Merger Control and the Rule of Law

Abstract

This article asks whether competition law, in particular the law on mergers, should always be called law. It concentrates on merger control in the European Union but draws on US experience and history to provide ideas and to contribute to the framework for the analysis. The starting point is that competition law is increasingly located not in courts but in agencies: in the EU, the European Commission. These agency regulators take decisions based allegedly on economic theory, but which are non-predictable and nonreplicable; they do not provide a tight enough reasoning process to serve as a guide to action in future cases. Yet they are only marginally reviewable by courts. Finally, even insofar as identifiable and coherent rules exist for agency behaviour, their rule-like character is undermined by a culture of negotiation and compromise, which means that the link between rule and decision becomes even more tenuous and even less apparent to the nonparty. Over-reliance on questionable economics, as well as inadequately constrained agency behaviour, suggests that merger control is now the domain of ad-hoc decision making as much as it is of law.

Keywords: merger control, EU law, European Union

JEL Classification: k21, k33