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An Economic Perspective on the Jurisdictional Reform of the European Merger Control System

  • Oliver Budzinski

    ()

    (Faculty of Business Administration and Economics, Philipps Universitaet Marburg)

The jurisdictional elements of the comprehensive 2004 reform of EU merger control are worth being analysed against the background of economic theory. Competence allocation and delimitation represent important factors for the workability of multilevel merger control regimes. The economics of federalism offer an analytical framework that can be adopted in a modified version in order to assess competence allocation regimes in competition policy. According to these theoretical insights, a given competence allocation and delimitation regime can be evaluated in regard to four criteria: internalisation of externalities, cost efficiency (the one-stop-shop principle), preference orientation, and adaptability. The ‘old’ competence allocation and delimitation regime of EU merger control consisted of two elements: turnover thresholds and post-notification referrals. Analysis along the lines of the economics of federalism reveals considerable deficiencies of the ‘old’ regime. Thus, the results of the theoretical analysis are compatible to the dissatisfying empirical experience, which represented a major motivation for launching the reform process. However, the actual reform eventually left the turnover thresholds untouched. The main element of the jurisdictional reform was the introduction of pre-notification referrals and the addition of institutionalised network cooperation.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/gelbereihe/artikel/2006-08
File Function: First version, 2006
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Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series Marburg Working Papers on Economics with number 200608.

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Length: 16 pages
Date of creation: 2006
Date of revision:
Publication status: Forthcoming in European Competition Journal,Vol. 2 (1), 2006
Handle: RePEc:mar:volksw:200608
Contact details of provider: Postal: Universitätsstraße 25, 35037 Marburg
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