Friday, October 21, 2016

Effective European Antitrust: Does EC Merger Policy Generate Deterrence?

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 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, that is, industries where the Herfindahl Hirschman Index is above the 0.2 cut‐off level employed by the EC. Additionally, we find phase‐1 remedies do not deter clearly pro‐competitive mergers, but do deter potentially anti‐competitive mergers in high‐concentration industries.

https://lawprofessors.typepad.com/antitrustprof_blog/2016/10/effective-european-antitrust-does-ec-merger-policy-generate-deterrence.html

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