Assessment of Mergers Inducing Coordinated Effects in the Presence of Explicit Collusion

Abstract

This article will analyse the issue of the assessment of the likelihood of a merger in a cartelised market inducing or enhancing coordinated effects. Although there is decisional practice on the impact of past coordination on the assessment of a merger’s likelihood of inducing coordinated effects, such decisional guidance is very rare as regards the assessment of mergers in cartelised markets. Mergers in cartelised markets should be assessed on a case–by–case basis. A presumption of illegality for such mergers should be avoided. A case–by–case analysis focusing on the pre–merger and post–merger market structure as well as on the incentives for continuing the collusion in the post–merger market has significantly more merit. Mergers in cartelised industries are not the cause of the adverse impact on competition. What should be assessed is the harm of the merger itself in the already anticompetitive market. If the merger induces a significant impediment to the existing level of reduced competition, then the merger should not be cleared (at least not without remedies). The concept of “significant” assumes great importance in such circumstances, as the merger may lead to an impediment but such impediment is not always significant in a market where explicit collusion occurs.