Ilzkovitz, Fabienne; Meiklejohn, Roderick --- "European Merger Control: Do We Need an Efficiency Defence?" [2006] ELECD 88; in IIzkovitz, Fabienne; Meiklejohn, Roderick (eds), "European Merger Control" (Edward Elgar Publishing, 2006)

Book Title: European Merger Control

Editor(s): IIzkovitz, Fabienne; Meiklejohn, Roderick

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845424916

Section: Chapter 2

Section Title: European Merger Control: Do We Need an Efficiency Defence?

Author(s): Ilzkovitz, Fabienne; Meiklejohn, Roderick

Number of pages: 41

Extract:

2. European merger control: do we
need an efficiency defence?
Fabienne Ilzkovitz and Roderick Meiklejohn

Since the end of 1990, the European Commission has had specific powers to
control mergers with a Community dimension under the merger regulation.1
This system of merger control at the Community level was created because
globalization and the dismantling of non-tariff barriers in the Single Market
resulted in major corporate reorganizations in the Community, particularly
in the form of cross-border mergers. Such restructuring is welcome if it
enables firms to exploit the new opportunities created by a wider market and
enhances their efficiency. However, mergers can also be a means to increase
market power. The control of mergers at the Community level must there-
fore ensure that those mergers which do not enhance efficiency and which
may distort competition in the Community are forbidden. However, the
1989 merger regulation was traditionally interpreted as requiring mergers to
be judged on the basis of their anti-competitive effects alone and does not
allow efficiency gains to be used to justify mergers which would otherwise be
unacceptable.
In January 2004 the Council of Ministers adopted a new merger regula-
tion.2 Amongst other things, the new regulation changes the criteria (the
substantive test) for deciding whether a merger should be permitted or for-
bidden and provides a somewhat firmer legal basis for the consideration of
efficiency gains than existed in the old regulation. These aspects of the new
regulation are described in Section 2.1 ...