Interim measures have the potential to be an effective and cost-efficient way for businesses with limited budgets to change the behaviour of companies that raise competition concerns. The threshold for interim measures was lowered in the UK, and the UK competition authority (the CMA) has made clear it is open to receiving more applications. The CMA dealt with an application for interim measures in the online auction services case, which ultimately resulted in the company under investigation offering commitments. However, the procedural and evidentiary standards for a successful interim measures case remain high and applicants should not underestimate the burden and cost of embarking on the process. This paper considers these issues, with particular focus on the implications for business of making an application for interim measures or defending one, as a company subject to a complaint.
{"title":"Interim Measures in the UK: Lessons from the Online Auction Services Case","authors":"Simon Chisholm, Sarah Long, H. Parker","doi":"10.2139/ssrn.3317618","DOIUrl":"https://doi.org/10.2139/ssrn.3317618","url":null,"abstract":"Interim measures have the potential to be an effective and cost-efficient way for businesses with limited budgets to change the behaviour of companies that raise competition concerns. The threshold for interim measures was lowered in the UK, and the UK competition authority (the CMA) has made clear it is open to receiving more applications. The CMA dealt with an application for interim measures in the online auction services case, which ultimately resulted in the company under investigation offering commitments. However, the procedural and evidentiary standards for a successful interim measures case remain high and applicants should not underestimate the burden and cost of embarking on the process. This paper considers these issues, with particular focus on the implications for business of making an application for interim measures or defending one, as a company subject to a complaint.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125562054","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Italian Abstract: Vari autorevoli commentatori hanno recentemente sostenuto che un elevato stock di crediti deteriorati (non-performing loans, NPLs) nei bilanci bancari possa ostacolare l’erogazione di credito e quindi il corretto funzionamento del meccanismo di trasmissione della politica monetaria. Questo articolo solleva dubbi su questa tesi e suggerisce un punto di vista più articolato. Evidenzia che non esistono serie analisi teoriche della relazione tra NPLs e dinamica del credito, e che l’evidenza empirica è scarsa. Le politiche di vigilanza dovrebbero porsi l’obiettivo di massimizzare il tasso di rientro in bonis, piuttosto che di eliminare gli NPL. English Abstract: It has recently been argued that high non-performing loan stocks can limit banks’ lending ability, and thus impair the effectiveness of monetary policy. The present article questions this claim and argues for a more nuanced view. It points to the lack of serious theoretical analysis of the relationship between non-performing loan stocks and credit dynamics; the empirical evidence is also scarce. Policy should focus on maximising the ‘cure rate’ rather than eliminating non-performing loans entirely.
{"title":"Gli Alti Livelli Di Npl Indeboliscono La Capacità Delle Banche Di Erogare Credito? (Do High Levels of NPL Weaken Banks' Ability to Provide Credit?)","authors":"P. Angelini","doi":"10.2139/ssrn.3218973","DOIUrl":"https://doi.org/10.2139/ssrn.3218973","url":null,"abstract":"<b>Italian Abstract:</b> Vari autorevoli commentatori hanno recentemente sostenuto che un elevato stock di crediti deteriorati (non-performing loans, NPLs) nei bilanci bancari possa ostacolare l’erogazione di credito e quindi il corretto funzionamento del meccanismo di trasmissione della politica monetaria. Questo articolo solleva dubbi su questa tesi e suggerisce un punto di vista più articolato. Evidenzia che non esistono serie analisi teoriche della relazione tra NPLs e dinamica del credito, e che l’evidenza empirica è scarsa. Le politiche di vigilanza dovrebbero porsi l’obiettivo di massimizzare il tasso di rientro in bonis, piuttosto che di eliminare gli NPL. <br> <b>English Abstract:</b> It has recently been argued that high non-performing loan stocks can limit banks’ lending ability, and thus impair the effectiveness of monetary policy. The present article questions this claim and argues for a more nuanced view. It points to the lack of serious theoretical analysis of the relationship between non-performing loan stocks and credit dynamics; the empirical evidence is also scarce. Policy should focus on maximising the ‘cure rate’ rather than eliminating non-performing loans entirely.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125499225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter aims to review data-driven mergers including, but not limited to, major conglomerates involving large scale of individual user data, known as ‘big data’, by Facebook (WhatsApp), Microsoft (Yahoo!, Skype and LinkedIn), Google (Double Click), TomTom (Tele Atlas), Publicis/Omnicon, Telefonica/Vodafone UK, and so on. These mergers have been unconditionally cleared based on the traditional law and economic analysis of mergers, known as a ‘significant impediment to effective competition’ legal test. The test disregards public policy concerns, including the economics of privacy, i.e., data analytics; data sharing with third parties, e.g., publishers or retailers; and data selling. The chapter draws on previous research on the rise of big data and the loss of privacy, which sheds light inter alia on the ineffectiveness of the data, consumer and competition rules and on the intrusive privacy policies of the various digital platforms. This chapter argues that the current assessment of mergers has to activate the public policy clause and to consider the economic implications of privacy following a merger. No merger should be unconditionally cleared if it involves a large amount of users’ data. The chapter arrives at the conclusion that the new data protection framework is insufficiently robust. The contract theory of informed consent associated with the potential of sharing anonymised and/or aggregated data means that digital platforms are able to exploit data protection loopholes and abuse users’ trust in digital platforms. In addition, the chapter looks at the treatment of innovative digital platforms from the perspective of Schumpeterian economics and therefore identifies the fallacy of too great a reliance on ephemeral market shares. It discusses more critically the expectation of a robust and coherent theory of harm to consumers in the context of digital markets.
{"title":"Data-Driven Mergers Under EU Competition Law","authors":"A. D. Chiriţă","doi":"10.2139/ssrn.3199912","DOIUrl":"https://doi.org/10.2139/ssrn.3199912","url":null,"abstract":"This chapter aims to review data-driven mergers including, but not limited to, major conglomerates involving large scale of individual user data, known as ‘big data’, by Facebook (WhatsApp), Microsoft (Yahoo!, Skype and LinkedIn), Google (Double Click), TomTom (Tele Atlas), Publicis/Omnicon, Telefonica/Vodafone UK, and so on. These mergers have been unconditionally cleared based on the traditional law and economic analysis of mergers, known as a ‘significant impediment to effective competition’ legal test. The test disregards public policy concerns, including the economics of privacy, i.e., data analytics; data sharing with third parties, e.g., publishers or retailers; and data selling. The chapter draws on previous research on the rise of big data and the loss of privacy, which sheds light inter alia on the ineffectiveness of the data, consumer and competition rules and on the intrusive privacy policies of the various digital platforms. \u0000 \u0000This chapter argues that the current assessment of mergers has to activate the public policy clause and to consider the economic implications of privacy following a merger. No merger should be unconditionally cleared if it involves a large amount of users’ data. \u0000 \u0000The chapter arrives at the conclusion that the new data protection framework is insufficiently robust. The contract theory of informed consent associated with the potential of sharing anonymised and/or aggregated data means that digital platforms are able to exploit data protection loopholes and abuse users’ trust in digital platforms. In addition, the chapter looks at the treatment of innovative digital platforms from the perspective of Schumpeterian economics and therefore identifies the fallacy of too great a reliance on ephemeral market shares. It discusses more critically the expectation of a robust and coherent theory of harm to consumers in the context of digital markets.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122397625","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article argues that economic evaluations of optimal antitrust rules ought to fully recognize antitrust predictability as a relevant factor. It discusses the differences between the direct and ...
{"title":"Preventing Anticompetitive Conduct Directly and Indirectly: Accuracy vs. Predictability","authors":"J. Broulík","doi":"10.2139/ssrn.3100778","DOIUrl":"https://doi.org/10.2139/ssrn.3100778","url":null,"abstract":"This article argues that economic evaluations of optimal antitrust rules ought to fully recognize antitrust predictability as a relevant factor. It discusses the differences between the direct and ...","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"2019 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115177743","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
L. Hancher, F. Salerno, TILEC (Tilburg Law & Economic) Submitter
With three waves of internal energy market legislation already adopted and a fourth just tabled, a key question is “do we have an institutional structure that can effectively deliver the ambitious goals of the EU energy and climate change policy?”. To answer this question, the chapter employs a benchmark comparison, using general EU competition law as a benchmark for an effectively enforced EU policy. It compares the current as well as the emerging institutional structure of EU energy market regulation with that of EU competition law, to assess the extent to which there is a ‘competition law-ization’ of energy market institutions. The chapter finds that the Third Package of 2009 created an institutional structure that shares a number of features with competition law, hence laying the grounds for an effective institutional structure. The new ‘Winter’ package unveiled in November 2016 builds on the institutional acquis. However, there are also new trends – in particular a shift to relying on tools that require more Member State co-operation with the Commission. This trend might limit the effectiveness of competition law-ization unless such co-operation concerns aspects that are complementary to the core subject matter of competition law.
{"title":"Analysis of Current Trends and a First Assessment of the New Package","authors":"L. Hancher, F. Salerno, TILEC (Tilburg Law & Economic) Submitter","doi":"10.2139/SSRN.2956308","DOIUrl":"https://doi.org/10.2139/SSRN.2956308","url":null,"abstract":"With three waves of internal energy market legislation already adopted and a fourth just tabled, a key question is “do we have an institutional structure that can effectively deliver the ambitious goals of the EU energy and climate change policy?”. To answer this question, the chapter employs a benchmark comparison, using general EU competition law as a benchmark for an effectively enforced EU policy. It compares the current as well as the emerging institutional structure of EU energy market regulation with that of EU competition law, to assess the extent to which there is a ‘competition law-ization’ of energy market institutions. \u0000The chapter finds that the Third Package of 2009 created an institutional structure that shares a number of features with competition law, hence laying the grounds for an effective institutional structure. The new ‘Winter’ package unveiled in November 2016 builds on the institutional acquis. However, there are also new trends – in particular a shift to relying on tools that require more Member State co-operation with the Commission. This trend might limit the effectiveness of competition law-ization unless such co-operation concerns aspects that are complementary to the core subject matter of competition law.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128165454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-12-10DOI: 10.7172/1689-9024.YARS.2016.9.14.4
M. Bernatt
The article discusses the effectiveness and the intensity of judicial review in the Polish competition law system. First, it studies whether the judicial review offered by the 1st instance Court of Competition and Consumer Protection in Warsaw (SOKiK) is effective in practice. Next, the article analyzes whether Polish courts tend to defer to the findings of the Polish competition authority, UOKiK. Judgments of the Supreme Court concerning relevant market definition serve as case studies. Finally, the article discusses whether proceedings before the Polish competition authority ensure sufficient due process guarantees, the impartiality of decisionmakers, and the overall expert character of UOKiK’s decision-making process. On this basis the article examines whether there are grounds for the reviewing courts to defer to UOKiK’s findings. The article concludes that currently the review undertaken by SOKiK happens to be superficial and thus ineffective. At the same time, the Supreme Court’s review of the determination of the relevant market is not deferential towards UOKiK’s findings. The Supreme Court substitutes its own definition of the relevant market for that of UOKiK and that of the lower courts. However, the article shows that there are no grounds at the moment for arguing for greater judicial deference. Proceedings held before UOKiK, despite recently introduced improvements, still do not offer sufficient due process guarantees or a division between investigatory and decision-making functions. In addition, UOKiK’s expertise is not sufficient for both institutional and practical reasons.
{"title":"Effectiveness of Judicial Review in the Polish Competition Law System and the Place for Judicial Deference","authors":"M. Bernatt","doi":"10.7172/1689-9024.YARS.2016.9.14.4","DOIUrl":"https://doi.org/10.7172/1689-9024.YARS.2016.9.14.4","url":null,"abstract":"The article discusses the effectiveness and the intensity of judicial review in the Polish competition law system. First, it studies whether the judicial review offered by the 1st instance Court of Competition and Consumer Protection in Warsaw (SOKiK) is effective in practice. Next, the article analyzes whether Polish courts tend to defer to the findings of the Polish competition authority, UOKiK. Judgments of the Supreme Court concerning relevant market definition serve as case studies. Finally, the article discusses whether proceedings before the Polish competition authority ensure sufficient due process guarantees, the impartiality of decisionmakers, and the overall expert character of UOKiK’s decision-making process. On this basis the article examines whether there are grounds for the reviewing courts to defer to UOKiK’s findings. The article concludes that currently the review undertaken by SOKiK happens to be superficial and thus ineffective. At the same time, the Supreme Court’s review of the determination of the relevant market is not deferential towards UOKiK’s findings. The Supreme Court substitutes its own definition of the relevant market for that of UOKiK and that of the lower courts. However, the article shows that there are no grounds at the moment for arguing for greater judicial deference. Proceedings held before UOKiK, despite recently introduced improvements, still do not offer sufficient due process guarantees or a division between investigatory and decision-making functions. In addition, UOKiK’s expertise is not sufficient for both institutional and practical reasons.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"283 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122538532","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A two-sided platform business is a new type of intermediary to be found in a growing number of economic sectors. As to the hospitability industry in particular, recent innovations in the field of digital technologies prompted the rise of so called Online Travel Agents (OTAs) and the demise of the traditional merchant model. Recently national competition authorities (NCAs) in the EU investigated so called rate parity clauses in the contracts between the three largest OTAs and their hotel partners. These are contract clauses laying down the hotelier’s obligation to display the same room prices across sales channels. The parallel investigations conducted by the NCAs revealed an array of anticompetitive effects stemming from rate parity obligations. While the German NCA concluded that there was insufficient evidence of the efficiency gains of these clauses, and therefore decided to prohibit them, the French, Italian and Swedish NCAs implicitly recognised that some level of protection against free-riding was necessary, and accepted commitments to reduce the scope of the rate parity obligation. The hotel online booking cases were closely followed in the EU and beyond, since they could help clarify a number of key assessment issues concerning a category of commercial practices already widely spread in online markets. In-depth analyses of the NCAs’ findings are now needed, especially in view of the promotion of an effective antitrust-based platform regulation. In particular, this article explores some of the challenges related to the application of the traditional free-riding defence to rate parity obligations.
{"title":"Online Platforms, Rate Parity, and the Free Riding Defence","authors":"S. Vezzoso","doi":"10.2139/ssrn.2802151","DOIUrl":"https://doi.org/10.2139/ssrn.2802151","url":null,"abstract":"A two-sided platform business is a new type of intermediary to be found in a growing number of economic sectors. As to the hospitability industry in particular, recent innovations in the field of digital technologies prompted the rise of so called Online Travel Agents (OTAs) and the demise of the traditional merchant model. Recently national competition authorities (NCAs) in the EU investigated so called rate parity clauses in the contracts between the three largest OTAs and their hotel partners. These are contract clauses laying down the hotelier’s obligation to display the same room prices across sales channels. The parallel investigations conducted by the NCAs revealed an array of anticompetitive effects stemming from rate parity obligations. While the German NCA concluded that there was insufficient evidence of the efficiency gains of these clauses, and therefore decided to prohibit them, the French, Italian and Swedish NCAs implicitly recognised that some level of protection against free-riding was necessary, and accepted commitments to reduce the scope of the rate parity obligation. The hotel online booking cases were closely followed in the EU and beyond, since they could help clarify a number of key assessment issues concerning a category of commercial practices already widely spread in online markets. In-depth analyses of the NCAs’ findings are now needed, especially in view of the promotion of an effective antitrust-based platform regulation. In particular, this article explores some of the challenges related to the application of the traditional free-riding defence to rate parity obligations.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133238925","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this review of retrospective European merger studies we provide a discussion of the price effect of analysed mergers and examine whether the antitrust agency made the right decisions. We find that remedied mergers, on average, were not followed by a price-increase, suggesting that, in our sample, merger interventions were effective at eliminating problems. High market concentration was more likely to lead to higher post-merger prices, although remedies were able to reduce post-merger price-increases, even in concentrated markets. We look at a number of reasons why prices may increase post-merger and find little evidence of genuine agency errors.
{"title":"What Can Merger Retrospectives Tell Us? An Assessment of European Mergers","authors":"Franco Mariuzzo, Peter L. Ormosi, R. Havell","doi":"10.2139/ssrn.2781509","DOIUrl":"https://doi.org/10.2139/ssrn.2781509","url":null,"abstract":"In this review of retrospective European merger studies we provide a discussion of the price effect of analysed mergers and examine whether the antitrust agency made the right decisions. We find that remedied mergers, on average, were not followed by a price-increase, suggesting that, in our sample, merger interventions were effective at eliminating problems. High market concentration was more likely to lead to higher post-merger prices, although remedies were able to reduce post-merger price-increases, even in concentrated markets. We look at a number of reasons why prices may increase post-merger and find little evidence of genuine agency errors.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"112 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133014644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-06-01DOI: 10.7590/187479816X14628633832166
M. Bernatt
The article aims at presenting - from Poland’s perspective - the challenges in building an adequate system of administrative sanctions. It is claimed that the efficiency of the functioning of this system should be balanced with the appropriate level of observance of procedural fairness as well as with appropriate rules governing the attribution of administrative liability. This article analyzes three areas where a balanced approach is needed: the first concerns the bases for administrative liability, the second the scope of procedural rights, and the third the institutional arrangement of the system. This article names two factors that should be taken into consideration when deciding how to reconcile efficiency with procedural fairness. Taken into account should be, first, the complexity of the given area of administrative law and, second, the severity of the sanctions.
{"title":"Administrative Sanctions: Between Efficiency and Procedural Fairness","authors":"M. Bernatt","doi":"10.7590/187479816X14628633832166","DOIUrl":"https://doi.org/10.7590/187479816X14628633832166","url":null,"abstract":"The article aims at presenting - from Poland’s perspective - the challenges in building an adequate system of administrative sanctions. It is claimed that the efficiency of the functioning of this system should be balanced with the appropriate level of observance of procedural fairness as well as with appropriate rules governing the attribution of administrative liability. This article analyzes three areas where a balanced approach is needed: the first concerns the bases for administrative liability, the second the scope of procedural rights, and the third the institutional arrangement of the system. This article names two factors that should be taken into consideration when deciding how to reconcile efficiency with procedural fairness. Taken into account should be, first, the complexity of the given area of administrative law and, second, the severity of the sanctions.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133348500","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The price effect of past mergers has been extensively researched over the past two decades. The overwhelming majority of these studies estimate the over-time average price effect of the merger. Merger guidelines agree that mergers should be approved if market dynamics, such as entry, eliminate negative welfare effects. Estimating price averages ignores key information about the post-merger dynamics of prices and is unable to identify if post-merger prices eventually revert to pre-merger levels. We provide evidence from a set of Monte Carlo experiments to show how serious this problem might be. Firstly, potentially all the studies that concluded - estimating post-merger over-time averages - that the merger led to a price increase, could have been wrong, and in fact the merger price increase disappeared within a reasonable time. Similarly, up to half of the studies that concluded that the merger did not increase prices could have been wrong in their conclusion.
{"title":"Post-Merger Price Dynamics Matter, So Why Do Merger Retrospectives Ignore Them?","authors":"Franco Mariuzzo, Peter L. Ormosi","doi":"10.2139/ssrn.2781510","DOIUrl":"https://doi.org/10.2139/ssrn.2781510","url":null,"abstract":"The price effect of past mergers has been extensively researched over the past two decades. The overwhelming majority of these studies estimate the over-time average price effect of the merger. Merger guidelines agree that mergers should be approved if market dynamics, such as entry, eliminate negative welfare effects. Estimating price averages ignores key information about the post-merger dynamics of prices and is unable to identify if post-merger prices eventually revert to pre-merger levels. We provide evidence from a set of Monte Carlo experiments to show how serious this problem might be. Firstly, potentially all the studies that concluded - estimating post-merger over-time averages - that the merger led to a price increase, could have been wrong, and in fact the merger price increase disappeared within a reasonable time. Similarly, up to half of the studies that concluded that the merger did not increase prices could have been wrong in their conclusion.","PeriodicalId":130313,"journal":{"name":"ERN: Antitrust (European) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130894318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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