumption approach’, on the one hand, and an individual eﬃciency assessment on the other hand. The traditional ‘dominant-position’ test is often understood as being part of a general-presumption approach. There is, following this line of thought, a general presumption that mergers bring about some eﬃciency gains. If they did not, the argument goes, ﬁrms would not merge. This assumption is, however, highly dubious. It presumes rational conduct by directors in the best interests of their companies, and neglects motives such as personal vanity and management’s wish to be among the major ﬁrms in the market. According to a study by the consulting ﬁrm McKinsey, 70 per cent of mergers fail to achieve expected revenue synergies. In one quarter of the analysed transactions, managers overestimated cost synergies by at least 25 per cent.1 The idea of a general-presumption approach is that we take into account presumed eﬃciency, and thus a welfare-enhancing eﬀect of a merger, by setting a relatively high threshold for prohibition: market dominance. If one does so, it seems logical that one should not recognize eﬃciency gains for a second time, by taking them into account on...
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