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Will efficiencies ever matter in merger control?

Author

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  • David Spector

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

While the new European merger regulation makes explicit room for efficiencies, they almost never sway the decision in practice. To some extent, this is because the need to prove that the three cumulative conditions- verifiability, merger-specificity and benefit to consumers - are met is a tough requirement. But this difficulty is compounded by the prevalence of three views which reduce competition authorities' receptiveness to efficiency claims, and which we believe to be mistaken. These views are (i) the idea that efficiencies cannot benefit consumers in little competitive markets, (ii) the idea that savings on fixed costs never benefit consumers, and (iii) the idea that buyer-power induced cost reductions are irrelevant. More balanced presumptions would likely improve the treatment of efficiency claims.

Suggested Citation

  • David Spector, 2007. "Will efficiencies ever matter in merger control?," PSE-Ecole d'économie de Paris (Postprint) halshs-00754192, HAL.
    • Handle: RePEc:hal:pseptp:halshs-00754192
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