Econometrics study into European Commission merger decisions since 2000

The purpose of this study is to examine the factors taken into account by the European Commission (the" Commission") in its decisions under the EC Merger Regulation (the" ECMR"). The ECMR provides that a merger meeting its jurisdictional thresholds is to be prohibited (or cleared only following the provision of undertakings, eg to dispose of a business) if it creates or strengthens a dominant position as a result of which effective competition would be significantly impeded in the common market or a substantial part of it. 1 The ECMR itself specifies a number of factors which the Commission must take into account in determining this issue, 2 but the list is not exhaustive and, in any event, no indication is given as to the weight to be ascribed to the factors specified. The Commission's decisions have proved in certain instances to be controversial, provoking extensive debate about the policies applied by the Commission in reaching its determinations. The Commission, recognising the importance of transparency in this area, published draft guidelines on December 11, 2002, describing the criteria it will apply in analysing horizontal mergers. 3

Against this background, the study sought to analyse whether certain factors (including the market shares of the parties, the presence of barriers to entry and the existence of buyer power) influenced the Commission's decisions in merger cases and, if so, what weight was ascribed to them. We examined a random set of ECMR decisions in the period January 1, 2000 to June 30, 2002 and tested various hypotheses using logit regression models. The study is one of a growing literature applying regression models …