Friday, December 25, 2015
Joseph A. Clougherty, University of Illinois at Urbana-Champaign; Centre for Economic Policy Research (CEPR), Tomaso Duso, German Institute for Economic Research (DIW Berlin); Duesseldorf Institute for Competition Economics (DICE), Miyu Lee, Humboldt University of Berlin - School of Business and Economics, and Jo Seldeslachts, University of Amsterdam; Tinbergen Institute ask Effective European Antitrust: Does EC Merger Policy Generate Deterrence?
ABSTRACT: We estimate the deterrence effects of European Commission (EC) merger policy instruments over the 1990-2009 period. Our empirical results suggest that phase-1 remedies uniquely generate robust deterrence as – unlike phase-1 withdrawals, phase-2 remedies, and preventions – phase-1 remedies lead to fewer merger notifications in subsequent years. Furthermore, the deterrence effects of phase-1 remedies work best in high-concentration industries; i.e., industries where the HHI is above the 0.2 cut-off level employed by the EC. Additionally, we find that phase-1 remedies do not deter clearly pro-competitive mergers, but do deter potentially anti-competitive mergers in high-concentration industries.