Journal Article

Mergers and Market Definition: Does a Focus on ‘Value Added’ Add Value?

Peter J. Davis and Urs Haegler

in Journal of European Competition Law & Practice

Volume 7, issue 5, pages 330-334
Published in print May 2016 | ISSN: 2041-7764
Published online March 2016 | e-ISSN: 2041-7772 | DOI: https://dx.doi.org/10.1093/jeclap/lpw015
Mergers and Market Definition: Does a Focus on ‘Value Added’ Add Value?

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The standard analytical framework used for the delineation of markets asks whether a hypothetical monopolist could profitably raise prices by 5–10 per cent.

However, the European Commission has in a few cases considered the incentive to increase value added (representing only a certain part of the final price) rather than the final price itself.

Adopting such an approach can make the outcome of merger investigation depend on the frame of reference adopted by the authority rather than the actual effects of the merger.

A better approach would be for competition authorities to consider the materiality of merger effects explicitly.

Journal Article.  4059 words. 

Subjects: Competition Law ; EU Law

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