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Are All Mergers Equally Delay-Averse? An Empirical Analysis of Procedural Delay in European Commission Merger Cases (1999-2008)

ESRC Center for Competition Policy, University of East Anglia, CCP Working Paper 09-10

44 Pages Posted: 2 Dec 2009 Last revised: 7 Dec 2009

Peter L. Ormosi

University of East Anglia (UEA) - Centre for Competition Policy; Norwich Business School

Date Written: November 4, 2009

Abstract

This article looks at the distribution of two EC merger procedural events and examines the effect of the indefinite-length suspension of merger investigations. Although the ECMR refers to the suspension of investigations as an exceptional instrument, it is used in a high proportion of cases. As the ECMR does not set a time limit for suspension, it can lead to significant delay in the assessment of mergers. To understand the causes of delay, this article relies on the fact that the suspension of the investigation is a consequence of merging parties’ failure to provide the necessary information to the Commission. Two main causes of this behaviour are identified. Firstly, merging parties may decide to intentionally withhold information in order to cause the suspension of the investigation, which allows them more time to do whatever is necessary to avoid a lengthy second phase investigation. Secondly, failure to provide the required information to the Commission may be a result of merging parties’ negligence towards the regulatory assessment of their merger. Whereas the first case may be socially beneficial, identifying the second type of behaviour may help in filtering out inefficient mergers.

Keywords: European Commission, mergers, merger remedies, suspension of investigation merger delay, distribution of procedural events

JEL Classification: K21, K4, K41

Suggested Citation

Ormosi, Peter L., Are All Mergers Equally Delay-Averse? An Empirical Analysis of Procedural Delay in European Commission Merger Cases (1999-2008) (November 4, 2009). ESRC Center for Competition Policy, University of East Anglia, CCP Working Paper 09-10. Available at SSRN: https://ssrn.com/abstract=1499671 or http://dx.doi.org/10.2139/ssrn.1499671

Peter L. Ormosi (Contact Author)

University of East Anglia (UEA) - Centre for Competition Policy ( email )

UEA
Norwich Research Park
Norwich, Norfolk NR47TJ
United Kingdom

Norwich Business School ( email )

Norwich
NR4 7TJ
United Kingdom

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