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On the Effective Design of the Efficiency Defence

Author

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  • Andreea Cosnita

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Philippe Tropeano

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The efficiency defence was long delayed in the European merger control due to costly implementation issues. In this paper we argue that the upstream consequences of the efficiency defence should equally be considered, namely the improvement of the distribution of notified mergers through the incentives it provides towards more efficient mergers. First of all, we show that even if the Competition Authority may not tell apart the mergers that rightfully invoke the efficiency defence from those that do not, allowing such a procedure can lead to a lower post-merger price. Secondly, we study the impact of merger remedies on the incentives conveyed by the efficiency defence, and conclude on the optimal design of the efficiency defence procedure.

Suggested Citation

  • Andreea Cosnita & Jean-Philippe Tropeano, 2006. "On the Effective Design of the Efficiency Defence," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00113503, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00113503
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00113503
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    References listed on IDEAS

    as
    1. Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2006. "Efficiency Gains from Mergers," Chapters,in: European Merger Control, chapter 3 Edward Elgar Publishing.
    2. repec:hhs:iuiwop:543 is not listed on IDEAS
    3. Lagerlof, Johan N.M. & Heidhues, Paul, 2005. "On the desirability of an efficiency defense in merger control," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 803-827, December.
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    Citations

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    Cited by:

    1. Lars Sorgard & Andreea Cosnita-Langlais, 2013. "Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?," Post-Print hal-01668416, HAL.
    2. Andreea Cosnita-Langlais, 2016. "Enforcement of Merger Control. Theoretical Insights for Its Procedural Design," Revue économique, Presses de Sciences-Po, vol. 67(HS1), pages 39-51.
    3. Shekhar, Shiva & Wey, Christian, 2017. "Uncertain merger synergies, passive partial ownership, and merger control," DICE Discussion Papers 260, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Dertwinkel-Kalt, Markus & Wey, Christian, 2014. "Remedies vs. Extreme Options in Merger Control," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100397, Verein für Socialpolitik / German Economic Association.
    5. Dertwinkel-Kalt, Markus & Wey, Christian, 2016. "Evidence production in merger control: The role of remedies," DICE Discussion Papers 217, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    More about this item

    Keywords

    merger remedies; Merger control; efficiency defence; merger remedies.; Contrôle des fusions; procédure d' «efficiency defence»; remèdes des fusions.;

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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