Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Friday, August 8, 2008

Causation in EC Merger Control

Posted by D. Daniel Sokol

Antonio F. Bavasso (Allen & Overy and University College London - Law) and Alistair Lindsay (Allen & Overy) provide some thoughts on Causation in EC Merger Control.

ABSTRACT: This article looks at two areas of merger control under EC Law where the principles of causation are applied and, in our view, misapplied. The article traces the development of the concept of the counterfactual in antitrust law. It then draws on this analysis in considering the operation of the failing firm defense, and in particular the standard of proof employed by the Commission when analyzing the counterfactual in relation to the failing firm defense. We argue that the Commission employs an excessively high standard of proof, and that this standard of proof contributes to the drawing of the failing firm defense too narrowly, through a misapplication of the principles of causation. We then proceed to contrast and prefer the approach of the UK Competition Commission in recent cases. In the final part of the article we consider scenarios where two or more mergers are contemplated in the same market at the same time, in cases of both parallel and overlapping mergers. In these complicated scenarios, which require prospective, multifaceted analysis, we set out in detail how, despite inherent difficulties, a similarly rigorous application of the principles of causation produces coherent results.

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