IDEAS home Printed from https://ideas.repec.org/p/ris/vhsuwp/2020_184.html
   My bibliography  Save this paper

Common factors of withdrawn and prohibited mergers in the European Union

Author

Listed:
  • Bernhardt, Lea

    (Helmut Schmidt University, Hamburg)

Abstract

In this paper, we analyse the final decisions for merger cases prepared by the European Commission (EC) since 1990 and build a unique subsample for all non-cleared cases. These incorporate all merger notifications which were either withdrawn by the notifying parties or have been prohibited by the European Commission.We find a sudden decline in prohibitions and withdrawals of cases since 2002 and explore three judicial defeats of the European Commission as determining factors behind these developments. We also find a higher likelihood of withdrawal or prohibition if cases are registered in sectors which incorporate firms in the business of information and communication or transportation and storage. When classifying the documents with a supervised machine learning algorithm, we are able to automatically identify the cleared versus the non-cleared cases with over 90% accuracy. Finally, we find that network effects, high market shares and the risk of collusion are the main competitive concerns which contribute to prohibition decisions in the information and communications sector.

Suggested Citation

  • Bernhardt, Lea, 2020. "Common factors of withdrawn and prohibited mergers in the European Union," Working Paper 184/2020, Helmut Schmidt University, Hamburg.
    • Handle: RePEc:ris:vhsuwp:2020_184
    as

    Download full text from publisher

    File URL: https://www.hsu-hh.de/fgvwl/wp-content/uploads/sites/572/2020/10/WP184.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2006. "Efficiency Gains from Mergers," Chapters, in: Fabienne IIzkovitz & Roderick Meiklejohn (ed.), European Merger Control, chapter 3, Edward Elgar Publishing.
    2. repec:hhs:iuiwop:543 is not listed on IDEAS
    3. Farrell, Joseph & Shapiro, Carl, 1990. "Horizontal Mergers: An Equilibrium Analysis," American Economic Review, American Economic Association, vol. 80(1), pages 107-126, March.
    4. Tomaso Duso & Klaus Gugler & Florian Szücs, 2013. "An Empirical Assessment of the 2004 EU Merger Policy Reform," Economic Journal, Royal Economic Society, vol. 123(11), pages 596-619, November.
    5. Affeldt, Pauline & Duso, Tomaso & Szücs, Florian, 2021. "25 years of European merger control," International Journal of Industrial Organization, Elsevier, vol. 76(C).
    6. Tomaso Duso & Klaus Gugler & Burcin Yurtoglu, 2005. "EU Merger Remedies: A Preliminary Empirical Assessment," CIG Working Papers SP II 2005-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    7. Bruce R. Lyons, 2004. "Reform of European Merger Policy," Review of International Economics, Wiley Blackwell, vol. 12(2), pages 246-261, May.
    8. Argentesi, Elena & Buccirossi, Paolo & Calvano, Emilio & Duso, Tomaso & Marrazzo, Alessia & Nava, Salvatore, 2021. "Merger Policy in Digital Markets: An Ex Post Assessment," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(1), pages 95-140.
    9. Bergman, Mats A. & Jakobsson, Maria & Razo, Carlos, 2005. "An econometric analysis of the European Commission's merger decisions," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 717-737, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dewenter, Ralf & Löw, Franziska, 2022. "Endogenous Network Effects," Working Paper 194/2022, Helmut Schmidt University, Hamburg.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goran Serdareviæ & Petr Teplý, 2011. "The Efficiency of EU Merger Control During the Period 1990–2008," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 61(3), pages 252-276, July.
    2. Patrice Bougette & Stéphane Turolla, 2006. "Merger Remedies at the European Commission: A Multinomial Logit Analysis," Post-Print halshs-00466606, HAL.
    3. Tomaso Duso & Klaus Gugler & Florian Szücs, 2013. "An Empirical Assessment of the 2004 EU Merger Policy Reform," Economic Journal, Royal Economic Society, vol. 123(11), pages 596-619, November.
    4. Tomaso Duso & Lea Bernhardt & Joanna Piechucka, 2024. "The Evolution of Theories of Harm in EU Merger Control," Discussion Papers of DIW Berlin 2090, DIW Berlin, German Institute for Economic Research.
    5. Affeldt, Pauline & Duso, Tomaso & Szücs, Florian, 2021. "25 years of European merger control," International Journal of Industrial Organization, Elsevier, vol. 76(C).
    6. Marie Goppelsroeder & Maarten Pieter Schinkel & Jan Tuinstra, 2008. "Quantifying The Scope For Efficiency Defense In Merger Control: The Werden‐Froeb‐Index," Journal of Industrial Economics, Wiley Blackwell, vol. 56(4), pages 778-808, December.
    7. Patrice Bougette & Stéphane Turolla, 2008. "Market structures, political surroundings, and merger remedies: an empirical investigation of the EC’s decisions," European Journal of Law and Economics, Springer, vol. 25(2), pages 125-150, April.
    8. Patrice Bougette & Florent Venayre, 2008. "Contrôles a priori et a posteriori des concentrations : comment augmenter l'efficacité des politiques de concurrence," Revue d'économie industrielle, De Boeck Université, vol. 0(1), pages 9-40.
    9. Tomaso Duso & Lea Bernhardt & Joanna Piechucka, 2024. "The Evolution of Theories of Harm in EU Merger Control," CESifo Working Paper Series 11218, CESifo.
    10. Duso, Tomaso & Gugler, Klaus & Yurtoglu, Burcin B., 2011. "How effective is European merger control?," European Economic Review, Elsevier, vol. 55(7), pages 980-1006.
    11. Clougherty, Joseph A. & Duso, Tomaso & Lee, Miyu & Seldeslachts, Jo, 2016. "Effective European Antitrust : Does EC Merger Policy Generate Deterrence?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(4), pages 1884-1903.
    12. Tomaso Duso & Klaus Gugler & Burcin Yurtoglu, 2005. "EU Merger Remedies: A Preliminary Empirical Assessment," CIG Working Papers SP II 2005-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    13. Nilsson, Mats, 2005. "Electric power oligopoly and suspicious minds--a critique of a recently approved merger," Energy Policy, Elsevier, vol. 33(15), pages 2023-2036, October.
    14. Marcos Avalos & Rafael E. De Hoyos, 2008. "An Empirical Analysis of Mexican Merger Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(2), pages 113-130, March.
    15. Jovanovic, Dragan & Wey, Christian, 2012. "An equilibrium analysis of efficiency gains from mergers," DICE Discussion Papers 64, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    16. Davies, Stephen & Olczak, Matthew & Coles, Heather, 2011. "Tacit collusion, firm asymmetries and numbers: Evidence from EC merger cases," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 221-231, March.
    17. Sven Heim & Kai Hüschelrath & Ulrich Laitenberger, 2016. "The Duration of the EC Merger Control Process: Determinants and the Impact of the 2004 Merger Regulation Reform," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 23(1), pages 37-62, February.
    18. Cosnita-Langlais Andreea & Sørgard Lars, 2018. "Enforcement and Deterrence in Merger Control: The Case of Merger Remedies," Review of Law & Economics, De Gruyter, vol. 14(3), pages 1-22, November.
    19. Stephen Davies & Matthew Olczak & Heather Coles, 2007. "Tacit collusion, firm asymmetries and numbers: evidence from EC merger cases," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-07, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    20. Joel Stiebale & Florian Szücs, 2022. "Mergers and market power: evidence from rivals' responses in European markets," RAND Journal of Economics, RAND Corporation, vol. 53(4), pages 678-702, December.

    More about this item

    Keywords

    mergers; competition policy; EU Commission; classification; network effects;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:vhsuwp:2020_184. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Bekcmann (email available below). General contact details of provider: https://edirc.repec.org/data/egbwhde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.