Is there a future for an efficiency defence in EU merger control?

Abstract

Since 2004, EU merger control guidelines state the Commission will consider efficiencies as a part of its evaluation. In this article, we show evidence that, despite the guidelines, current EU regulatory practice contains no effective efficiency defence.

We investigate empirically all EU merger control decisions from 1991 to 2014, with an emphasis on art.8 decisions since 2004. Parties have raised efficiency arguments only 21 times since 2004 in art.8 decisions. In fact, the Commission appears slightly more likely than the parties to raise efficiency arguments. Efficiency defence cases represent only 3 per cent of all cases, but 31 per cent of art.8 cases.

In critical cases, however, efficiency arguments appear to never have been decisive in the Commission’s practice. We discuss the reasons for this rarity. The parties may currently feel that raising efficiency issues signals weakness in the rest of their argument. We raise the possibility of requesting mandatory disclosure of a limited set of efficiency arguments in order to get started on regulatory evaluation of merger efficiencies, and we discuss the advantages and disadvantages of such an approach.

Sweet and Maxwell: European Law Review http://www.sweetandmaxwell.co.uk/catalogue/productdetails.aspx?recordid=427&productid=6968

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