Effective European Antitrust: Does EC Merger Policy Generate Deterrence?

Clougherty , Joseph A.; Duso, Tomaso; Lee, Miyu; Seldeslachts, Jo

doi:10.2139/ssrn.2697464

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Effective European Antitrust: Does EC Merger Policy Generate Deterrence?

42 Pages Posted: 1 Dec 2015

See all articles by Joseph A. Clougherty

Joseph A. Clougherty

University of Illinois at Urbana-Champaign

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization; Centre for Economic Policy Research (CEPR)

Miyu Lee

Humboldt University of Berlin - School of Business and Economics

Jo Seldeslachts

KU Leuven - Faculty of Business and Economics (FEB); German Institute for Economic Research (DIW Berlin)

There are 2 versions of this paper

Date Written: November 2015

Abstract

We estimate the deterrence effects of European Commission (EC) merger policy instruments over the 1990-2009 period. Our empirical results suggest that phase-1 remedies uniquely generate robust deterrence as – unlike phase-1 withdrawals, phase-2 remedies, and preventions – phase-1 remedies lead to fewer merger notifications in subsequent years.

Furthermore, the deterrence effects of phase-1 remedies work best in high-concentration industries; i.e., industries where the HHI is above the 0.2 cut-off level employed by the EC.

Additionally, we find that phase-1 remedies do not deter clearly pro-competitive mergers, but do deter potentially anti-competitive mergers in high-concentration industries.

JEL Classification: K21, K40, L40

Suggested Citation: Suggested Citation

Clougherty, Joseph A. and Duso, Tomaso and Lee, Miyu and Seldeslachts, Jo, Effective European Antitrust: Does EC Merger Policy Generate Deterrence? (November 2015). Available at SSRN: https://ssrn.com/abstract=2697464 or http://dx.doi.org/10.2139/ssrn.2697464