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Deal or no deal? Consensual arrangements as an instrument of European competition policy

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  • Budzinski, Oliver
  • Kuchinke, Björn A.

Abstract

Roughly during the last decade, European Competition Policy has undergone a series of fundamental changes. All four areas - cartel policy, merger policy, abuse control, and state aid control - have been subject to a modernization process, which led to a focus on analysing the effects of individual cases and established a tendency towards deciding each case on its individual merits. These changes can be understood as a move away from rule-based competition policy towards a case-by-case approach. The case-by-case approach especially includes consensual arrangements, so-called 'deals' between the competition authority and business companies. Therefore, this paper will discuss the pros and cons of 'deals' as an instrument of (European) competition policy. The paper's central focus lies on the economic analysis of the advantages and disadvantages of using consensual arrangements as a relevant instrument of European competition policy. With respect to European competition policy, we conclude that we need to issue a note of caution. From an economic perspective, an expansion of consensual elements necessarily walks hand in hand with a continual weakening of the protection of competition. Consumer welfare will not benefit from expanding the role and importance of consensual arrangements as a means of European competition policy. --

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Bibliographic Info

Paper provided by Ilmenau University of Technology, Institute of Economics in its series Ilmenau Economics Discussion Papers with number 76.

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Date of creation: 2012
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Handle: RePEc:zbw:tuiedp:76

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Keywords: European competition policy; consensual arrangements; antitrust settlements; merger control; deals; political economics;

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References

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  1. Budzinski, Oliver, 2012. "International antitrust institutions," Ilmenau Economics Discussion Papers 72, Ilmenau University of Technology, Institute of Economics.
  2. Oliver Budzinski, 2011. "Impact Evaluation of Merger Decisions," Working Papers 112/11, University of Southern Denmark, Department of Environmental and Business Economics.
  3. Oliver Budzinski, 2006. "An Economic Perspective on the Jurisdictional Reform of the European Merger Control System," Marburg Working Papers on Economics 200608, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  4. Oliver Budzinski, 2008. "Europäische Medienmärkte: Die Rolle der Wettbewerbspolitik," MAGKS Papers on Economics 200806, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Jo Seldeslachts & Joseph A. Clougherty & Pedro Pita Barros, 2009. "Settle for Now but Block for Tomorrow: The Deterrence Effects of Merger Policy Tools," Journal of Law and Economics, University of Chicago Press, vol. 52(3), pages 607-634, 08.
  6. Philippe Choné & Saïd Souam & Arnold Vialfont, 2012. "Commitments in Antitrust," EconomiX Working Papers 2012-9, University of Paris West - Nanterre la Défense, EconomiX.
  7. Shavell, Steven, 1993. "Suit versus Settlement when Parties Seek Nonmonetary Judgments," The Journal of Legal Studies, University of Chicago Press, vol. 22(1), pages 1-13, January.
  8. Shapiro, Carl & Farrell, Joseph, 2008. "Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition," Department of Economics, Working Paper Series qt35c5f846, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  9. Oliver Budzinski, 2009. "An International Multilevel Competition Policy System," Working Papers 83/09, University of Southern Denmark, Department of Environmental and Business Economics.
  10. Oliver Budzinski, 2007. "„Wettbewerbsfreiheit“ und „More Economic Approach“: Wohin steuert die Europäische Wettbewerbspolitik?," Marburg Working Papers on Economics 200713, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  11. Ascione, Aurora & Motta, Massimo, 2008. "Settlements in cartel cases," MPRA Paper 24416, University Library of Munich, Germany.
  12. Oliver Budzinski, 2010. "An Institutional Analysis of the Enforcement Problems in Merger Control," Working Papers 101/10, University of Southern Denmark, Department of Environmental and Business Economics.
  13. Polinsky, A. Mitchell & Rubinfeld, Daniel L., 1988. "The deterrent effects of settlements and trials," International Review of Law and Economics, Elsevier, vol. 8(1), pages 109-116, June.
  14. Oliver Budzinski & Gisela Aigner & Arndt Christiansen, 2006. "The Analysis of Coordinated Effects in EU Merger Control: Where do we stand after Sony/BMG and Impala?," Marburg Working Papers on Economics 200614, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  15. Stephen Breyer, 2009. "Economic Reasoning and Judicial Review," Economic Journal, Royal Economic Society, vol. 119(535), pages F123-F135, 02.
  16. Oliver Budzinski & Isabel Ruhmer, 2008. "Merger Simulation in Competition Policy: A Survey," MAGKS Papers on Economics 200807, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  17. Damien Neven & Miguel Mano, 2009. "Economics at DG Competition, 2008–2009," Review of Industrial Organization, Springer, vol. 35(4), pages 317-347, December.
  18. Perloff, Jeffrey M & Rubinfeld, Daniel L & Ruud, Paul, 1996. "Antitrust Settlements and Trial Outcomes," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 401-09, August.
  19. Oliver Budzinski, 2009. "Modern Industrial Economics and Competition Policy: Open Problems and Possible Limits," Working Papers 93/09, University of Southern Denmark, Department of Environmental and Business Economics.
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Citations

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Cited by:
  1. Budzinski, Oliver & Haji Ali Beigi, Maryam, 2013. "Competition policy agendas for industrializing countries," Ilmenau Economics Discussion Papers 81, Ilmenau University of Technology, Institute of Economics.
  2. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.
  3. Budzinski, Oliver, 2012. "Würde eine unabhängige europäische Wettbewerbsbehörde eine bessere Wettbewerbspolitik machen?," Ilmenau Economics Discussion Papers 78, Ilmenau University of Technology, Institute of Economics.

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