Friday, May 21, 2010
Posted by D. Daniel Sokol
The OECD has published its Roundtable discussion on Standard for Merger Review.
ABSTRACT: Most competition authorities rely on one of two main tests applied to assess whether a merger has anti-competitive effects: (i) the dominance test; and (ii) the significant lessening of competition (SLC) test. Some have a hybrid test. There may be a difference in the scope of the dominance and SLC standards, whereby the assessment of certain situations could lead to different outcomes depending on which test is used. Many jurisdictions have changed and others are contemplating changing the legal standard for the review of mergers from a standard based on the creation or strengthening of a dominance position to an SLC standard. No country reported changing over the last twenty years from the SLC standard to the dominance standard. While for most countries the change to an SLC test has made little difference in their practice, it has nevertheless made an impact on various aspects of merger review. Overall, the experience with changing from dominance to an SLC standard has been positive.