Should Profit Margins Play a More Decisive Role in Merger Control? - A Rejoinder to Jorge Padilla

Journal of European Competition Law & Practice, Vol. 9, No. 5, pp. 336-342, 2018

14 Pages Posted: 29 Apr 2018 Last revised: 1 Jun 2018

See all articles by Tommaso M. Valletti

Tommaso M. Valletti

Imperial College Business School; Centre for Economic Policy Research (CEPR)

Hans Zenger

European Union - Directorate General for Competition

Date Written: April 11, 2018

Abstract

According to empirical research, recent times have seen a significant increase in firms' profit margins.

Higher profit margins are a reflection of increased pricing power.

Prospective mergers are more likely to cause competition concerns the higher firms' pricing power is to begin with.

Keywords: Merger Control, Margins, Competitive Effects

JEL Classification: L4

Suggested Citation

Valletti, Tommaso M. and Zenger, Hans, Should Profit Margins Play a More Decisive Role in Merger Control? - A Rejoinder to Jorge Padilla (April 11, 2018). Journal of European Competition Law & Practice, Vol. 9, No. 5, pp. 336-342, 2018, Available at SSRN: https://ssrn.com/abstract=3160630

Tommaso M. Valletti

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Hans Zenger (Contact Author)

European Union - Directorate General for Competition ( email )

Place Madou, Madouplein 1
Saint-Josse-ten-Noode/Sint-Joost-ten-Noode
Brussels, B-1049
Belgium

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