25 Years of European Merger Control

61 Pages Posted: 8 May 2020

See all articles by Pauline Affeldt

Pauline Affeldt

German Institute for Economic Research (DIW Berlin); Technische Universität Berlin (TU Berlin)

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)

Florian Szücs

Vienna University of Economics and Business

Multiple version iconThere are 3 versions of this paper

Date Written: April 2020

Abstract

We study the evolution of EC merger decisions over the first 25 years of common European merger policy. Using a novel dataset at the level of the relevant antitrust markets and containing all merger cases scrutinized by the Commission over the 1990-2014 period, we evaluate how consistently arguments related to structural market parameters – dominance, concentration, barriers to entry, and foreclosure – were applied over time and across different dimensions such as the geographic market definition and the complexity of the merger. Simple, linear probability models as usually applied in the literature overestimate on average the effects of the structural indicators. Using non-parametric machine learning techniques, we find that dominance is positively correlated with competitive concerns, especially in concentrated markets and in complex mergers. Yet, its importance has decreased over time and significantly following the 2004 merger policy reform. The Commission's competitive concerns are also correlated with concentration and the more so, the higher the entry barriers and the risks of foreclosure. These patterns are not changing over time. The role of the structural indicators in explaining competitive concerns does not change depending on the geographic market definition.

Keywords: causal forests, Concentration, Dominance, Entry Barriers, EU Commission, foreclosure, Merger Policy

JEL Classification: K21, L40

Suggested Citation

Affeldt, Pauline and Duso, Tomaso and Szücs, Florian, 25 Years of European Merger Control (April 2020). CEPR Discussion Paper No. DP14548, Available at SSRN: https://ssrn.com/abstract=3594169

Pauline Affeldt

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Juni 135
Berlin, 10623
Germany

Tomaso Duso (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization ( email )

Berlin, 10585
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Florian Szücs

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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