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Assessing EU Merger Control through Compensating Efficiencies

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Listed:
  • Pauline Affeldt
  • Tomaso Duso
  • Klaus Gugler
  • Joanna Piechucka

Abstract

Worldwide, the overwhelming majority of large horizontal mergers are cleared by antitrust authorities unconditionally. The presumption seems to be that efficiencies from these mergers are sizeable. We calculate the compensating efficiencies that would prevent a merger from harming consumers for 1,014 mergers affecting 12,325 antitrust markets scrutinized by the European Commission between 1990 and 2018. Compensating efficiencies seem too large to be achievable for many mergers. Barriers to entry and the number of firms active in the market are the most important factors determining their size. We highlight concerns about the Commission’s merger enforcement being too lax.

Suggested Citation

  • Pauline Affeldt & Tomaso Duso & Klaus Gugler & Joanna Piechucka, 2021. "Assessing EU Merger Control through Compensating Efficiencies," CESifo Working Paper Series 9403, CESifo.
    • Handle: RePEc:ces:ceswps:_9403
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    References listed on IDEAS

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    Cited by:

    1. John T. Scott, 2023. "Research Diversity and Invention," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(2), pages 179-197, March.

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    More about this item

    Keywords

    compensating efficiencies; efficiency gains; merger control; concentration; screens; HHI; mergers; unilateral effects; market definition; entry barriers;
    All these keywords.

    JEL classification:

    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L00 - Industrial Organization - - General - - - General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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