Wednesday, March 28, 2007
US vs. EU merger regimes: US is more predictable and tougher on strong dominance and oligopoly cases
Posted by D. Daniel Sokol
I recently covered US vs. EU merger control systems in my international and comparative antitrust class. A cross Atlantic team of scholars has compared the two systems with interesting results in a paper entitled Comparing Merger Policies: The European Union versus the United States.
Abstract: Merger regulation
affects large transactions in the market for corporate control in both the
European Union (EU) and the United States (US). This paper compares the merger
enforcement policies of the two regions using descriptions of the merger
investigations prepared by the staff of the EU and the Federal Trade Commission.
The policies are found to share a common foundation with substantial weight
being placed on both the market structure characteristics and the likelihood of
US enforcement was broader-based in that it scrutinized markets that might be characterized as raising oligopoly, unilateral, and dominant firm concerns, while the EU policy focused largely on market dominance. Neither regime is found to be stricter in all circumstances, since the market and firm characteristics impact the enforcement decisions differently. However, we find that the regime is more predictable (given our measures of the explanatory variables), tougher on strong dominance cases and oligopoly cases, but more permissive on weak dominance cases.