Merger Policy

Merger policy is arguably the most dynamic and most high-profile aspect of EU competition policy. Merger control as a weapon in DG Competition’s policy armoury is a recent development that dates only to 1990. The European Community Merger Regulation (ECMR) applies to ‘concentrations’ of economic power where two or more formally independent companies combine to create a single entity or where there is a change in control of one undertaking by another. The purpose of merger control is to enable competition authorities to regulate market structure. They do this by determining whether mergers should be allowed to take place. Mergers judged to have an adverse affect on competition will be prohibited. The pursuit of mergers involving household names such as Time Warner/EMI, PriceWaterhouse/Coopers & Lybrand, Boeing/McDonnell Douglas and General Electric/Honeywell attract huge media attention and frenzied political lobbying, ending up as quasi-theatrical events of almost Shakespearean power and intensity (Wilks 2005b:120). Mergers are as much about politics (see Zweifel 2003) as they are about economics and EU merger policy often involves heated interchanges between national governments and the Commission and open confrontation between the EU and the United States. The Commission’s merger policy is perhaps the most potent weapon at DG Competition’s disposal.