Merger control

Merger control refers to the procedure of reviewing <a href="/facts/Mergers_and_acquisitions/YfczSf3M">mergers and acquisitions</a> under <a href="/facts/Antitrust/cq7hKYN4">antitrust</a> / competition law. Over 130 nations worldwide have adopted a regime providing for merger control. National or supernational competition agencies such as the <a href="/facts/European_Union/6GYcR8qM">EU</a> <a href="/facts/European_Commission/Cc5JgbEI">European Commission</a>, the <a href="/facts/United_Kingdom/kuPAILt2">UK</a> <a href="/facts/Competition_and_Markets_Authority/0TdndUvG">Competition and Markets Authority</a>, or the <a href="/facts/US/P0sCdLe5">US</a> <a href="/facts/United_States_Department_of_Justice_Antitrust_Division/II22BCm8">Department of Justice</a> or <a href="/facts/Federal_Trade_Commission/Hkz0PwF9">Federal Trade Commission</a> are normally entrusted with the role of reviewing mergers.
Merger control regimes are adopted to prevent anti-competitive consequences of concentrations (as mergers and acquisitions are also known). Accordingly, most merger control regimes normally provide for one of the following substantive tests:

<ul><li>Does the concentration significantly impede <a href="/facts/Effective_competition/GwzH8j2H">effective competition</a>? (<a href="/facts/European_Union/6GYcR8qM">EU</a>, <a href="/facts/Germany/paluuWBX">Germany</a>)</li>
<li>Does the concentration substantially lessen competition? (<a href="/facts/United_States/P0sCdLe5">US</a>, <a href="/facts/United_Kingdom/kuPAILt2">UK</a>)</li>
<li>Does the concentration lead to the creation or strengthening of a dominant position? (<a href="/facts/Switzerland/LcGuxeTe">Switzerland</a>, <a href="/facts/Russia/jfkCwyxn">Russia</a>)</li></ul>
In practice most merger control regimes are based on very similar underlying principles. In simple terms, the creation of a dominant position would usually result in a substantial lessening of or significant impediment to <a href="/facts/Effective_competition/GwzH8j2H">effective competition</a>.
The large majority of modern merger control regimes are of an ex-ante nature, i.e. the reviewing authorities carry out their assessment before the transaction is implemented.
While it is indisputable that a concentration may lead to a reduction in output and result in higher prices and thus in a welfare loss to consumers, the antitrust authority faces the challenge of applying various <a href="/facts/Economics/HYctA2Dn">economic</a> theories and rules in a legally binding procedure.

Merger control open-in-new

Merger control