Merger control

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Competition law
Basic concepts
History of competition law Monopoly and oligopoly Coercive monopoly Natural monopoly Barriers to entry Herfindahl–Hirschman index Market concentration Market power SSNIP test Relevant market Merger control
Anti-competitive practices
Monopolization Collusion Formation of cartels Price fixing (cases) Bid rigging Tacit collusion Product bundling and tying Refusal to deal Group boycott Essential facilities Exclusive dealing Dividing territories Predatory pricing Misuse of patents and copyrights
Enforcement authorities and organizations
International Competition Network List of competition regulators
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Merger control refers to the procedure of reviewing mergers and acquisitions under antitrust / competition law. Over 130 nations worldwide have adopted a regime providing for merger control. National or supernational competition agencies such as the EU European Commission, the UK Competition and Markets Authority, or the US Department of Justice or Federal Trade Commission are normally entrusted with the role of reviewing mergers.

Merger control regimes are adopted to prevent anti-competitive consequences of concentrations (as mergers and acquisitions are also known). Accordingly, most merger control regimes normally provide for one of the following substantive tests:

• Does the concentration significantly impede effective competition? (EU, Germany)
• Does the concentration substantially lessen competition? (US, UK)
• Does the concentration lead to the creation or strengthening of a dominant position? (Switzerland, Russia)

In practice most merger control regimes are based on very similar underlying principles. In simple terms, the creation of a dominant position would usually result in a substantial lessening of or significant impediment to effective competition.

The large majority of modern merger control regimes are of an ex-ante nature, i.e. the reviewing authorities carry out their assessment before the transaction is implemented.

While it is indisputable that a concentration may lead to a reduction in output and result in higher prices and thus in a welfare loss to consumers, the antitrust authority faces the challenge of applying various economic theories and rules in a legally binding procedure.