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Title: Assessing EU Merger Control through Compensating Efficiencies

Author(s): Pauline Affeldt, Tomaso Duso, Klaus Gugler and Joanna Piechucka

Publication Date: November 2021

Keyword(s): Compensating efficiencies, Concentration, Efficiency gains, Entry Barriers, HHI, Market Definition, Merger Control, mergers, Screens and Unilateral Effects

Programme Area(s): Industrial Organization

Abstract: Worldwide, the overwhelming majority of large horizontal mergers are cleared by antitrust authorities unconditionally. The presumption seems to be that efficiencies from these mergers are sizeable. We calculate the compensating efficiencies that would prevent a merger from harming consumers for 1,014 mergers affecting 12,325 antitrust markets scrutinized by the European Commission between 1990 and 2018. Compensating efficiencies seem too large to be achievable for many mergers. Barriers to entry and the number of firms active in the market are the most important factors determining their size. We highlight concerns about the Commission's merger enforcement being too lax.

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Bibliographic Reference

Affeldt, P, Duso, T, Gugler, K and Piechucka, J. 2021. 'Assessing EU Merger Control through Compensating Efficiencies'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=16705