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http://ssrn.com/abstract=1625996
 
 

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Discretion and Judicial Review in Merger Control (Some Lessons Learned from the Risk Management Administrative Procedures)


Juan C. Hernandez H.


University of Navarra

June 16, 2010


Abstract:     
EU merger regulations rely on the “significant impediment to effective competition” substantive test. However, the clause that incorporates these tests is not clear regarding implementation criteria. As a result, in many cases assessment and decisions about Mergers and Acquisitions are adopted in an uncertain legal context.

Often this situation is justified for two reasons: first, the need to incorporate the economic complexity into the decision; and second, the prospective nature of merger assessment.

Nevertheless, from the perspective of Law many questions arise. Prospective decisions are unsuitable to deal with classic theories of regulation and judicial review. As we explain in this paper, the European Commission adopts its decision based on the foreseeable behaviour of an undertaking. European Courts recognize the Commission’s ample discretion to assess merger on a case-by-case basis and limit the scope of judicial review. As a result, commentators have criticized the EC merger regulation.

In this paper these issues are considered. In the first part, we study the clause that incorporates the substantive test in EC merger regulation. In the second we deal with the scope of judicial review of prospective decisions and appropriate standard of proof. Next, we argue that reform of EC merger administrative procedures will reduce the scope of discretionary authority to reasonable levels and improve the decision-making process. Finally, we suggest tools developed in the risk regulation literature to improve legitimacy and ensure rationality of the European Commission’s decisions.

Number of Pages in PDF File: 24

Keywords: Competition Law, Discretion, Merger Control, EU Judicial Review, Risk Management Administrative Procedures

JEL Classification: K00, K21, L40, L49, L51

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Date posted: June 18, 2010  

Suggested Citation

Hernandez H., Juan C., Discretion and Judicial Review in Merger Control (Some Lessons Learned from the Risk Management Administrative Procedures) (June 16, 2010). Available at SSRN: http://ssrn.com/abstract=1625996 or http://dx.doi.org/10.2139/ssrn.1625996

Contact Information

Juan C. Hernandez H. (Contact Author)
University of Navarra ( email )
Campus Universitario
Edificio de Bibliotecas
Pamplona, Navarra 31008
Spain
00-34-948425600 x 3177 (Phone)
00-34-948425636 (Fax)
HOME PAGE: http://www.unav.es/departamento/derechoadministrativo/hernandez
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