Monday, July 6, 2009
Did the European Union's Market Dominance Policy Have a Gap? Evidence from Enforcement in the United States
Posted by D. Daniel Sokol
Malcolm B. Coate, U.S. Federal Trade Commission (FTC) asks Did the European Union's Market Dominance Policy Have a Gap? Evidence from Enforcement in the United States.
ABSTRACT: The European Union (EU) and the United States (US) enforce the world's two best known merger policies. The EU addresses transactions that are likely to impede effective competition, historically, with some type of dominance analysis, while the US focuses on mergers that are likely to substantially lessen competition, using either a unilateral effects or coordinated interaction (collusion) analyses. Although EU regulators identified a gap in their policy relative to the US regime, it is unclear if the gap is material. This paper uses simulation analysis and a review of a sample of US merger analyses to show the EU gap is relatively small and limited to collusion analysis. Policy differences, due to regime-specific enforcement standards, remain possible, because the gap only alleged a difference in safe harbor policies.