Röller, Lars-Hendrik; Stennek, Johan; Verboven, Frank --- "Efficiency Gains from Mergers" [2006] ELECD 89; 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 3

Section Title: Efficiency Gains from Mergers

Author(s): Röller, Lars-Hendrik; Stennek, Johan; Verboven, Frank

Number of pages: 118

Extract:

3. Efficiency gains from mergers
Lars-Hendrik Röller, Johan Stennek
and Frank Verboven

The purpose of this chapter is to contribute to the analysis of two questions:
Should a merger control system take into account efficiency gains from
horizontal mergers, and balance these gains against the anti-competitive
effects of mergers? If so, how should a system be designed to account for
efficiency gains?
There are several reasons why efficiency gains from horizontal mergers
are an important issue today. Business conditions are changing rapidly, for
example as a result of the internal market, increased global competition,
and the deregulation of many industries. The consequent need to adapt the
industry structure has generated a wave of mergers in Europe as well as in
the rest of the world. The current wave is of historical proportions.
All mergers with a so-called Community dimension must be notified to
the Commission and are subsequently reviewed under the merger regula-
tion.1 According to Articles 2(3) of the regulation, a concentration which
`creates or strengthens a dominant position as a result of which effective
competition would be significantly impeded' shall be prohibited. Otherwise
it shall be allowed. According to Article 2(1)(b), the Commission shall, in
making this appraisal, amongst other things take into account `the devel-
opment of technical and economic progress provided that it is to con-
sumers' advantage and does not form an obstacle to competition'. The
latter clause has triggered a debate whether the merger regulation allows ...