Friday, August 23, 2013

Close Competitors in Merger Review

Posted by D. Daniel Sokol

Stefan Thomas, Eberhard Karls University Tubingen explores Close Competitors in Merger Review.

ABSTRACT: The analysis of unilateral effects in horizontal mergers—especially on markets for differentiated goods—can take into consideration the extent to which the merging firms are close competitors. The elimination of a close competitor can result in an upward pricing pressure (UPP) on the merged firm which can harm consumers. Although UPP analysis is an important enhancement of substantive merger appraisal, it should not be considered sufficient in itself for the finding of a significant impediment to effective competition in terms of Article 2 of the EU Merger Regulation (EUMR).

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