Julie Clarke Thesis PDF

Theinternationalregulationof
transnationalmergers
Julie Clarke (student 02693585)

LLB (Deak), BA (Deak)
Supervisor: Prof Stephen Corones

Law & Justice Research Centre
The international regulation of transnational mergers
Julie Nicole Clarke

LLB (Deak), BA (Deak)
Submitted in total fulfilment of the requirements

of the degree of Doctor of Philosophy
2010
Supervisor: Professor Stephen Corones
Faculty of Law
Law & Justice Research Centre
Queensland University of Technology
Abstract
[MERGERS NOW
FREQUENTLY INVITE
ransnational mergers are mergers
MULTIPLE REGLATORY
involving firms operating in more than one
REPSONSES BECAUSE OF
jurisdiction, or which occur in one
THEIR POTENTIAL TO
jurisdiction but have an impact on competition in
IMPACT ON MORE THAN
another. Being of this nature, they have the
ONE ECONOMY]
potential to raise competition law concerns in

more than one jurisdiction. When they do, the
transaction costs of the merger to the firms
involved, and the competition law authorities,
are likely to increase significantly and, even
where the merger is allowed to proceed, delays
are likely to occur in reaping the benefits of the
merger. Ultimately, these costs are borne by
consumers.
This thesis will identify the nature and source of regulatory costs associated
with transnational merger review and identify and evaluate possible
mechanisms by which these costs might be reduced. It will conclude that
there is no single panacea for transnational merger regulation, but that a
multi-faceted approach, including the adoption of common filing forms,
agreement on filing and review deadlines and continuing efforts toward
increasing international cooperation in merger enforcement, is needed to
reduce regulatory costs and more successfully improve the welfare
outcomes to which merger regulation is directed.
Keywords
Merger, transnational merger, international competition network, OECD, comity
JulieClarkeTheInternationalRegulationofTransnationalMergers
Pagei
DECLARATION
The work contained in this thesis has not been previously submitted to meet
requirements for an award at this or any other higher education institution. To the
best of my knowledge and belief, the thesis contains no material previously
published or written by another person except where due reference is made.
Some portions of the thesis have been previously published by me as follows:
Julie Clarke, Multi-jurisdictional Merger Review Procedures: a Better Way (2006)

14 Trade Practices Law Journal 90-109
Julie Clarke, The Dawson Report and Merger Regulation (2003) 8 Deakin Law
Review 245
Julie Brebner, The Relevance of Import Competition to Merger Assessment in
Australia (2002) 10 Competition and Consumer Law Journal 119-143 (published
under my maiden name)
Signature
Date
Pageii
Table of Contents
Abstract................................................................................................................................i
Keywords..............................................................................................................................i
Declaration..........................................................................................................................ii
TableofContents...............................................................................................................iii
Tableofdiagramsandcharts..............................................................................................ix
Glossary...............................................................................................................................xi
PARTI:INTRODUCTION......................................................................................................1
Chapter1Introduction.......................................................................................................3
1.1Researchobjectives..................................................................................................3
1.1.1
Objectivesofmergerregulation..................................................................7
1.1.2
Theoptimalsubstantive,proceduralandjurisdictionalapproachesto
transnationalmergerregulation..................................................................7
1.1.3
Theefficienciesofexistingregulation.........................................................9
1.1.4
Potentialforgreaterefficiencyinregulation............................................10
1.2Scopeofthestudy..................................................................................................12
1.3Terminology...........................................................................................................16
1.3.1
Globalization..............................................................................................16
1.3.2
Competitionlaw.........................................................................................17
1.3.3
Mergersandtransnationalmergers..........................................................18
1.3.4
Regulation..................................................................................................19
1.3.5
Extraterritoriality.......................................................................................20
1.3.6
Comityandpositivecomity.......................................................................20
1.4Structure.................................................................................................................21
Chapter2Framework.....................................................................................................23
2.1Introduction............................................................................................................23
2.2Theeconomicsofmergers......................................................................................25
2.2.1
Competitionisbetterfortheeconomythanmonopoly...........................25
2.2.2
Increasedmarketdominancefacilitatedbymerger(unilateraleffects)...30
2.2.3
Coordinatedeffects...................................................................................32
2.2.4
Efficiency....................................................................................................33
2.2.5
Socioeconomicimpactofmergers...........................................................41
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2.3Policyobjectivesintheregulationofmergers........................................................42
2.3.1
Economicefficiency(traditionalconsumerwelfare).................................47
2.3.2
Beyondmereefficiencies(modernconsumerwelfare)...........................50
2.3.3
Globalconsumerwelfare...........................................................................59
2.4Policyobjectivesfortheproceduralregulationofmergers...................................62
2.4.1
Introduction...............................................................................................62
2.4.2
Purposeofmergerregulation....................................................................63
2.4.3
Criteriaforassessingtheregulationofmergerspriortoconsummation..65
2.4.4
Assessingdomesticregulation...................................................................70
2.4.5
Internationalregulation.............................................................................72
PARTII:NATIONALAPPROACHESTOMERGERREGULATION..........................................75
Chapter3ThesubstantiveapproachtomergerregulationinOECDcountries...............76
3.1Introduction.............................................................................................................76
3.2Marketdefinition....................................................................................................80
3.3Substantiallesseningofcompetition......................................................................85
3.3.1
Australia.....................................................................................................87
3.3.2
UnitedStatesofAmerica.........................................................................103
3.3.3
EuropeanUnion.......................................................................................114
3.4Dominance............................................................................................................122
3.4.1
Finland......................................................................................................123
3.4.2
Switzerland...............................................................................................124
3.5PublicBenefits.......................................................................................................125
3.6Analysisandconclusions.......................................................................................126
3.6.1
Overview..................................................................................................126
3.6.2
Market......................................................................................................128
3.6.3
Substantivetests......................................................................................129
3.6.4
Mergeranalysisandtheroleofefficiencies............................................135
3.6.5
Summaryofconclusions..........................................................................139
Chapter4TheproceduralapproachtomergerregulationinOECDcountries..............140
4.1Introduction...........................................................................................................140
4.2Mandatorypremergernotificationregimes.......................................................144
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4.2.1
UnitedStates...........................................................................................145
4.2.2
EuropeanUnion.......................................................................................160
4.3Voluntarynotificationregimes.............................................................................173
4.3.1
Australia...................................................................................................174
4.3.2
UnitedKingdom.......................................................................................186
4.4.1
Introduction.............................................................................................189
4.4.2
Optionsformergerregulation.................................................................192
4.4.3
Nomergernotification............................................................................193
4.4.4
Mandatorypremergernotification........................................................196
4.4.5
Voluntarypremergernotification...........................................................208
4.4.6
HybridPMN..............................................................................................218
4.4.7
IsthereanoptimalnationalapproachsuitableforallOECDcountries?.221
4.4.8
Isadifferentapproachneededfortransnationalmergers?...................223
4.4.9
Conclusion................................................................................................225
Chapter5TheExtraterritorialapplicationofdomesticlaws.........................................231
5.1Introduction..........................................................................................................231
5.2NationalSovereignty.............................................................................................233
5.3Territoriality..........................................................................................................235
5.3Extraterritoriality...................................................................................................238
5.3.1
Traditionalapplicationofdomesticlawsextraterritorially.....................239
5.3.2
Theeffectsdoctrine.................................................................................243
5.4Limitsonextraterritorialapplication....................................................................256
5.4.1
Naturallimitsonpower...........................................................................256
5.4.2
Blockingandclawbacklegislation............................................................258
5.5Extraterritorialityinrelationtomergers...............................................................261
5.6Multipleextraterritorialclaimsandthepotentialforconflict..............................262
5.7Analysis:Istheextraterritorialapplicationofmergerlawsappropriate?............271
5.8Conclusions...........................................................................................................280
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PartIII:COMITYANDCOOPERATION..............................................................................283
Chapter6Theroleofcomityinmergerreview.............................................................283
6.1Introduction...........................................................................................................283
6.2Thenatureofcomity.............................................................................................284
6.3Negativecomity....................................................................................................287
6.4Positivecomity......................................................................................................290
Chapter7BeyondComity:Internationalcooperation...................................................300
7.1Introduction...........................................................................................................300
7.2BilateralandTrilateralcompetitionlawagreements...........................................304
7.2.1
AntitrustCooperationAgreements..........................................................306
7.2.2
AntitrustMutualAssistanceAgreements................................................315
7.2.3
UK/France/GermanyCommonForm(1997current)..............................317
7.2.4
Currenteffectivenessofbilateralagreements........................................317
7.3PlurilateralandMultilateralendeavours..............................................................320
7.4OECD......................................................................................................................322
7.4.1
CompetitionRecommendations..............................................................323
7.4.2
Mergerrecommendations.......................................................................324
7.4.3
AnalysisofOECD......................................................................................331
7.5InternationalCompetitionNetwork......................................................................332
7.5.1
Guidingprinciplesandrecommendations...............................................333
7.5.2
RecommendedPracticesforMergerNotificationProcedures................335
7.5.3
RecommendedPracticesforMergerAnalysis.........................................364
7.5.4
Other........................................................................................................371
7.5.5
AnalysisofICN..........................................................................................371
PARTIV:THECOSTOFCOMPLIANCE..............................................................................375
Chapter8Thecostoftransnationalmergerregulation.................................................376
8.1Introduction...........................................................................................................376
8.2Thecurrentcostofmergerregulation..................................................................378
8.2.1
Introductionandcostallocation..............................................................378
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8.2.2
Thecosttobusiness.................................................................................384
8.2.3
Thecosttothirdparties...........................................................................411
8.2.4
Thecosttoauthorities.............................................................................411
8.2.5
Thecosttothepublic..............................................................................413
8.3AnalysisandConclusion........................................................................................415
PARTV:OPTIONSFORREFORM,PROPOSAL&CONCLUSIONS......................................417
Chapter9OptionsforReform........................................................................................419
9.1Introduction..........................................................................................................419
9.2ComprehensiveInternationalCode......................................................................422
9.2.1Overview........................................................................................................422
9.2.2Previousattemptsatproducinganinternationalcode.................................423
9.2.3Thecaseforaninternationalmergercode....................................................433
9.2.4Thecaseagainstaninternationalcode.........................................................435
9.2.5Analysisandconclusions................................................................................451
9.3Limitedinternationalcode....................................................................................452
9.4Internationalproceduralclearinghouse..............................................................454
9.4.1Overview........................................................................................................454
9.4.2Thedeferredjurisdictionapproach...............................................................456
9.4.3Mutualrecognition........................................................................................461
9.4.4Singlefiling.....................................................................................................462
9.4.5Thefacilitativeleadjurisdictionapproach.....................................................465
9.4.6AnalysisandConclusion.................................................................................469
9.5CommonFilingForm.............................................................................................470
9.5.1Overview........................................................................................................470
9.5.2Benefitsofacommonfilingform..................................................................471
9.5.3Thefeasibilityofacommonfilingform.........................................................472
9.5.4Analysisandconclusions................................................................................481
9.6Nonbindinginternationalprinciples....................................................................483
9.6.1Overview........................................................................................................483
9.6.2Locationofnonbindingprinciples................................................................484
9.6.3Contentofnonbindinginternationalprinciples...........................................489
9.6.4Analysisandconclusion.................................................................................497
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9.7Continuedbilateralcooperationandnaturalconvergence..................................498
9.8AnalysisandConclusions.......................................................................................499
Chapter10ConclusionandProposals.............................................................................501
10.1Conclusions.........................................................................................................501
10.1.1Thegoalsoftransnationalmergerreview...................................................501
10.1.2Nationalapproachestotransnationalmergerreview.................................503
10.1.3Existinglevelsofcooperation......................................................................506
10.1.4Thecostsoftransnationalmergerreview...................................................507
10.1.5Possiblefuturedirectionsfortransnationalmergerreview........................508
10.2Proposalforthefuturedirectionoftransnationalmergerregulation...............509
10.3DraftOECDRecommendationforMergerNotificationandReview...................515
Appendix1OECDCountryDatabase..............................................................................A1
Appendix2ICNRecommendations................................................................................A2
Bibliography......................................................................................................................B1
Pageviii
Table of diagrams and charts

Chapter2Framework
Figure2.1 Supplyanddemand......................................................................27
Figure2.2 Monopolyproduction..................................................................28
Chapter4TheProceduralApproachtoMergerRegulationinOECDCountries
Table4.1 PreMergerNotificationRequirementsforMergers2010........141
Figure4.2 UnitedStatesAdministrativeand
JudicialStructureforMergerReview.........................................147
Figure4.3 EuropeanUnionAdministrativeand
Figure4.4 AustralianAdministrativeandJudicial
StructureforMergerReview.....................................................176
Figure4.5 UnitedKingdomAdministrativeand
Figure4.6 AHybridApproachtoPreMergerNotification.........................220
Chapter8TheProceduralApproachtoMergerRegulationinOECDCountries
Figure8.1CostAllocationWhereTherearenoNotificationFees.............378
Figure8.2CostAllocationWhereAgency
PartyFundedbyNotificationFees.............................................378
Figure8.3 CostAllocationWhereAgency
FullyFundedbyNotificationFees..............................................378
Figure8.4 ProcompetitiveMergerWhere
AgencyPartlyFundedbyParties................................................380
Figure8.5 AnticompetitiveMergerWhere
AgencyPartlyFundedbyParties................................................380
Figure8.6 CostSynergiesofTransnational
MergerReviewforAgencies.....................................................381
Figure8.7 AverageCosttoAgenciesofCooperativeMultipleReview......382
Figure8.8 CumulativeCosttoPartiesofMultipleReview........................383
Figure8.9 FilingFeesinOECDJurisdictionsandtheEU.....................395396
Figure8.10RelativeFilingFeesinOECDJurisdictions.................................396
Pageix
Figure8.11TimeTriggersforFiling..............................................................403
Figure8.12DelayResultingfromMultipleMergerReviews.......................405
Figure8.13MergerReviewPeriodsinOECDCountries...............................406
Chapter9OptionsforReform
Figure9.1 MergerGeneratingGlobalWelfareBenefitbut
NationalWelfareDetriment......................................................439
Figure9.2(a)Mergergeneratesglobalwelfarebenefitbutmerger
blockedduetonationalwelfaredetrimentinCountryB.........440
Figure9.2(b)MergerGeneratesGlobalWelfareBenefitbutTargeted
MergerRemediesareImposedbyCountryBdueto
NationalWelfareDetriment......................................................440
Figure9.2(c)MergerGeneratesGlobalWelfareBenefitbutMerger
RemediesImposedbyCountryBproducenegative
externalitiesinCountryA..........................................................441
Pagex
Glossary
AAA
Administrative Arrangement on Attendance (US/EC)
ABA
American Bar Association
ACA
Antitrust Cooperation Agreement
ACCC
Australian Competition and Consumer Commission
ACPA
Antitrust Civil Process Act (USA)
ACT
Australian Competition Tribunal
Agencies
Collectively, the DOJ(AD) and FTC
AMAA
Antitrust Mutual Assistance Agreement
ANZCERTA
Australia/New Zealand Closer Economics Relations Trade

Agreement
APEC
Asia Pacific Economic Cooperation
BIAC
Business and Industry Advisory Committee
CFI
Court of First Instance (EU)1
CID
Civil Investigative Demand (USA)
CLPC
Committee on Competition Law and Policy (OECD)2
The Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing
the European Community of 13 December 2007 European [2007] OJ C 306 (entered into
force 1 December 2009) (Treaty of Lisbon) renamed the Court of First Instance the General
Court. For cases decided prior to 1 December 2009 the court will continue to be referred to
as the Court of First Instance.
Pagexi
Common Market Common Market of the European Union (see Internal Market)
COMP
Competition Committee (OECD)
Compact
Protocol for Coordination in Merger Investigations Between the

Federal Enforcement Agencies and the State Attorneys General
(US Compact)
COMPWP2
Working Party No 2 on Competition and Regulation (OECD)
COMPWP3
Working Party No 3 on Cooperation and Enforcement (OECD)
Convergence
Refers to the process of different national merger laws, over

time, becoming more closely aligned3
DG-COMP
Directorate General of Competition (EU)
DIAC
Draft International Antitrust Code
DOJ
Department of Justice (US)
DOJ(AD)
Department of Justice (Antitrust Division) (US)
EC
European Commission4
ECA
European Competition Authorities
This committee was renamed the Competition Committee in 2001 (1017th Session of the
OECD Council, C/M (2001)23, item 402, document C(2001)261), but documents produced
prior to this date retain the CLPC acronym.
Harmonization and convergence are defined in the same way throughout this thesis. This
reflects the general usage of these terms in relation to international competition law; in this
respect Campbell and Rowley claim that the word convergence entered competition
policy rhetoric as a euphemism to replace the politically incorrect concept of harmonization
: A Neil Campbell and J William Rowley, 'The Internationalization of Unilateral Conduct
Laws - Conflict, Comity, Cooperation and/or Convergence?' (2008-2009) 75 Antitrust Law
Journal 267, 315.
The Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009) changed the
official title of the Commission from the Commission of the European Communities to the
European Commission.
Pagexii
ECJ
European Court of Justice5
ECMR
European Commission Merger Regulation6
ECN
European Competition Network
EU
European Union / European Community7
EUMR
European Commission Merger Regulation8
FCO
Federal Cartel Office (Germany)
FTAIA
Foreign Trade Antitrust Investment Act (US)
FTC
Federal Trade Commission (US)
FTCA
Federal Trade Commission Act (USA)
GATT
General Agreement on Tariffs and Trade
GCF
Global Competition Forum (IBA)
GFC
Global Forum on Competition (OECD)
Hard law
Binding agreements, such as treaties
Harmonisation
Refers to the process of different national merger laws, over

time, becoming more closely aligned
The Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009) resulted in the
renaming of the European Court of Justice to the Court of Justice.
Council Regulation (EC) 139/2004 of 20 January 2004 on the Control of Concentrations
Between Undertakings [2004] OJ L 24 (replacing Council Regulation (EC) No 4064/89 of 21
December 1989 on the Control of Concentrations Between Undertakings [1989] OJ L 395)
(previously referred to as the European Community Merger Regulation (ECMR), as a result
of the entry into force of the Treaty of Lisbon [2007] OJ C 306 (entered into force 1
December 2009) it is now referred to as the European Union Merger Regulation (EUMR)).
The Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009) replaced all
references to European Community with European Union.
Council Regulation (EC) 139/2004 of 20 January 2004 on the Control of Concentrations
Between Undertakings [2004] OJ L. See also ECMR.
Pagexiii
HHI
Herfindahl-Hirschman Index
HSR
Hart-Scott-Rodino
IAA
International Antitrust Agency (proposed as part of the DIAC)
IAP
International Antitrust Panel (proposed as part of the DIAC)
IBA
International Bar Association
ICC
International Chamber of Commerce
Internal Market
The internal market of the European Union9
ITO
International Trade Organisation
MLAT
Mutual Legal Assistance Treaty
Multi-jurisdictional Refers to the review of mergers by more than one jurisdiction

review
NZCC
New Zealand Commerce Commission
OECD
Organisation for Economic Cooperation and Development
OFT
Office of Fair Trading (UK)
PMN
Pre-merger Notification
SIEC
Significantly Impede Effective Competition
SLC
Substantial Lessening of Competition
The Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009) replaced all
references to common market with internal market. As some quotes and other references
retain references to the common market, particularly where referring to cases prior to the
entry into force of the Treaty of Lisbon, the terms will be used synonymously throughout.
Pagexiv
Soft law
Non-binding agreements, best practices, recommendations and

other documents. Compare hard law.
TFEU
Treaty on the Functioning of the European Union10
TPA
Trade Practices Act 1974 (Australia)
Transnational
Refers to a merger which is required to be notified in more than

one jurisdiction.
Type I error
Refers to the situation where a competitively benign merger is

blocked
Type II error
Refers to the situation where an anti-competitive merger is

allowed to proceed
UK
United Kingdom
UN
United Nations
US
United States of America
WGTCP
Working Group on the Interaction of Trade and Competition

(WTO)
WTO
10
World Trade Organization
More commonly known as the Treaty of Rome. Prior to the entry into force of the Treaty of
Lisbon [2007] OJ C 306 (entered into force 1 December 2009), the official name for the
Treaty of Rome was the European Community Treaty.
Pagexv
PART I: INTRODUCTION
orporate mergers are a worldwide phenomenon involving trillions of

dollars1 and have the potential to significantly impact upon national
economies. For these reasons more countries now seek to control them
through competition law regimes2 with the result that an increasing number of
mergers now invite multiple regulatory responses because they have an impact in
more than one country.3
The increased regulation of mergers has resulted in increased costs to business
and regulators4 which have the potential to be passed on to consumers and the
The value of worldwide announced deals was estimated at US$3.46 trillion in 2000, US$1.7
trillion in 2001 and US$1.2 trillion in 2002 (being the lowest since 1994): Casey Cogut and
Sean Rodgers, Global Overview in Casey Cogut (ed), Getting the Deal Through, Mergers &
Acquisitions in 48 Jurisdictions Worldwide 2003 (2003) 3. In 2008 the worldwide volume of
announced deals was US$2.9 trillion, down 30% from 2007: Casey Cogut and Sean
Rodgers, Introduction in Casey Cogut (ed), Getting the Deal Through, Mergers &
Acquisitions in 58 Jurisdictions Worldwide 2009 (2009) 3. In the US alone, the dollar value
of notified transactions was almost $2 trillion in 2007, dropping to just over $1.3 trillion in
fiscal year 2008: Federal Trade Commission and Department of Justice, Hart-Scott-Rodino
Annual Report Fiscal Year 2008: Section 7A of the Clayton Act, Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (Thirty-first Annual Report) (2008) 5.
An estimated 115 jurisdictions adopting merger laws as part of their competition policy: John
Arden, Record Number of Jurisdictions Regulate Mergers, New Aspen Publication Finds (8
January 2009) Trade Regulation Talk <http://traderegulation.blogspot.com/2009/01/recordnumber-of-jurisdictions-regulate.html> at 21 January 2010. See generally Cogut and
Rodgers, Global Overview, above n 1, 3; ICN, 'Merger Notification Filing Fees' (Mergers
Working Group, April 2005) 2; Chris Noonan, The Emerging Principles of International
Competition Law (2008) 62.
See generally Lise Davey and John K Barker, 'Merger Review Benchmarking Report'
(Competition Bureau (Canada), 2001) 7 and ICPAC, 'International Competition Policy
Advisory Committee to the Attorney General and Assistant Attorney General for Antitrust Final Report' (Department of Justice, United States, 2000) 2 (ICPAC Final Report).
Various terms are used to describe competition authorities, sometimes reflecting the
different functions they perform. The terms include authorities, regulators and agencies
and throughout this thesis these words will be used synonymously to refer to those national
(or supranational in the case of the EC) bodies responsible for enforcing merger laws and
regulations, including pre-merger notification regimes.
Chapter1|Page1
general public through higher product costs, delays in the realisation of mergergenerated benefits and increased taxes to support the regulation. It is important,
therefore, to monitor the level and manner of regulation imposed on business to
ensure that the benefits of the regulation are not outweighed by the associated
detriments. In particular, it is prudent to regularly assess the potential for a
reduction in the regulatory burden where this can be achieved without sacrificing
the regulatory objectives. It is to this end that this research is directed.
In this part, the specific research objectives and parameters are identified and a
theoretical framework for analyzing existing and possible alternate approaches to
merger regulation is established.
Chapter1|Page2
Chapter 1 Introduction
1.1 Research objectives
lobalisation and the associated expansion of markets,5 has generated an

increase in international mergers as firms seek to strengthen their
position for strategic advantage.6 The widening of markets has also
increased the potential for the effects of transnational mergers to extend beyond
the physical location of the firms involved, thereby arousing the interests of
multiple regulators. This, combined with the explosion of national merger
regimes over the past few decades,7 means that more mergers are now being
subjected to multiple filing requirements.8 Associated with this is the need to
navigate, at considerable time and expense, differing substantive, analytical and
procedural requirements as well as incurring the expenses associated with filing
notifications in multiple jurisdictions9 and the risk that there may be a conflict of
outcomes.10 Although it is difficult to quantify precisely the cost attributable to the
review of transnational mergers, that there is a significant cost to business
associated with multi-jurisdictional merger review is now widely acknowledged
and has been the subject of a recent detailed study.11 The increased costs
5
6
8
9
10
11
See generally Noonan, above n 2, 8.

Michael A Utton, International Competition Policy: Maintaining Open Markets in the Global
Economy (2006) 73. See also Oliver Budzinski, The Governance of Global Competition:
Competence Allocation in International Competition Policy (2008) 29 and Noonan, above n
2, 9.
The number of jurisdictions adopting competition laws has increased from 20 in the early
1990s to well over 100 today: see Brendan Sweeney, 'Global Competition: Searching for a
Rational Basis for Global Competition Rules' (2008) 30 Sydney Law Review 209, 210 fn 2
and Michal S Gal, Competition Policy for Small Market Economies (2003) 8. See also
Arden, above n 2.
See, eg, Noonan, above n 3, 10 and 182.
These often include translation requirements: Cogut and Rodgers, Global Overview, above
n 1, 3.
Utton, above n 6, 73.
See PriceWaterhouseCoopers, 'A Tax on Mergers? Surveying the Time and Costs to
Business of Multi-jurisdictional Merger Reviews' (June 2003) and ICN, 'Report on the Costs
and Burdens of Multijurisdictional Merger Review' (Mergers Working Group, Notification and
Procedures Subgroup, November 2004). See also ICPAC Final Report, above n 3, 91.
Chapter1|Page3
associated with compliance are not, however restricted to the firms involved, but
extend to regulators whose workloads and associated costs have burgeoned in
recent years.12 These regulators are typically financed either by the parties
making application, the taxpaying public at large or a combination of the two.
The consumer public may also suffer loss if potentially pro-competitive mergers
are delayed or thwarted13 by regulation14 and indirectly as firms seek to pass on
their costs through increased prices.
The existence of these costs does not, in itself, demonstrate any need for reform;
these costs might be considerably less than the cost society would incur social
and economic should anti-competitive mergers be allowed to flourish.15
However, it is clear that the potential for merger regulation to significantly impact
on business,16 regulators17 and, ultimately, the consumer and taxpaying public,
renders the study of alternative approaches aimed at ensuring the regulation is
both appropriate and efficient in its application, one of considerable importance.
This has been recognized in recent years, with merger processes now occupying
the forefront of international competition law debate. Over the past decade,
recommendations of the OECD and the International Competition Network (ICN),
as well as an increased level of bilateral cooperation, have significantly improved
consistency and cooperation in this field, but high compliance costs, duplication
12
13
14
15
16
17
See, eg, Competition Bureau (Canada), Merger Review Performance Report (2007) 6-7.
See generally Elhauge and Geradin, above n 19, 911-912.
See John E Lopatka and William H Page, ''Obvious' Consumer Harm in Antitrust Policy: the
Chicago School, the Post-Chicago School and the Courts' in (ed) Post-Chicago
Developments in Antitrust Law (2002), 132: Unduly broad antitrust prohibitions can
themselves harm consumers by deterring actively beneficial conduct.
The US Federal Trade Commission estimates that merger enforcement has saved
consumers US$2.5 billion in the five year period from 2004-2008: Federal Trade
Commission, Performance and Accountability Report: Fiscal Year 2008 (2008) 38.
Compare Philip Nelson, 'A Review of the Antitrust Agencies Estimates: Consumer Savings
from Merger Enforcement' (2001) 15 Antitrust ABA 83 and Philip Nelson and Su Sun,
'Consumer Savings from Merger Enforcement: A Review of the Antitrust Agencies'
Estimates' (2001) 69 Antitrust Law Journal 921.
See PriceWaterhouseCoopers, above n 11 and ICPAC Final Report, above n 3, 3.
See, eg, Davey and Barker, above n 3, 6, observing that the Canadian Competition Bureau
needed additional resources in the mid-1990s to deal with the burgeoning wave of new
mergers resulting in large part from globalisation and free trade.
Chapter1|Page4
and uncertainty remain a feature of the transnational merger review process.

The inefficiencies associated with the current regulation of transnational
mergers18 has generated widespread acknowledgment that continued efforts
toward a more harmonized19 or coordinated system at least procedurally
would be desirable.20
Although the desirability for greater procedural harmonization, where appropriate,
has achieved wide support, at least at a theoretical level, the same cannot be
said of substantive convergence;21 the form any such convergence should take
and the desirability of such a result remains an issue of considerable debate,
with many fearing harmonization could only be achieved by reducing existing
standards to a lowest common denominator.22 The approach to the substantive
regulation of mergers at a domestic level is, in many countries, one which
arouses passionate differences of opinion between businesses, economists,
lawyers and sociologists. At an international level these differences are
magnified, with the result that transnational mergers cause some of the most
complex problems23 for competition policy.
The challenges posed by the regulation of transnational mergers are unique and
merit targeted study. Unlike other forms of potentially anti-competitive conduct,
18
19
20
21
22
23
See generally Robert Paul, The Increasing Maze of International Pre-Acquisition

Notification (2000) 11 International Company and Commercial Law Review 123. Despite
the rhetoric of increased harmonization and cooperation, some claim that there remains a
significant gulf between words and action: J William Rowley and M Opashinov, The
Internationalisation of Merger Review: Towards Global Solutions, in John Davies (ed),
Merger Control 2003, Getting the Deal Through (2003), 5.
For a detailed discussion of the concept of harmonization in this context, see Noonan, above
n 2, 14-17.
See generally Rowley and Opashinov, above n 18, 5. See also Christine A Varney,
Coordinated Remedies: Convergence, Cooperation, and the Role of Transparency (Speech
delivered to the Institute of Competition Law, New Frontiers of Antitrust Conference, Paris,
15 February 2010) 2.
See, eg, Sweeney, above n 7, 242.
See, eg, A Douglas Melamed, 'International Antitrust in an Age of International Deregulation'
(1998) 6 George Mason Law Review 437. Compare Joseph Wilson, Globalization and the
Limits of National Merger Control Laws (2003) 238.
Chapter1|Page5
mergers are time-sensitive and frequently subjected to mandatory ex ante review,

which imposes significant costs for firms involved in pro-competitive and anticompetitive mergers alike. This has implications for the development of policy,
both domestically and at a supranational level. In relation to most forms of anticompetitive conduct, and particularly in relation to cartel conduct, the regulatory
goals of deterrence, detection and punishment are likely to be enhanced as the
number of jurisdictions implementing and actively enforcing those laws
increases.24 In relation to merger laws, however, the increasing number of
countries employing an ex ante review process significantly increases
compliance costs for firms and for regulators and has implications for a high
proportion of mergers that would normally be considered socially desirable.
Consequently, although there has been a significant push for development of
international competition law principles, a more targeted approach may be
required for merger review to appropriately address concerns about overregulation.
This research is directed toward evaluating the potential for a more harmonized
and coordinated system of merger regulation and its economic and social
desirability. In particular, it is directed toward the following key objectives:
Identifying the appropriate policy objective(s) for transnational merger

regulation;
Identifying the optimal national substantive, procedural and jurisdictional

approaches to transnational mergers;
Identifying the nature of the costs and benefits associated with the
current approach to transnational merger regulation; and
24
Although it is acknowledged that the business cost of compliance may increase as the
number of regimes adopting competition law increases, the focus remains on complying with
substantive legal obligations only, rather than the additional ex ante procedural layer
associated with transnational merger review.
Chapter1|Page6
Examining the potential for developing and implementing a more

efficient regulatory regime for transnational mergers and making
recommendations in that respect.
1.1.1 Objectives of merger regulation

An assessment of the current regulation of transnational mergers must be made
against a defined objective. Determining that objective is no simple task. Not
only do existing national merger regulations reflect different policy objectives, but
debate rages at a domestic level about both the actual goals of merger regulation
reflected in legislative instruments and about the aspirational policy goals. The
result is more than 10025 merger regimes around the globe which reflect a
multitude of objectives and substantive, analytical and procedural approaches.
Against a background of divergent domestic objectives is added a new policy
layer where mergers have transnational effects. Determination of appropriate
objectives is the subject of chaper two, which concludes that the most
appropriate goal for transnational merger regulation is global modern consumer
welfare. In relation to merger review procedures, chapter two notes that they
should be directed toward ensuring identification and prevention of anticompetitive mergers prior to consummation and that the cost of doing so should
not exceed the benefits sought to be achieved. In particular, the incidental cost
imposed on parties to mergers which do not raise competition concerns should
be minimized.
1.1.2 The optimal substantive, procedural and jurisdictional
approaches to transnational merger regulation
The second key research objective is the identification of the optimal substantive,
procedural and jurisdictional approaches to transnational merger regulation
needed to achieve the identified global welfare standard. This involves
25
See Arden, above n 2.
Chapter1|Page7
consideration of different national substantive tests and procedural approaches to

merger regulation with a comparative assessment made of their respective
benefits and limitations in achieving this objective.
The substantive assessment of merger laws that is, those laws determining
which mergers should be allowed to proceed involves both an assessment of
the laws or regulations themselves and the application of those laws in practice.
Chapter three concludes that a competition test, which focuses on the
preservation of competitive markets, is to be preferred over a test directed only
toward preventing market dominance or a test incorporating non-competition
public interest considerations.
Procedural requirements are then examined. In the context of competition laws
and most areas of law enforcement, mergers have the unusual feature of
(normally) being assessed prior to consummation, facilitated by the requirement,
in most jurisdictions, for parties to provide advance notification of proposed
mergers. This requirement is attributable to the unique opportunity mergers
provide for advance assessment (in that they are necessarily public rather than
clandestine) combined with the fear that the structural change brought about by a
merger may be difficult to remedy should the merger subsequently prove to be
anti-competitive.26 The ex ante review of mergers does, however, inevitably
capture a large number of mergers having no anti-competitive potential; the lower
the threshold requirements, the greater is the potential to capture competitively
neutral or pro-competitive mergers. Chapter four concludes that while mandatory
pre-merger notification is appropriate, at least for large economies, efforts must
be made to ensure that the cost of that process, particularly for those mergers
raising no serious competition concerns, is minimised.
Chapter five will assess the jurisdictional issues arising from the regulation of
transnational mergers. In particular, it will examine the key tests invoked when
26
See, eg, Elhauge and Geradin, above n 13, 800.
Chapter1|Page8
countries assert jurisdiction over foreign mergers. This involves a consideration

both of current practice and of the underlying justification for such practice. It is
now widely accepted that countries may claim jurisdiction based on anticipated
economic effects, provided those effects would be significant. It is also common
practice to recognise the right of a country to impose ex ante notification
requirements based on objective financial thresholds, even where many mergers
captured by that requirement are unlikely to produce significant economic effects.
Despite current broad acceptance of these jurisdictional claims, their validity in
international law and as a matter of public policy must nevertheless be
considered to inform and justify future policy development in this area. If, for
example, the tenuous jurisdictional basis upon which ex ante notification
obligations are based was to be considered unjustifiable in principle, the long
term sustainability of such an approach would be called into question. Chapter
five concludes, however, that economic effects based approach to jurisdiction,
including the adoption of financial proxies for triggering notification requirements,
is appropriate for transnational merger review.
1.1.3 The efficiencies of existing regulation
The third key objective of this research involves identifying the costs and benefits
associated with the current regulation of transnational mergers. The costs
associated with procedural and substantive compliance are not capable of
calculation in mathematical terms. First, the costs are not purely economic, with
the result that the cost/benefit dichotomy of mergers will provide a distorted view
of the merits or otherwise of merger regulation. The second reason is that, even
in relation to those costs and benefits that are capable of economic assessment,
the empirical data necessary in order to make a comprehensive assessment is
currently lacking. Nevertheless, an assessment of the sources of cost, combined
with the empirical data that does exist, suggests that those costs are significant.27
27
See, eg, ICPAC Final Report, above n 3, 91.
Chapter1|Page9
These costs are both direct, such as through payment of filing fees and the
preparation of documentation, and indirect, such as those costs resulting from
delays and shareholder uncertainty and the allocation of executive time to the
compliance process. These costs are magnified for transnational mergers, where
the concurrent operation of national law frequently necessitates multiple
notifications. The full nature and level of these costs will be considered in detail
in chapter eight and will provide a platform for the assessment of possible
alternate approaches to regulation.
1.1.4 Potential for greater efficiency in regulation
The final and key research objective is to determine whether or not there is
potential for a more efficient system of regulating transnational mergers.
Regulation which restricts free activity amongst business requires clear
justification in public policy and, even where theoretically justified, implementation
of that policy should be designed to achieve that objective at the least possible
cost both financially and with respect to the restriction it imposes on the free
market. The cost and efficiency of the current system of transnational merger
regulation will, therefore, be assessed against possible alternatives or modified
approaches, with a view to determining the most optimal approach to
transnational merger review that is both capable of achieving the identified
objectives while remaining politically viable.
Chapter nine examines possible alternative approaches to multi-jurisdictional
merger regulation. It concludes that the development of a supranational code
and/or the establishment of a supranational regulator or review body would be
neither globally optimal nor politically feasible. Chapter nine further concludes
that deferral of jurisdiction to a lead regulator would not be appropriate or viable
as an alternative to concurrent national review. In this respect, it differs from
some earlier research in the field which has focussed at length on the risk of
Chapter1|Page10
conflicting outcomes, with the result that recommendations have been directed
toward removing or limiting that conflict through the establishment of
supranational regulators28 or the identification of lead jurisdictions having decision
making power.29
After acknowledging that the majority of the excess cost associated with multijurisdictional merger review can be attributed to procedural duplication and
conflicting notification requirements rather than to substantive divergence and the
risk of conflicting outcomes, chapter 9 concludes that the future regulation of
multi-jurisdictional merger review requires a multilayered approach, building on
existing cooperative efforts. The first layer involves national efforts toward
implementation of optimal merger review processes, including through
implementation of existing international best practice recommendations. The
second layer involves continued efforts within the OECD and ICN toward
developing and promoting best practice, combined with the continued
implementation of bilateral and plurilateral merger agreements. These efforts can
assist in promoting convergence, cooperation and comity principles where
appropriate. The third layer involves a more substantial international
commitment, but falls short of developing an international code or regulatory
body. A new OECD Council recommendation should be developed to provide
renewed incentives for government to appropriately revise their substantive and
procedural laws to reflect existing best practice and to provide for the
establishment of an opt in voluntary common notification form for transnational
mergers. Adoption of such a form could reduce existing duplication and
28
29
See, eg, Martyn Taylor, International Competition Law - A New Dimension for the WTO?
(2006) 416 and Joseph Wilson, Globalization and the Limits of National Merger Control
Laws: Gaps in Global Governance and the Need for an International Merger Control Regime
(Doctor of Civil Law Thesis, McGill University, 2002) and Daniel J Gifford, 'The Draft
International Antitrust Code Proposed at Munich: Good Intentions Gone Awry' (1997) 6
Minnesota Journal of Global Trade 1.
See, eg, Michele Giannino, International Cooperation and the Regulation of Transnational
Mergers (D Phil Thesis, Queen Mary College of University of London, 2006) 276.
Chapter1|Page11
divergence in PMN requirements which are not necessary to further the policy
objectives of merger regulation.
1.2 Scope of the study

The scope of the study is potentially very broad and, as a result, the parameters
of the analysis have been limited in the following ways:
Study focuses on OECD30 countries and the EU

There are an estimated 110 countries worldwide adopting merger
regimes as part of their competition policies.31 In a study of this size it is
not possible to usefully examine each of these regimes in detail for
purposes of making recommendations for future reform. Consequently,
the scope of the study has been limited to OECD countries and the EU.
OECD countries have been selected because of their shared
commitment to global economic development and because they already
play a key role in responding to emerging economic issues and
associated policies.32 Any future cooperation is significantly more likely
30
31
32
Assessment of OECD countries does not include detailed analysis of the Chilean regime.
Chile was admitted to the OECD, becoming its 31st Member, on 11 January 2010. This
study does not include discussion of Chiles merger law and procedures. However, it is not
anticipated that the inclusion of Chile into the OECD does not effect the conclusions reached
in this study.
See Arden, above n 2. See also American Antitrust Institute, Centralizing Merger Controls
(2009), Summary of Session at 10th Annual Conference, 25 June 2009. These countries
include Albania, Argentina, Armenia, Australia, Austria, Barbados, Belgium, Brazil, Bulgaria,
Canada, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark,
Estonia, European Union, Finland, France, Germany, Greece, Hungary, Iceland, India,
Indonesia, Ireland, Israel, Italy, Japan, Jersey, Jordan, Kenya, Korea, Latvia, Lithuania,
Macedonia, Malta, Mexico, Netherlands, New Zealand, Norway, Pakistan, Panama, Papua
New Guinea, Poland, Portugal, Romania, Russia, Singapore, Slovak Republic, Slovenia,
South Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, Ukraine, United Kingdom,
United States, Uzbekistan, Venezuela, Zambia.
Compare Maher M Dabbah, The Internationalisation of Antitrust Policy (2003) 265-266 who
rejects the OECD as an appropriate forum for future international agreement. However,
Chapter1|Page12
among countries that have similar trade patterns,33 with additional and
often complex issues arising when the spectrum is expanded to include
a broader range of countries, including those in the developing world.34
More importantly, OECD countries have been selected because they
possess some of the most developed merger regimes and are likely to
play a pivotal role in directing any global reform in this area. This is, at
least in part, due to the fact that the OECD countries currently produce
the vast majority of transnational mergers.35
In addition to the OECD, the EUs approach to merger regulation will be
considered. Several OECD member nations are also EU members with
the result that any transnational mergers having an EU dimension will
fall for consideration under European, rather than national law. The EU
has also recently acquired legal personality enabling it to directly join
international organisations and sign international treaties,36 which might
enable it to wield greater influence in international competition law
discourse in the future. Inclusion of the EU in this study is also
inherently valuable for the example it provides of a successful
supranational approach to transnational merger regulation.
33
34
35
36
Dabbah was discussing the possibility of agreement on competition principles generally,

rather than merger regulation specifically, and this may justify a different approach.
See Andrew Guzman, 'Is International Antitrust Possible?' (1998) 73 New York University
Law Review 1501, 1505.
See, for example, Gary Hufbauer and Jisun Kim, 'International Competition Policy and the
WTO' (2009) 54 Antitrust Bulletin 327, 331. See also Kathryn McMahon, 'Developing
Countries and International Competition Law and Policy' (Research Paper No 2009/11,
Warwick School of Law, 2009). See also ICPAC Final Report, above n 3, 50: Immature
market systems are often so lacking in resources that the agencies cannot conduct
sophisticated economic analysis, much less gather the basic background facts necessary for
them to do so.
Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the
European Community of 13 December 2007 European [2007] OJ C 306 (entered into force
1 December 2009).
Chapter1|Page13
Limitation of the study in this way necessarily excludes some significant

jurisdictions, including China.37 The significance of Chinas new merger
law was recently highlighted by Chinas interest in the recent takeover
bid by BHP Billiton for Rio Tinto38 and its likely interest in the current joint
venture agreement between those two companies.39 However, the
recent introduction of the Chinese merger laws suggests that it is likely
to prove difficult in the short term to agree to significant modifications.
The same is true of other new and emerging regimes.
In restricting this study to OECD nations and the EU, this study differs
from most other recent studies in this field40 which have grappled with
the complexities of achieving agreement among a large number of
countries with varying experience and resources and which are at vastly
different stages of economic and industrial development. As a
consequence, the need for economic and financial support and
concessions in other areas of trade regulation are often considered an
37
38
39
40
See, eg, Sophia Su, Han Donker and Saif Zahir, Merger Control Regulations in Emerging
Economies: The Case of China (2009) 4 International Journal of Chinese Culture and
Management 370 and Susan Beth Farmer, The Evolution of Chinese Merger Notification
Guidelines: A Work in Progress Integrating Global Consensus and Domestic Imperatives
(Pennsylvania State University, Dickinson School of Law, 29 May 2009).
China did not formally investigate the merger following the lapse of the takeover bid in
November 2008 the wake of the Global Financial Crisis: see BHP Billiton, BHP Billiton Offer
for Rio Tinto Lapses (Press Release 41/08, 27 November 2008).
See, eg, Rio Tinto, BHP-Billiton Finally Sign off on Pilbara Deal, The Australian, 7
December 2009 and Zhan Hao, Will Rio Tinto and BHP Billiton Make It This Time? A Few
Comments from the Perspective of Antitrust Law (8 February 2010) China Law Vision
<http://www.chinalawvision.com/2010/02/articles/competitionantitrust-law-of-th/will-rio-tintoand-bhp-billiton-make-it-this-time-a-few-comments-from-the-perspective-of-antitrust-law/> at
1 March 2010.
The two major merger-specific studies in the last decade have been conducted by Wilson
and Giannino: Wilson, above n 28 and Giannino, above n 29. There have also been a
number of more focussed national-based studies, such as ICPAC Final Report, above n 3
and Davey and Barker, above n 3. Most of the major studies in this area were conducted
prior to the emergence of the International Competition Network which has had a profound
impact on the level of convergence in both substantial and procedural merger law and
regulation: see further chapter 7, below.
Chapter1|Page14
important element of any broad multilateral agreement.41 This has led

some to recommend WTO involvement,42 based in part on the ability to
negotiate trade-offs in other policy areas.43 A focus on developed
regimes will provide greater scope for a substantive merger-focussed
agreement in the short term.
This does not mean, however, that any OECD-specific
recommendations cannot have an influence beyond its membership.
OECD recommendations can and frequently do influence the
development of wider agreement on competition issues and may also
provide a benchmark to which newer regimes might aspire.
The focus is transnational mergers

In most cases jurisdictions make no distinction between domestic and
transnational mergers when applying substantive law or procedural
obligations. There are, however, issues of comity, cooperation and
convergence of law and practice that arise only when mergers are
transnational in effect. Consequently, while consideration of
transnational mergers will necessarily involve consideration of the
regulation of domestic mergers, the focus of this study is the regulatory
burden associated with transnational mergers which have the potential
to invite multiple regulatory responses and increase both cost and
business uncertainty.
The focus is on competition policy

This study is limited to merger laws which form part of the competition
policy of each of the jurisdictions considered. Except where directly
relevant to competition policy, it does not consider other legal and
41
42
43
See, eg, Taylor, above n 28, 416.

See, eg, ibid. See also Wilson, above n 28.
See, eg, Giannino, above n 29, 276. Giannino suggests that this would be desirable but
concedes it is impractical at this time.
Chapter1|Page15
regulatory restrictions that merging parties may confront, such as

corporations laws, foreign policy regulations or industrial laws, which
raise different policy issues.
The focus is on substantive merger tests and procedural requirements

There is a considerable amount of economic research relating to the
methodology for merger analysis pursuant to substantive laws and,
increasingly, on the appropriate form of merger remedies.44 An in depth
study of the economic principles driving merger analysis and remedial
construction is beyond the scope of this study. These issues will,
however, be discussed to the extent that they directly impact on the
costs of transnational merger regulation.
For example, the extent of
convergence or divergence in the approach to merger analysis among

OECD states will have an impact on the viability of future substantive
agreement on merger laws and will also affect the nature of information
that may be appropriately demanded as part of pre-merger notification
obligations.
1.3 Terminology
There are a number of key terms used throughout this study which require clear
definition.
1.3.1 Globalization
Globalization is a term which has no clear meaning. It means different things to
different people and in different contexts. In this respect it has been described as
44
See, eg, Stephen Davies and Bruce Lyons, Mergers and Merger Remedies in the EU:
Assessing the Consequences for Competition (2007) and William Blumenthal, 'Reconciling
the Debate over Merger Remedies: A Discussant's Proposed Decision Rule' (2001) 69
George Washington Law Review 978.
Chapter1|Page16
an elusive and contested concept.45 For purposes of this study, it is defined as

the expansion of markets beyond purely national boundaries.46 This process of
expansion, facilitated by the growing reduction of public trading barriers, aided by
the WTO, has important implications for competition policy. Mergers are now
more likely to have economic and social consequences that extend beyond
national borders. Conversely, mergers are less likely to have a significant impact
on competition domestically, because of the increased potential (in many
industries) for import competition. This has implications not only for the way in
which individual mergers should be assessed, but also for national merger policy.
The globalization of markets will, therefore, be an important consideration in
determining an appropriate policy framework for transnational merger review.
1.3.2 Competition law
The scope and nature of competition laws vary to a degree in name and
substance between jurisdictions. Competition law is the term adopted to
describe those laws directed at regulating activity which restricts free trade
between firms, either directly by agreement (such as in the case of cartels), or
indirectly by the acquisition of market power. This encompasses laws referred to
in some jurisdictions as antitrust, restrictive trade practices, combinations,
laws of monopolies or restraint of trade laws.
45
46
Hans Lfgren and Prakash Sarangi, Introduction: Dynamics and Dilemmas of Globalisation
in Hans Lfgren and Prakash Sarangi (eds), The Politics and Culture of Globalisation: India
and Australia (2009) 1.
This expansion is demonstrated by the increasing volume of mergers having transnational
implications reported to competition agencies: see, eg, ICPAC Final Report, above n 3, 45.
Chapter1|Page17
1.3.3 Mergers and transnational mergers

Horizontal Mergers
A merger, referred to in some jurisdictions as a concentration,47 is defined as the
voluntary or involuntary integration of two or more entities through share48 and/or
asset49 acquisition.50 It will not include joint venture activity that does not also
involve this share or asset acquisition. Competition law focuses attention
predominantly on horizontal mergers because they have the greatest potential to
adversely affect competition by directly eliminating one or more competitors;
however, in appropriate circumstances, competition policy also regulates vertical
and conglomerate mergers.51 The focus of this study, particularly that relating to
substantive analysis, will be on horizontal mergers, which continue to form the
bulk of transnational merger activity, but many of the conclusions reached,
particularly those relating to procedure, can be equally applied to vertical and
conglomerate mergers.
Transnational mergers
Transnational mergers refer to mergers which are subject to review in multiple
jurisdictions.52 This might be because parties have one or more places of
47
48
49
50
51
52
For example, the European Union: Council Regulation (EC) No 139/2004 of 20 January
2004 on the Control of Concentrations Between Undertakings [2004] OJ L 24, Article 3.
See further ICN, 'Defining Merger Transactions for Purposes of Merger Review' (Merger
Working Group, 2007) 2-4.
See further ibid, 4-5.
See further ibid, 1.
See, eg, Department of Justice, Non-Horizontal Merger Guidelines (14 June 1984), para 4,
ACCC, Merger Guidelines (November 2008) para 5.21, ICN, Merger Guideline Workbook
(Merger Working Group, April 2006) para 3.2, Dimitri Giotakos, 'GE/Honeywell: A Theoretic
Bundle Assessing Conglomerate Mergers Across the Atlantic' (2002) 23 University of
Pennsylvania Journal of International Economic Law 469, OECD, Portfolio Effects in
Conglomerate Mergers (Best Practice Roundtable on Competition Policy,
DAFFE/COMP(2002)5, 24 January 2004) and Lisa M Renzi, 'The GE/Honeywell Merger:
Catalyst in the Transnational Conglomerate Merger Debate' (2002) 37 New England Law
Review 109.
This is consistent with the definition in the OECD Council, Recommendation of the Council
Concerning Merger Review, 23 March 2005, C(2005)34/final, which defines a transnational
Chapter1|Page18
business in different nations or where the merger has the potential to impact on
competition in multiple jurisdictions. Mergers having this effect are also
sometimes referred to as multi-jurisdictional mergers or, perhaps inaccurately,
as global mergers.53 The term multi-jurisdictional review will be adopted to
refer to the situation in which more than one country conducts a competition
review of a single merger.
1.3.4 Regulation
Traditionally the term regulation has been used in reference to industry-specific
laws and rules and has involved direct interference in price, product characteristic
and related matters. At its broadest it has been defined as limits imposed on the
behaviour of economic actors, contained in rules and standards.54
Competition law, including merger law, focuses on the maintenance of a broadly
competitive environment rather than specific market characteristics.55 For
purposes of this study, regulation is defined to include the administrative and
53
54
55
merger as a merger that is subject to review under the merger laws of more than one
jurisdiction. This definition is more expansive than the one adopted by the International
Competition Policy Advisory Committee, which required more than pure effect transcending
national borders before classifying a transaction as international: ICPAC Final Report, above
n 3, 46. See also Giannino, above n 29, 240, who suggests that a proposed international
framework for trasnantional mergers should not apply where the merger affects only two
nations and those nations have concluded a bilateral competition agreement that
guarantees the same standard levels (or higher) of an international framework.
It is inaccurate in some cases because it implies an impact which extends to all parts of the
globe. In most cases even mega-mergers, while having an impact in many countries, will
not be truly global in scope.
Philipp Pattberg (2006) 'The Transformation of Global Business Regulation' (Global
Governance Working Paper Series No 18, Amsterdam, The Global Governance Project,
2006) 1. See also Braithwaite and Drahos, who define regulation broadly as the
globalization of the norms, standards, principles and rules that govern commerce and the
globalization of the enforcement: John Braithwaite and Peter Drahos, Global Business
Regulation (2000) 10.
See, eg, Michael D Whinston, Lectures on Antitrust Economics (2006).
Chapter1|Page19
judicial mechanisms adopted to detect, deter and prevent mergers which

contravene or potentially contravene56 the substantive merger laws.
1.3.5 Extraterritoriality
The extraterritorial application of competition laws generally, and merger laws
specifically, plays a key part in regulating transnational mergers by providing a
mechanism by which countries can apply their merger regulations to activity
occurring outside their national borders. It therefore requires careful definition.
For purposes of this study, extraterritoriality is defined as any legal power claimed
by a country over persons located, or activity occurring, outside national territorial
borders, whether or not the basis for such jurisdiction is recognized in
international law.
1.3.6 Comity and positive comity
Comity is defined broadly as the consideration given by the regulators and
judiciary to the laws and interests of other nations when applying their domestic
regulations. This will be relevant whenever a merging firm is domiciled in a
foreign jurisdiction or where a domestic merger has social or economic
consequences outside the regulating jurisdiction.
Positive comity is a more recently developed concept in the context of
international competition law enforcement and is narrower in scope. It
encompasses any case in which one country requests that another investigate
conduct within its jurisdiction which is harming the interests of another; this may
occur in conjunction with the requesting countrys own investigation or
independently. For example, Australia might ask that the US authorities
investigate a merger between two US companies which Australia believes is anticompetitive and may harm its economic interests.
56
This includes mergers which do not contravene substantive laws but are nonetheless
subject to PMN requirements.
Chapter1|Page20
Both concepts have gained momentum in the context of competition law in the
last decade and, although the special nature of merger review means that
positive comity has played a limited role to date, comity is likely to continue to
play an important role in future international developments in this field and will be
examined in detail in chapter six.
1.4 Structure
In chapter two an examination of the framework against which the efficiency, or
otherwise, of the current regulation of transnational mergers will be examined.
An assessment of the possible policy objectives of merger regulation will be
made and a conclusion reached as to the most desirable policy objective to be
achieved through merger regulation, both for domestic and transnational
mergers. This will provide a reference by which substantive merger laws and their
procedural regulation may be assessed.
Part II examines current domestic merger policies and processes of OECD
countries and the EU. Chapter three begins with an examination of existing
approaches to substantive merger law and draws conclusions about the most
appropriate substantive law for transnational mergers. Chapter four examines
the current procedural regulation applied to transnational mergers, with a focus
on pre-merger notification processes. In chapter five an examination is made of
the nature and validity of extraterritorial jurisdictional claims in relation to merger
laws and procedures.
Following this assessment of existing national approaches, Part III examines the
role of transnational comity and cooperation in influencing the domestic
regulation of transnational mergers.
Based on the conclusions drawn from parts II and III, Part IV analyses the current
cost of transnational merger regulation.
Part V then analysis the possibilities for increased efficiency in the regulation of
transnational mergers, including previous and current attempts and cooperation
Chapter1|Page21
and international agreement, before making a recommendation for the future

direction of transnational merger review.
Chapter1|Page22
Chapter 2
Framework
2.1 Introduction
In this chapter I develop a framework for the regulation of transnational mergers
as part of a broader competition law policy. This requires an assessment of the
appropriate policy direction for competition law generally and merger law in
particular, as well as a formulation of an appropriate regulatory approach to give
effect to such policy. A framework will then be constructed for the development
of substantive law, determining which mergers should and should not be
permitted, as well as for the form of procedural regulation designed to implement
them.
Development of such a framework and policy objective for merger regulation is
important for rationalizing interference in an otherwise free market economy, for
transparency and predictability of process and, of increasing importance in
todays global market environment, for facilitating greater levels of global
cooperation and convergence. It remains, however, an exceedingly difficult
task.1 Policy formulation for merger regulation generates heated debate at the
national level even before the added complexities of transnational mergers are
added to the fray. Even in jurisdictions where substantial convergence has been
reached over appropriate policy objectives, there remains controversy over
whether their implementation, in substantive law and enforcement, gives effect to
those objectives or itself should be modified to best reflect articulated goals.
See, eg, Christine A Varney, Coordinated Remedies: Convergence, Cooperation, and the
Role of Transparency (Speech delivered to the Institute of Competition Law, New Frontiers
of Antitrust Conference, Paris, 15 February 2010), 2-3, noting that even in relation to
cooperation and coordination with respect to remedies, counsels of perfection are easier to
aspire to than they are to achieve and differences in approaches, analytical tools, and
antitrust philosophies among the various agencies create problems of both translation
and interpretation that can be hard to overcome.
Chapter2|Page23
In addition, existing national merger laws and policy rarely give much, if any,
consideration to the emergence of global markets or the interests of other nations
whose economies may be affected by a proposed merger.2 This is largely a
product of the history of merger regulation, developing in times when the current
level of globalization and expansion of markets was unthinkable.3 Its continued
promulgation today reflects, at least in part, a nationalist protectionism of
domestic market economies. There are, of course, good reasons why states
might wish to retain a domestic policy outlook and this will make incorporation of
global considerations more difficult. The prevailing focus on national regulatory
theory to the exclusion of the broader global market environment is, however, a
leading cause of the apparent excesses in the regulation of even modest
transnational mergers. To be effective into the future, a formulation of
appropriate policy objectives for transnational merger regulation must take
account of these considerations. Consequently, the development of a policy
formulation in this chapter will be undertaken in both a national and international
context. The difficulties associated with incorporating more international
objectives into the regulation of transnational mergers will be discussed in Part V.
In this chapter no analysis is made of whether existing laws are appropriately
designed to facilitate the desired objective (although to some extent the reverse
analysis will be undertaken, with some discussion of substantive law assisting to
determine both existing and desirable policy objectives). The substantive
analysis of existing laws will be conducted in Part II. The current chapter
presents a normative analysis of the approach that ought to be taken to merger
regulation, domestically and globally.
Although considerations of comity and cooperation in relation to review and remedies may
occur for transnational mergers, it is rare for these consideration to form part of any formal
substantive merger assessment.
Modern regimes have tended to formulate their policies based on older regimes with the
result that many of these outdated concepts have been inherited.
Chapter2|Page24
2.2 The economics of mergers

An understanding of the economic impact of mergers is central to developing a
policy framework for mergers. While competition policy may facilitate goals
beyond the pure economic, it is principally the economic consequences of anticompetitive conduct that provided the genesis for the development of competition
laws and it remains a central consideration in competition policy and enforcement
today. Although it is the possibility of adverse economic consequences that
catalyses competition policy-makers, it is clear that all mergers which involve the
economic integration of previously separate entities will also have the potential
for efficiency gains.4 It is this paradoxical effect the possibility for both positive
and negative economic consequences that makes for interesting theoretical and
substantive analysis. It is, therefore, important to understand the economic
consequences mergers may produce before formulating policy objectives.
2.2.1 Competition is better for the economy than monopoly
Competition policy is predicated on the notion that a competitive business
environment is better economically and socially than one which is
uncompetitive; in particular, it is more desirable than a monopolistic one. Most
markets are neither what economists would define as perfectly competitive or
monopolistic, but these extremes provide a useful foundation for examining this
premise for understanding why competition policy is formulated to promote the
former in preference to the latter.
A perfectly competitive environment is one in which no supplier or consumer has
market power sufficient to enable it to influence prices. This necessitates ease of
entry and exit (facilitating a market response to any variation in supply or
demand), products that are homogenous, perfect information between market
participants (at least insofar as the information relates to the produce or service
Einer Elhauge and Damien Geradin, Global Competition Law and Economics (2007) 800.
Chapter2|Page25
involved) and firms acting freely and independently. In such an environment

competition between participants will drive prices down to the cost of their
provision (incorporating normal profits).5 Such a market also operates at optimal
efficiency by allocating resources where most desired by society. Competing
firms also pressure each other to improve and innovate in order to win custom.6
Where there is perfect competition profits are maximized where price equals
marginal cost;7 that is, the cost of producing one extra unit of the good or service
being supplied.
As any increase in price (normally) reduces demand (and, conversely, supply
increases with price) a competitive market produces an economic equilibrium
where the supply and demand curves intersect; this represents the optimal level
of production and is illustrated in Figure 2.1. In a perfectly competitive
environment both consumer surplus (the gain experienced by consumers willing
to pay more than the equilibrium price) and producer surplus (the gain to
producers willing to supply at less than the equilibrium price) are maximized.
5
6
7
Ibid 1.
Michael Porter, The Competitive Advantage of Nations (1990) 117.
See, eg, Herbert Hovenkamp, Economics and Federal Antitrust Law (1985) 10. See
generally Steiner, Mark, Economics in Antitrust Policy: Freedom to Contract v Freedom to
Compete (D Phil Thesis, University of Zurich, 2007) 30-31.
Chapter2|Page26
FIGURE 2.1: SUPPLY AND DEMAND
In reality, no market exhibits all these criteria; information is invariably imperfect,

barriers to entry (incorporating exit costs) are often considerable and products
are generally differentiated in some way. Nevertheless, markets in which there
are several competitors acting freely and independently will normally produce
results similar to that expected of a perfectly competitive market so that in most
instances competition will have the effect of driving down prices, increasing
consumer choice and providing an incentive for research, development and
quality control.
A monopolistic market, on the other hand, exhibits none of these characteristics.
A monopolist (or monopsonist) is free to set the price at which they are prepared
to deal; they alone may manipulate supply and demand and thereby charge more
by producing less. A monopolist has a clear incentive to reduce production and
raise prices with the result that their own producer surplus is maximized at the
Chapter2|Page27
expense of some of the consumer surplus that would exist if the level of
production was optimal.8 Of greater concern in a pure economic sense, this sort
of monopoly pricing produces a significant deadweight loss; that is consumers
willing to pay the equilibrium price for a product are forced to go without or
purchase less desired alternatives.9 Society loses because scarce resources are
re-allocated to produce less-desired end-products. This is illustrated by Figure
2.2.
FIGURE 2.2: MONOPOLY PRODUCTION
This creates a distributional issue; see pp 48 and 51-53, below. In purely economic terms
this re-distribution raises no concerns. The US estimates that merger enforcement has
saved consumers US$2.5 billion in the five year period from 2004-2008: Federal Trade
Commission, Performance and Accountability Report: Fiscal Year 2008 (2008) 38.
Compare Philip Nelson and Su Sun, 'Consumer Savings from Merger Enforcement: A
Review of the Antitrust Agencies' Estimates' (2001) 69 Antitrust Law Journal 921
Elhauge and Geradin, above n 4, 2.
Chapter2|Page28
In addition, lack of competitive pressure means that monopolists have reduced

incentive to be efficient or invest in innovation.10
As with perfect competition, true monopolies are rare, although situations
approaching monopoly, in which one firm substantially dominates a market and
there are high barriers to new entry or expansion of capacity by existing entrants,
do occur and can produce similar undesirable results.11
A cursory examination of the social and economic consequences of two extremes
is sufficient to justify societys general preference for competitive over
monopolistic markets, at least where the monopolistic structure is obtained in an
anti-competitive or unfair way.12 On the other hand, it is less clear that it justifies
interference where a dominant market position is brought about through ingenuity
and superior efficiency.13 Ingenuity and efficiency are desirable byproducts of a
competitive market dynamic and should, therefore, be encouraged rather than
penalised. Competition law is, and should be, concerned with the unfair or anticompetitive acquisition or maintenance of market power, either individually or
through collusive activity. This includes mergers, which are not the product of
evolving internal efficiencies but rather the product of agreement and therefore
should raise concerns where they have the potential to produce anti-competitive
consequences. Mergers may produce such results either through an increased
ability to facilitate market collusion14 or through the acquisition of individual firm
dominance, although the primary focus has tended to be directed toward the
latter.
10
11
12
13
14
This is subject to the proviso that barriers to entry are sufficiently high so that short to
medium term entry of a new competitor is unlikely.
Elhauge and Geradin, above n 4, 2.
See Alan A Fisher and Robert H Lande, 'Efficiency Considerations in merger Enforcement'
(1983) 71 California Law Review 1582 from 1624.
Elhauge and Geradin, above n 4, 2: If a firm has acquired ... efficiency advantage through
productive investment in innovation, physical capital or organisation, then the additional
profits it is able to earn might reasonably be thought to provide the right reward for that
investment, especially since any price premium it charges cannot exceed its efficiency over
other prevailing market options.
See, eg, Elhauge and Geradin, above n 4, 3.
Chapter2|Page29
2.2.2 Increased market dominance facilitated by merger

(unilateral effects)
Horizontal mergers, by definition, reduce the number of competitors in a market.
The impact this has on competition will depend upon the existing market
structure. In a market with numerous competitors, readily able to meet consumer
demand, the loss of a single supplier will barely register on the competitive radar.
It may also be that one of the merging companies was preparing to exit the
market so that the number of post-merger competitors will be the same as it
would otherwise have been after that firm exited.15 There may already exist a
dominant firm, so that the merging of two smaller firms, while reducing the
number of competitors, nevertheless enhances competition by increasing the
ability and capacity of the existing participants to compete with their more
powerful rival. Mergers under these conditions are of little or no concern to
competition regulators because of their limited potential to bring about anticompetitive consequences. Big, then, is not always bad, especially when not
directly linked to the possibility of abuse practices but rather to a higher ability to
engage in fierce competition, which in general tends to benefit consumers.16
However, where a market is already concentrated, or the merger is to occur
between two already substantial market participants, leading to a dominant postmerger firm, competition regulators are justified in paying closer attention to the
15
16
This is often referred to as the failing firm scenario and is recognised as a relevant
consideration in many jurisdictions, whether as a factor in the substantive test or as a
defence, and has re-emerged as a relevant competition issue in the wake of the 2008 Global
Financial Crisis. A study of the appropriate scope of failing firm considerations is beyond
the scope of this study. For more see Richard Elliott and Jim Dinning, Failing Firm Analysis
in Canadian Merger Review (Paper Presented at the Canadian Bar Association,
Competition Law 2009 Spring Forum, Toronto, 12 May 2009), Robin Mason and Helen
Weeds, The Failing Firm Defence: Merger Policy and Entry (Discussion Paper 3664,
Centre for Economic Policy Research, 9 October 2002) and OECD, Failing Firm Defence
(Best Practice Roundtable on Competition Policy, OCDE/GD(96)23, 1996).
Jonathan Green and and Gianandrea Staffiero, 'Economics of Merger Control' in The 2007
Handbook of Competition Economics: Global Competition Review Special Report (2007) 8,
9.
Chapter2|Page30
possible long-term anti-competitive consequences it may produce. At its most

extreme, a proposed merger between two duopolists, bringing about a monopoly,
will produce all of those adverse consequences associated with monopoly. Short
of monopoly, the existence of a dominant firm may also produce monopoly-like
consequences, especially where the capacity of smaller firms is not sufficient to
contain their activities. Thus, any merger which gives the resulting firm the ability
to profitably increase prices should be investigated.17
A number of factors might lead a firm to attain market power and no market
conditions (like concentration) can be presumed to do so in isolation.18 Other
market factors, in particular the nature of the product19 and the level of barriers to
entry, need to be considered.20 Nevertheless, the level of market share or
concentration is often usefully adopted as a screen to provide regulators with an
indicative guide of mergers having the potential to lead to individual market
power.21 While high market share does not necessarily give a firm market
17
18
19
20
21
See Nils von Hinten-Reed, Susan Henley Manning and James C Miller III, 'The Use of
Economics in Merger Control Analysis' in Global Counsel Competition Law Handbook
2002/03 (2002) 39, 40. See also ICN, Merger Guideline Workbook (Merger Working
Group, April 2006) 39-44. Although increased prices are not the only negative biproduct of
increased market power, a likely increase in price is a useful indicator of the potential for
other forms of consumer harm.
Lawrence A Sullivan, The New Merger Guidelines: An Afterword in Eleanor M Fox and
James T Halverson (eds), Antitrust Policy in Transition: The Convergence of Law and
Economics (1984) 319, 324.
For example, homogenous products facilitate collusion more than differentiated (through
brand loyalty, quality or otherwise) products.
Von Hinten-Reed, Manning and Miller, above n 17, 39. See also King, The 2008 Merger
Guidelines, above n 19, 269-270.
See, eg, ACCC, Merger Guidelines (November 2008) paras 2.9 and para 7.14; Department
of Justice and Federal Trade Commission, Horizontal Merger Guidelines (1992, revised 8
April 1997) para 1.5; Competition Commission (UK), CC2 Merger References: Competition
Commission Guidelines (June 2003) para 3.4; European Commission, Guidelines on the
Assessment of Horizontal Mergers under the Council Regulation on the Control of
Concentrations between Undertakings of 5 February 2004 [2004] OJ C 31, 5-18, section III
and Competition Authority (Ireland), Notice in Respect of Guidelines for Merger Analysis
(Decision No N/02/004, 16 December 2002) para 3.9. See also King, above n 20, 263-270.
Chapter2|Page31
dominance, in most cases it is possible to rule out mergers resulting in low or

modest market share from the possibility of having such an adverse affect.22
Beyond market share, the nature of the market, ease of entry or increased
capacity of existing firms in response to unilateral conduct, will be relevant
considerations. These do not provide an exhaustive list; they are analytical
exercises, the detailed economics of which fall beyond the scope of this study.23
It is clear, however, that mergers have the potential, in appropriate
circumstances, to enhance market power and thereby produce anti-competitive
economic effects.
2.2.3 Coordinated effects
The second possible anti-competitive consequence of concern to merger
regulators is whether or not the proposed merger will facilitate coordinated
market behaviour that is, whether it will result in an increased likelihood of postmerger collusion.24 Coordinated behaviour is disliked because of its potential to
produce similar consequences to those produced by single firm market power,
and is often referred to as collective dominance or power.
22
23
24
This does not mean that it is never possible for a merger leading to a modest market share
to produce anti-competitive effects. For example, a firm might hold intellectual property that
attracts high levels of brand loyalty and, at least where combined with the capacity for
expansion, may produce anti-competitive effects.
A detailed assessment of the analytical approach that should be taken to determine if a
merger will have either of these effects (which is largely a product of economic theory) is
beyond the scope of this thesis, which focuses on the philosophical basis for enacting laws
restricting anti-competitive mergers and the form that regulation should take so as to
minimize loss of time and resources. Analytical issues will, however, be referred to
generally where relevant in the context of notification requirements. For a discussion of the
detailed economics associated with merger analysis, see generally Von Hinten-Reed,
Manning and Miller, above n 17, 39, 40-41 and ICN, 'Recommended Practices for Merger
Analysis' (Merger Working Group 2008, amended 2009). See also King, above n 20.
See further William E Kovacic, Robert C Marshall, Leslie M Marx and Steven P
Schulenberg, 'Quantitative Analysis of Coordinated Effects' (2009) 76 Antitrust Law Journal
397. See generally Janusz A Ordover, Coordinated Effects in ABA Section of Antitrust
Law, Issues in Competition Law and Policy (2008) 1359 and also ICN, Merger Guidelines
Workbook, above n 17, 45-52.
Chapter2|Page32
The potential for any particular merger to have a significant impact on the
likelihood of coordinated conduct is impossible to predict with mathematical
certainty, but conventional wisdom suggests the more competition in a market
(often, but not always,25 facilitated by more competitors) the less likely the
prospect of coordinated conduct. Conversely, the fewer the number of market
participants, the more likely the merger will facilitate such conduct. Consequently
mergers which give rise to oligopolies are more likely to be thoroughly scrutinized
by regulators than those that have little impact on the competitive structure of the
market.
2.2.4 Efficiency
Merger proponents invariably seek to justify their merger on the grounds that it
will generate efficiency gains not otherwise possible26 and that those increases in
efficiency should be treated favourably. In particular, they claim that the merging
of two previously separate entities will produce economies of scale and scope,27
increase the ability of the merged firm to engage in costly R&D activity leading to
innovation28 and generate cost-savings which they may pass on to customers
and/or shareholders.29
Economic efficiency is the measure of the level of wastage of societys resources.
Conduct is efficient if it minimizes waste and inefficient if it increases waste. A
market (as opposed to an individual firm) is economically efficient if resources are
allocated within the market where they are most desired by the public; waste
25
26
27
28
29
For example, if there is one dominant firm and 10 small firms, competition might be
enhanced by reducing the number of competitors and merging two or more of the smaller
firms thereby increasing their capacity to compete with the larger firm.
That is, they could not have been achieved in a less anti-competitive manner.
See, eg, Green and Staffiero, above n 16, 9.
Ibid. Conversely, it may reduce the incentive to do so if the merged firm faces a significant
reduction of competitive pressures. The complexities of dynamic efficiency considerations,
such as innovation, are discussed below at 34 and 37-38, below.
See, eg, European Commission, Mergers Overview, European Commission, Competition
<http://ec.europa.eu/comm/competition/mergers/overview_en.html> at 21 September 2007.
Chapter2|Page33
includes allocating resources to goods or services which are less desired in

circumstances where they could be produced, economically, in a manner more
greatly desired, even if the resources used for their production are identical.30 As
a consequence, all else being equal, an efficient market should be preferred over
an inefficient one and activity (merger or otherwise) which enhances efficiency is
to be preferred over that which reduces efficiency.31
While different measures exist for determining whether a market is efficient, for
purposes of this study is not essential to reach a conclusion as to which method
is superior.32 Pareto efficiency is a widely adopted measure33 which provides that
a market is efficient where no individual can be made better off without making
someone else worse off. Free and competitive markets are generally considered
to produce such efficiency or, at least, to minimize inefficiencies.34
There are three different types of economic efficiency that are relevant to
mergers. The first two classes of efficiency are productive and allocative
30
31
32
33
34
See, eg, Kenneth Heyer, 'Welfare Standards and Merger Analysis: Why Not The Best'
(Discussion Paper No EAG 06-08, Department of Justice Economic Analysis Group, March
2006) 5.
While in theory efficiency gains should be treated positively, proving such gains is very
difficult in practice: see, eg, Fisher and Lande, above n 12, 1694.
A discussion of the superior measure of efficiencies is beyond the scope of this study.
However, the conclusions drawn in this study are not affected by the choice of methodology
to be applied in assessing merger-generated efficiencies.
Robert H Lande, 'Wealth Transfers as the Original and Primary Concern of Antitrust: The
Efficiency Interpretation Challenged' (1982) 34 Hastings Law Journal 65 at 73 observes that
Pareto optimality is almost universally considered the appropriate welfare criterion by
modern economists. See further Morton I Kamien and Nancy L Schwartz, Market Structure
and Innovation: A Survey (1975) 13 Journal of Economic Literature 1, 1, Heyer, above n 30
and Joshua S Gans, Reconsidering the Public Benefit Test in Merger Analysis: The Role of
Pass Through (2006) 34 Australian Business Law Review 28. Note, however, that this
measure has also been criticised as failing to consider, amongst other things, effects of
wealth distribution: see Chris Noonan, The Emerging Principles of International Competition
Law (2008) 96.
See Michael A Utton, International Competition Policy: Maintaining Open Markets in the
Global Economy (2006) 15-16. Utton further observes (at 16) that, contrary to claims of the
Chicago School, there is high level of agreement that an active and comprehensive
competition policy is required to ensure that markets maintain an efficient performance.
Chapter2|Page34
efficiency, which are static forms of efficiency,35 in that they occur only once for
each relevant transaction; for example, efficiencies generated from mergergenerated economies of scale.36 The third class of merger-related efficiency is
dynamic efficiency. As its name suggests, dynamic efficiencies are synergies
which improve the performance of firms on a continuing basis.37 Traditionally,
competition law, where it has considered efficiencies at all, has focussed on static
efficiencies,38 principally because they are less difficult to quantify than dynamic
efficiencies.39 More recently, however, the importance of dynamic efficiencies to
merger assessment has been recognised.
Mergers (at least those giving rise to market power) are often said to generate
increased productive efficiency while potentially reducing allocative efficiency.
The potential for mergers to simultaneously increase and decrease efficiency40
makes an overall welfare analysis, even where based only on static efficiencies,
extremely complex.41
Allocative efficiency refers to the placement of resources in society. A merger,
especially if it leads to market dominance or monopoly, may provide the resulting
firm with sufficient power to enable it to manipulate demand by reducing output
and thereby allow it to maintain cost above a competitive level. Monopolists
generally produce less than they would under competitive conditions. As a
consequence allocative efficiency is reduced (resources are used to increase
35
36
37
38
39
40
41
Richard Gilbert and Steven Sunshine, 'Incorporating Dynamic Efficiency Concerns in Merger
Analysis: The Use of Innovation Markets' (1995) 63 Antitrust Law Journal 569, 601.
OECD, Dynamic Efficiencies in Merger Analysis (Policy Roundtable 2007,
DAF/COMP(2007)41, 5 May 2008) 9.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 9. See also Steiner, above n
7, 40-42.
See Gilbert and Sunshine, above n 35, 601.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 1: incorporating dynamic
efficiencies is difficult, because they occur over time and do not lend themselves to the
snapshot analysis that is used to assess static efficiencies.
Utton, International Competition Policy, above n 34, 15.
Lande, Wealth Transfers, above n 33, 79. See also Elhauge and Geradin, above n 4, 3.
Chapter2|Page35
production of less-valued substitutes) and society suffers a deadweight loss;42

societys total wealth is reduced and resources misallocated43 so that some
mutually advantageous transactions do not take place.44
Assume, for example, that companies A and B produce sprockets. Company A is
dominant, with 80% of the market share. Company B holds the remaining 20%
share and manufactures inferior quality sprockets, the production of which
consumes more raw materials than those produced by Company A. Consumers
prefer Company As sprockets and 80% of consumers are prepared to pay a
competitive price for them, even where that exceeds the price of Company Bs
sprockets. Company A, however, having secured a position of market
dominance, chooses to take advantage of that power and charges higher prices
by producing less sprockets. It loses those customers who were willing to pay
the competitive price but not the supra-competitive price. That loss is, however,
offset by the increased profits extracted from the remaining purchasers (this is
demonstrated by Figure 2.2). The customers no longer willing or able to purchase
sprockets from Company A now seek an alternative; in this case the only
alternative available are those sprockets produced by Company B. Company B
will (assuming it has capacity for expansion) produce more sprockets to meet the
new demand. These will, however, be of a lesser quality than Company As and
consume more resources to produce. Clearly, in this case, societys resources
have not been put to their most valuable use and the market would, as a result,
be classified as inefficient. It is at least partly for this reason that monopolies are
almost universally condemned,45 as are those displaying comparable
characteristics.46
42
43
44
45
46
Lande, Wealth Transfers, above n 33, 75. See also Figure 2.2.
Lande, Wealth Transfers, above n 33, 72.
Green and Staffiero, above n 16, 8.
See, eg, Michael A Utton, The Economics of Regulating Industry (1986), 93.
See, eg, Lande, Wealth Transfers, above n 33, 73.
Chapter2|Page36
Mergers also impact upon productive efficiency.47 The focus of productive

efficiency is the individual firms use of resources in the most effective manner.48
If, for example, it is possible to produce a sprocket for 10c using sophisticated
equipment which minimizes the consumption of raw materials (including
electricity, water etc) but Manufacturer B persists in adopting older techniques
which use considerably more resources and, therefore, cost more to produce in
monetary terms (say 20c) and in resource consumption, then Manufacturer B
would be classified as acting inefficiently. While allocative efficiency can,
theoretically, always be improved,49 productive efficiency is more difficult to
assess.
When a merger produces economies of scale50 it should (other things being
equal) increase the ability51 of the merged firm to produce the same capacity at
less cost and may also facilitate improvements in quality through research and
development and similar investment.52 Total welfare should be enhanced by the
production of goods or services of higher quality and/or with reduced
consumption of resources.53 In this respect, Rule has observed that even
if an improvement in efficiency leaves price unchanged (or indeed results in a
price increase) and consumers in that particular market are not benefited,
consumers as a whole (that is consumers in all markets) benefit because they
47
48
49
50
51
52
53
For a detailed discussion of the nature and extent of efficiencies that might be generated
from mergers see Fisher and Lande, above n 12, from 1599.
Statement for the Hearing of the Antitrust Modernization Commission: Treatment of
Efficiencies in Merger Enforcement, Washington DC, 17 November 2005 (Charles F (Rick)
Rule, Consumer Welfare, Efficiencies, and Mergers) 4.
An economy of scale exists whenever the costs per unit of some input decrease as volume
increases: Hovenkamp, Economics and Federal Antitrust Law, above n 7, 25. See also
Butterworths, Business and Law Dictionary (2nd ed, 2002) 177 and Bryan A Garner (ed),
Blacks Law Dictionary (Deluxe 7th ed,1999) 531.
This section considers only the economics of mergers and therefore notes the increased
ability of mergers to enhance efficiencies without drawing a conclusion about whether those
efficiencies would be realised in practice.
See, pages 37-38, below.
Rule, above n 49, 3.
Chapter2|Page37
are able to consume incremental goods and services produced in other markets
from the freed-up resources.54
It is, however, possible that, despite the generation of economies of scale,

mergers may also reduce productive efficiency by creating organizational slack
and tolerating inefficiency and waste55 due to the lack of competitive discipline.56
The lack of competitive pressure may also reduce the incentive for a dominant
firm to engage in research and innovation, even though their capacity to do so
has increased.57 Another concern is that a dominant firm will inefficiently devote
resources toward the protection of their market power, including deterring
competition from existing competitors and warding off new entrants.58
In addition to productive and allocative merger-generated efficiencies (or
inefficiencies), a merger may impact on a firms dynamic efficiency, including
innovation through research and development. It is widely recognised that
innovation is a key determinant of economic growth,59 with some economists
claiming it is the single most important factor in the growth of real output in the
industrial world.60 There is general consensus that society, as a general rule, is
better off with greater investment in research and development.61 As a result,
the importance of assessing a mergers impact on dynamic efficiencies is being
54
55
56
57
58
59
60
61
Ibid 4. Rule argues that enforcement rules should proscribe only conduct that on balance
threatens overall efficiency.
See F M Scherer and David R Ross, Industrial Market Structure and Economic Performance
(2nd ed, 1980) 466 and Lande, Wealth Transfers, above n 33, fn 53.
Some economics believe that it is eminently plausible that inefficiencies resulting from
weak competitive pressures are at least as large as the welfare losses from [allocative
inefficiency]: Scherer and Ross, above n 55, 466. See also Lande, Wealth Transfers,
above n 33, fn 53.
Kamien and Schwartz, above n 33, cited in Lande, Wealth Transfers, above n 33, fn 55.
Utton, International Competition Policy, above n 34, 15-16.
Gilbert and Sunshine, above n 35, 569 referring to Robert M Solow, Technical Change and
the Aggregate Production Function (1957) 39 Review of Economics and Statistics 321. See
also OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 10.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 10, referring to the research of
Joseph Brodley.
Gilbert and Sunshine, above n 35, 574.
Chapter2|Page38
increasingly realised.62 In this respect, for example, the US Antitrust

Modernization Commission recently recommended that:
In industries in which innovation, intellectual property, and technological change
are central features antitrust enforcers should carefully consider market
dynamics in assessing competitive effects and should ensure proper attention to
economic and other characteristics of particular industries that may, depending
on the facts at issue, have an important bearing on a valid antitrust analysis. 63
The difficulty, however, is in assessing merger-related effects on dynamic

efficiencies,64 and in this respect economists differ in their views about whether
more competition leads to greater investment in research and development.65
On the one hand, a merger, particularly one leading to market power, may have
adverse consequences for the pace of innovation,66 because the merged firm
may have less incentive to innovate than a new entrant or a firm in a competitive
market.67 In this respect, some studies have found that rivalry has a direct role
in stimulating improvement and innovation68 and that domestic competition
draws attention to the industry, encourages investments that improve the
national environment, and creates diversity and incentives to speed the rate of
innovation.69 On the other hand, monopolists, or larger firms, have a superior
ability to absorb the costs and risks of innovative activity70 and may also have
62
63
64
65
66
67
68
69
70
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 10, noting that dynamic
efficiencies have a considerably greater potential to benefit consumers than static
efficiencies [so that] it would be desirable for dynamic efficiency considerations to feature
more frequently and more prominently in merger decisions.
Antitrust Modernization Commission, Report and Recommendations (April 2007) 9.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 10, noting that in the real world
no one has figured out a robust way to [assess dynamic efficiencies] and rather than
engage in speculation, courts have tended to avoid dynamic efficiency analysis .
Ibid.
Ibid 575, citing Kenneth J Arrow, Economic Welfare and the Allocation of Resources to
Invention in National Bureau of Economic Research (ed) The Rate and Direction of
Inventive Activity (1962).
Michael E Porter, The Competitive Advantage of Nations (1990), 143.
Ibid 144.
Chapter2|Page39
incentives to innovate in order to protect their monopoly position.71 Additional

complexities arise from the fact that there is no clear relationship between
expenditure and successful innovation,72 so that size and expenditure levels
might not be necessary or sufficient to produce useful innovations.73
Consequently, while promotion of dynamic efficiency is to be encouraged,
neither theory nor evidence suggests that substantial market power is so
generally conducive to technological progress that toleration or encouragement
would be desirable.74 It is also unlikely that any viable quantitative consideration
of dynamic efficiencies would alter the outcomes in a significant number of cases,
with the vast majority of mergers likely to produce dynamic efficiency benefits
unlikely to raise significant competition concerns.75
In addition, no effective method for the quantitative assessment of mergergenerated dynamic efficiency changes has yet been developed,76 with the result
that even where they are recognised as important, dynamic efficiencies rarely
play a substantial role in merger analysis.77 Nevertheless, while the link between
firm size and dynamic efficiencies remains the subject of controversy, the
benefits of dynamic efficiencies and the potential impact a merger may have on
promoting or stultifying innovation, particularly in markets impacted by rapid
technological advances,78 is increasingly being recognised by competition
authorities79 through a qualitative assessment of predicted efficiencies.80
71
72
73
74
75
76
77
78
79
Ibid 577.
Ibid 579.
Ibid, citing F M Scherer, Innovation and Growth: Schumpeterian Perspectives (1984) 239247. See also Steiner, above n 7, 41-42.
Phillip Areeda and Donald F Turner, Antitrust Law: An Analysis of Antitrust Principles and
Their Application (1980) 291, quoted in Gilbert and Sunshine, above n 35, 581.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 11.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 1, 10.
See generally OECD, Dynamic Efficiencies in Merger Analysis, above n 36.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 1, 10-11. See also Antitrust
Modernization Commission, above n 63, ii-iii, which recommended that substantial weight
Chapter2|Page40
2.2.5 Socio-economic impact of mergers

In addition to purely economic effects, mergers may have a number of socioeconomic consequences. In particular, mergers, particularly where they lead to
market dominance, will generally have the effect of transferring wealth from
consumers to producers. For economists, this transfer is viewed as neutral
because the total wealth of society (absent deadweight loss) remains stable;
distributional issues are (it is argued) a matter for social, not economic, policy.81
The wealth transfer does, however, have socio-economic consequences and
policy-makers must consider whether it is appropriate to factor these
consequences into competition law policy.
These social consequences may include:
Wealth distribution
Mergers which result in substantial market power are likely to produce a
transfer of wealth from consumers to producers.
Increased concentration of power

Transfer of wealth and market power to the merged entity may also give
the merged entity the ability to wield a level of political clout that conflicts
with normal democratic principles.
80
81
be given to evidence demonstrating a merger will achieve efficiencies, including innovationrelated efficiences.
OECD, Dynamic Efficiencies in Merger Analysis, above n 36, 11. Canadas merger
guidelines, for example, state that dynamic efficiencies will be examined on a quantitative
basis wherever possible, but that absent quantitative information, a qualitiative assessment
will be made: Competition Bureau, Efficiencies in Merger Review (2 March 2009), Part IV.
See further Heyer, above n 30, 19-20.
Chapter2|Page41
Loss of employment
To achieve economies of scale mergers will normally involve job losses.
Successful mergers which result in an increase in net production may
increase employment, but this is likely to occur less frequently.82
Loss of small business

Mergers may eliminate small business directly, as part of the merger, or
indirectly by providing the merged entity with sufficient market power to
force smaller enterprises out of business. Where small business
inefficiency makes them vulnerable, economists would consider the
closure (or absorption) of small business (absent monopoly
consequences) a positive one. There are, however, social implications
involved in reducing the level of small business participation, including
the reduction in consumer choice.
2.3 Policy objectives in the regulation of mergers

It is now possible to evaluate the various policy objectives that have been put
forward to justify governmental interference in merger activity. Very broadly,
merger regulation is directed toward ensuring that a competitive economic
environment is maintained in the relevant domestic economy.83 It is almost
universally accepted that this is a desirable social and economic goal, with the
result that mergers leading to the creation of monopoly conditions are, subject to
limited exceptions, condemned by all jurisdictions that have adopted merger
82
83
A merger leading to expansion of production or increased research and development

endeavours might also generate new employment opportunities. In addition, if one of the
merging parties was under threat of folding, a merger may save jobs that would otherwise
be lost.
Utton, Economics of Regulating Industry, above n 45, viii. For more information on the basis
for merger regulation in a number of jurisdictions see, eg, ICN, 'The Analytical Framework
for Merger Control: Final paper for ICN annual conference' (ICN Merger Working Group:
Analytical Framework Sub-group, 2002). Importantly, it is the competitive environment that
is to be protected and not the competitors within that market: see Henry C Thumann,
Multijurisdictional Regulation of Monopoly in the Global Market [2008] Wisconsin Law
Review 261, 265.
Chapter2|Page42
regimes.84 Conversely, mergers having little or no impact on the existing market

conditions are generally permitted. Beyond those extreme cases, however,
debate rages over the extent to which mergers should be the subject of
regulation and the degree to which factors such as efficiencies, socio-economic
effects or the facilitation of international competitiveness, should be considered
when determining whether to allow a merger to proceed.85 As a result some
regimes go further than others in preventing mergers which reduce competition
but fall short of creating a monopoly.
It has been observed that competition laws, in practice, prohibit conduct only
where it both harms competition and conflicts with the underlying policy goal.86
While the second rarely forms part of core legislation87 (which is normally
couched in terms of competitive impact alone), it is often relevant for authorities
in determining whether to investigate a merger and for regulators and courts in
determining whether or not a merger should be blocked. In many jurisdictions,
while it is unanimously agreed that competition laws were enacted to encourage
competition,88 fierce and frequently aggressive debate persists about the
reason why competition was sought to be encouraged and protected and
whether and why it should continue to receive protection.
84
85
86
87
88
See, for example, Utton, Economics of Regulating Industry, above n 45, 93: 'The inefficiency
that can result from monopoly have been thoroughly analysed and are well known'.
See generally Noonan, above n 33, 63-73. See also Robert H Bork, The Antitrust Paradox
(1978). The key reason for the contention is that horizontal mergers falling short of
monopoly 'may simultaneously increase market power, because of the larger market share
created and the elimination of one independent competitor, while at the same time promise
improved technical efficiency through re-organisation': Utton, Economics of Regulating
Industry, above n 45, 129. For more on substantive merger laws see: OECD, Substantive
Criteria Used for the Assessment of Mergers (2003), DAFFE/COMP(2003)5.
Joseph Farrell and Michael L Katz, 'The Economics of Welfare Standards in Antitrust' (UC
Berkeley, Competition Policy Center, Institute of Business and Economic Research, 20 July
2006) 7. This goal is normally an efficiency (or total surplus) approach or a consumer
surplus approach.
There are limited exceptions in some jurisdictions. For example, in Australia it is possible to
have a merger authorised on public interest grounds where the competition test does not
produce the intended goals: see further chapter 3 at 3.3.1, below.
Chapter2|Page43
The fiercest debate has centered around whether regulation should be

formulated to value economic efficiency over all other possible objectives or
whether the policy outlook should directly consider broader social objectives,
such as wealth distribution or the protection of small business.89
Determining existing and appropriate objectives is complicated by the fact that
the publicly articulated goal of merger policy (where one exists) almost always
stems from a political bargaining process90 that is subject to change with each
successive domestic government.91 In some jurisdictions the policy objectives
have become so obscured over time that it is difficult to discern what (if any)
policy is being employed in the formulation of merger laws and regulations. In
addition, the politically articulated goals do not always coincide with the practical
application of the policy by merger regulators and judicial bodies.
Different welfare goals are not necessarily expressed clearly through different
laws. For example, Country A and Country B may both have laws which prohibit
mergers resulting in a substantial lessening of competition, to the exclusion of all
other possible benefits or detriments resulting from the merger, expressed in
identical terms. Country A may, however, have an underlying policy goal of
promoting economic efficiency (ahead of any other possible socio-economic
considerations) and believe that a competitive market best achieves this goal,
while Country B may apply a (modern) consumer welfare objective.92 Both
89
90
91
92
Kathryn McMahon, 'Developing Countries and International Competition Law and Policy'
(Research Paper No 2009/11, Warwick School of Law, 2009) 17: The EU model is more
traditionally associated with rules ot safeguard the totality of the competitive process rather
than the US embrace of efficient outcomes and total welfare.
K J Cseres, 'The Controversies of the Consumer Welfare Standard' (2007) 3 Competition
Law Review 121, 126.
This has been seen most clearly in the speculation surrounding the direction competition law
in the United States will take following the shift from a Bush to an Obama Administration.
See, for example, D Daniel Sokol, 'Change and Continuity in International Antitrust Under an
Obama Administration' (January 2009) GCP: The Online Magazine for Global Competition
Policy <http://ssrn.com/abstract=1317922> at 18 February 2009 and Daniel A Crane,
Obamas Antitrust Agenda (2009) 32(3) Regulation 16.
See sections 2.3.2 and 2.3.3, below.
Chapter2|Page44
countries may believe that their respective objectives are best achieved by
maintaining a competitive market and therefore design their laws in precisely the
same way.
The existence of conflicting objectives that nevertheless produce identical
substantive laws is neither surprising nor paradoxical in the context of
competition law, given the capacity for competitive market economies to achieve
multiple economic and social goals.93 Thus, for example, where a merger leads
to monopoly, resulting monopolistic pricing practices will both reduce allocative
efficiency and transfer wealth from consumers to producers. In such a case, a
policy goal which subordinates all other welfare concerns to a test of whether or
not the merger is economically efficient, will prohibit the merger as readily as one
which incorporates broader distributional objectives.94 This will not, however,
always be the case and identification of particular objectives is important for
several reasons, not least of which is to generate popular support for their
existence. It is also important because many competition laws, while generally
prohibiting anti-competitive mergers, invariably build in exceptions to this general
rule for cases in which it is believed that the underlying policy objective might be
best achieved by permitting a merger, despite its anti-competitive potential.95
There is also little doubt that policy objectives are considered by regulators when
determining whether or not to investigate or challenge a merger. Consequently, it
is possible that in a significant number of cases the operation of the same
substantive law in two jurisdictions, which adopt different underlying policy
objectives, will produce different outcomes.96 It is, therefore, important to
articulate an appropriate policy objective upon which to found merger regulation.
93
94
95
96
See Antitrust Modernization Commission, above n 63, 26, fn 22.

Lande, Wealth Transfers, above n 33, 142. See also Utton, International Competition
Policy, above n 34, 100.
Thus, for example, some jurisdictions permit otherwise anti-competitive mergers which
increase the level of exports or international competitiveness: see, for example, Australia,
Trade Practices Act 1974 (Cth), s 95AZH(2).
Cseres, above n 90, 126.
Chapter2|Page45
Broadly speaking, the various policy objectives advocated for competition law
regulation, including merger regulation, have fallen into two categories; (1) those
that promote economic efficiency in isolation, giving effect to other social
objectives only incidentally and on the proviso that they do not fall into conflict
with the primary efficiency objective; and (2) those that promote a range of
economic and social objectives, with efficiency relevant, but subordinate, to those
broader objectives. Utton describes the circumstances in which these different
objectives might produce different outcomes:
a large horizontal merger which simultaneously increases market power and
prices while also reducing costs, will lead to substantial income transfers from
consumers to producers. The increase in prices due to the enhanced market
power has two main effects. Part of what was previously consumer surplus is
transferred to producers. A further part disappears altogether, the so-called
deadweight welfare loss. In addition any reduction in costs following the merger
adds further to the producer surplus. On the maximization of total surplus
criterion, [that is, traditional consumer welfare] the merger would be allowed by
the antitrust authority as long as the gain in producer surplus resulting from the
cost reduction is greater [93] than the deadweight loss in consumer surplus.
Any increase in market power must lead to a reduction in consumer surplus. An
antitrust authority using a narrower consumer welfare criterion would therefore
block an anticompetitive activity which increased market power to a non-trivial
extent and where the reduction in cost following merger was not great enough to
ensure that no price increase incurred. The gain in total producer surplus must
always be larger than the loss in consumer surplus because of the combined
effect of the income transfer and the deadweight loss. Thus the same merger
which would be allowed under a total surplus criterion would be blocked using a
consumer surplus criterion. 97
These key theories will be discussed to determine the most appropriate policy for
merger regulation in the modern global economic system.
97
Utton, International Competition Policy, above n 34, 92-93.
Chapter2|Page46
2.3.1 Economic efficiency (traditional consumer welfare)

Economic efficiency is widely recognized as an important policy criterion for
evaluating mergers.98 By preventing the anti-competitive acquisition of market
power (whether unilateral or coordinated), competition laws facilitate the
tendency of free markets to maximize allocative efficiency and reduce dead
weight loss.99 Indeed, many claim efficiency improvements should be (or are)
the aim of competition law as a result of their general effectiveness in producing
and maintaining competitive markets.100 It is, therefore, not surprising that all
articulated policy objectives for mergers factor in efficiency considerations to
varying degrees,101 with widespread agreement that any mergers which threaten
to reduce allocative efficiency are justifiably proscribed.102
Those who favour an efficiency approach to merger analysis argue that the only
purpose of merger policy should be and is the promotion of economic
efficiency,103 to the exclusion of all other conflicting objectives.104 This efficiency
approach is also referred to as consumer welfare, a term coined by Bork in his
seminal work, The Antitrust Paradox.105 Bork adopted the term for his efficiency
98
99
100
101
102
103
104
105
See, for example, Trade Practices Act Review Committee, Review of the Competition Law
Provisions of the Trade Practices Act (Commonwealth of Australia, January 2003) (Dawson
Report) 8.
Rule, above n 49, 3.
Arlen Duke, 'A More Efficient use of Efficiencies in Merger Authorisation Determinations'
(2007) 35 Australian Business Law Review 278, 278.
See,eg, Rule, above n 49, 3. See also Duke, above n 100, 278: Improving efficiency has
long been the stated aim of competition laws around the world . In Canada an efficiency
defence exists, so that a merger will not be prohibited if it can be demonstrated that there
are efficiency benefits that would outweigh the detriments associated with the reduction in
competition: Competition Act 1985, Chapter C-34, s 96 (Canada).
Green and Staffiero, above n 16, 8: Avoiding or limiting these economic effects provides
legitimacy for policy intervention. See further, Oliver Williamson, Economies as an Antitrust
Defense: The Welfare Tradeoffs (1968) 58 American Economic Review 18 and Fisher and
Lande, above n 12, 1583.
Cseres, above n 90, 124-125.
Ibid 125.
Bork, above n 85, 81.
Chapter2|Page47
theory because of his view that the welfare of consumers as a whole can only be
maximized when total surplus (or welfare) is maximised.106
This goal has been labelled economic efficiency, or traditional consumer
welfare, to distinguish it from more modern formulations of consumer welfare
objectives which promote outcomes beyond pure efficiency.107
Borks reference to consumer welfare is misleading and continues to generate
confusion.108
His definition of consumers includes owners of firms and
producers of goods and services;109 as a consequence, under the traditional

consumer welfare approach the terms consumer welfare is synonymous with
total surplus.110
Advocates of this approach argue that this single goal approach is superior to a
multi-goal competition policy which, among other things, might require unreal
economic distinctions, place political matters in the hands of the courts rather
than the legislature (where, it is said, they belong) and do not give business the
106
107
108
109
110
Rule, above n 49, 1-2. See also Bork, above n 85, 90-91.
Chicago School scholars continue to invoke the term consumer welfare theory when
advancing their positions. Cseres believes this is inappropriate, arguing that economic
efficiency should not be equated with consumer welfare because it stands on a total welfare
standard, and he considers Bork has caused confusion by equating the two: Cseres, above
n 90, 124 and fn 5. See also Joseph Wilson, Globalization and the Limits of National Merger
Control Laws: Gaps in Global Governance and the Need for an International Merger Control
Regime (Doctor of Civil Law Thesis, McGill University, 2002) 16, fn 20: [Borks definition of
consumer welfare is] not consumer welfare at all. Consumer welfare is defined as the sum
of producer and consumer welfare. According to the Chicagoans, if consumers lose but
producers win more than consumers lose, consumer welfare has been increased. See
further Thumann, above n 83, 265-266.
See Rule, above n 49. See further J Thomas Rosch, 'Monopsony and the Meaning of
"Consumer Welfare" A Closer Look at Weyerhaeuser' (Paper presented at the 2006 Milton
Handler Annual Antitrust Review, New York, 7 December 2006) and Antitrust Modernization
Commission, above n 63, which concludes (at 3) Antitrust law prohibits competitive conduct
that harms consumer welfare, but notes (at 26, fn 22) that debate continues about the
definition of consumer welfare and the Commissions use of the term does not imply a
choice of a particular definition.
Bork, above n 85, 108-110. Borks consumer welfare model views consumers collectively
monopolists are also consumers (at 110).
Rule, above n 49, noting that during the Reagan Administration, consumer welfare was
commonly understood to be synonymous with total welfare.
Chapter2|Page48
fair warning they deserve.111 As a consequence, social objectives such as

wealth and power distribution are rejected as inappropriate goals for competition
policy.112
[Competition law] has a built-in preference for material prosperity, but it has
nothing to say about the ways prosperity is distributed or used. Those are
matters for other laws. [Competition] litigation is not a process for deciding
who should be rich or poor, [91] It can only increase collective wealth by
requiring that any lawful products, whether skis or snowmobiles, be produced and
sold under conditions most favorable to consumers.113
This is the view also traditionally favoured by economists,114 attracted, at least in

part, by the relative ease (at least theoretically) with which efficiency
considerations may be factored into economic analysis compared with broader
social considerations. A pure economic analysis also has an inherent appeal to
regulators, providing relative objectivity and simplicity when compared to a more
equity oriented approach such as consumer surplus115 or consumer choice.
It is clear that a traditional consumer welfare approach is not concerned by
increased costs to consumers (the end purchasers) as long as this increase is
offset by an equal or greater gain to business. Thus, no significance is placed on
the socio-economic distributional effect anti-competitive mergers may have
such transfers of wealth are economically neutral because society (as a whole) is
neither better nor worse off by the consummation of the merger.116
111
112
113
114
115
116

See also Herbert Hovenkamp, 'The Reckoning of Post-Chicago Antitrust' in Antonio
Cucinotta, Roberta Pardolesi and Roger Van Den Bergh (eds), Post-Chicago Developments
in Antitrust Law (2002) 1, 4: Antitrust is no good at transferring wealth away from rich to
poor, or from large firms to small ones, and cannot be defended on that basis in any event.
Ibid. Note that the simplicity exists in theory only. It is being increasingly recognised that, in
practice, an economic efficiency standard is not so simple, especially when one has to
predict the likely consequences of a future act with imperfect information. See generally
Fisher and Lande, above n 12, 1694.
Cseres, above n 90, 125. See also Rule, above n 49, 3.
Chapter2|Page49
It is also argued that there is no legitimate political or social basis for favouring
consumers over producers when it comes to allocating surplus and that an
approach favouring end-consumers over producers inherently casts consumers
as those who count, and producers as those who dont.117 Traditional consumer
welfare advocates argue that the social value of both groups should be treated
equally118 and are highly critical of any approach treating producers (and
shareholders) as less worthy of any surplus derived from merger-generated
efficiencies.
Consequently, an economic efficiency approach to mergers would result in anticompetitive mergers being blocked only when they reduce allocative efficiency in
such a way as to decrease societys absolute wealth.119
2.3.2 Beyond mere efficiencies (modern consumer welfare)
The traditional consumer welfare view dominated thinking in relation to merger
regulation (at least in the US) until relatively recently.120 This is not surprising
given that efficiency considerations are naturally highlighted in the area of merger
control because of the ability for mergers (unlike, for example, cartels) to
simultaneously reduce competition and enhance efficiencies.121
In recent years, however, it has increasingly been accepted that competition
policy does and should play a welfare role beyond pure efficiencies122 and, as a
117
118
119
120
121
122
Heyer, above n 30, 24.

See, eg, Rule, above n 49, claiming that there is no coherent a priori basis for believing that
consumers in any given market are inherently more deserving of surplus than the producers
in that market. The social value of the surplus is the same.
The Chicago School based theory that the only purpose of merger regulation is to increase
economic efficiency was the predominant view in the US, particularly in the 1980s: see
Lande, Wealth Transfers, above n 33, 68, Bork, above n 85, Areeda and Turner, above n
74, 149 and Richard A Posner, Antitrust Law: An Economic Perspective (1976). Compare
Rosch, above n 108.
Duke, above n 100, 278.
See, eg, Eleanor M Fox, 'Post-Chicago, Post-Seattle and the Dilemma of Globalization' in
Antonio Cucinotta, Roberta Pardolesi and Roger Van Den Bergh (eds), Post-Chicago
Developments in Antitrust Law (2002) 76-77. See also Robert H Lande, 'Proving the
Obvious: The Antitrust Laws Were Passed to Protect Consumers (Not Just to Increase
Efficiency)' (1999) 50 Hastings Law Journal 959, 963-964.
Chapter2|Page50
corollary, the efficiency-exclusive traditional consumer welfare theory is gradually

losing support123 and being replaced with a broader modern consumer welfare
theory124 which incorporates social, moral and political concerns.125
Advocates of modern consumer welfare argue that the competition laws can
deliver a range of social justice outcomes126 and can appropriately be used for
this purpose.127 While efficiency concerns remain important for competition
policy, and overlap considerably with consumer interests,128 they are and should
be subordinate to them.129
The broader objectives sometimes advanced as appropriate for merger policy
include consumer choice,130 curtailing market power, maintenance of mediumsized and small firms,131 regional development,132 export promotion,133
maintaining economic decentralization,134 job protection and promoting national
interests.
123
124
125
126
127
128
129
130
131
132
133
134
For examples of those who continue to advocate a total welfare standard over a consumer
focus see: Rule, above n 49 and Heyer, above n 30.
Some resent, with great hostility, the use of the term consumer welfare to incorporate
broader social objectives than those proposed by Bork, claiming that at the time Bork put
forward his consumer welfare position it was only the cranks and fuzzy thinkers on the
fringe who were hostile to it, but that twenty years on the cranks and fuzzy thinkers decided
it is easier to co-opt the label consumer welfare and proclaim it to mean something very
different: Rule, above n 49, 5.
See Lande, Wealth Transfers, above n 33, 68 fn 5. Advocates of a modern consumer
welfare approach claim competition laws were enacted to prevent unfair extraction of wealth
from end consumers, although they acknowledgee that there are conflicting statements of
legislative purpose: Lande, Wealth Transfers, above n 33, 83.
It is not argued that merger policy should be directed to ensuring consumer welfare is
maximised, but rather that it should prohibit anti-competitive mergers which reduce endconsumer welfare: see, eg, Farrell and Katz, above n 86, 8.
Neil W Averitt and Robert H Lande, 'Using the "Consumer Choice" Approach to Antitrust
Law' (2007) 74 Antitrust Law Journal 175, 187 and 223-233.
Ibid 187. See also Lande, Wealth Transfers, above n 33, 105.
See pp 56-57, below
Ibid.
Ibid.
Ibid, 92 and 16.
Chapter2|Page51
It is the first of these objectives (or a variant thereof) that modern consumer
welfare advocates. Many of the other advanced objectives will flow naturally from
application of a modern consumer welfare objective and, despite not having any
strong grounding in welfare economics,135 modern consumer welfare is a
commonly proclaimed goal of competition policies by governments and
enforcers.136
The primary consumer welfare benefit of a strong competition policy for mergers
is the maintenance of price at a competitive level. While traditional consumer
welfare advocates argued that mergers which simply transfer wealth from
consumers to producers (through higher prices) without any net efficiency
reduction should be permitted, modern consumer welfare advocates disagree,
considering it both appropriate and desirable for competition policy to incorporate
a distributional goal of ensuring consumer surplus is not reduced through anticompetitive conduct. This position has led some to claim that modern consumer
welfares sole focus is consumer surplus and that such a policy is not
economically sound. This is an inaccurate and unjustified attack on the modern
consumer welfare theory. By preventing anti-competitive wealth transfers
competition policy can also achieve a number of related goals that cannot always
be achieved by a pure efficiency goal.
Modern consumer welfare does not prevent all distribution from consumers to
producers. Competitive tactics that lead to increased power over prices such
as efficient firm operation is not prohibited and no such prohibition could be (or
is sought to be) reasonably justified.137 It is only where that power is obtained
135
136
137
This may explain why lawyers tend to take wider public interests into account in cases
where economists would be solely concerned about efficiency arguments: Cseres, above n
90, 128.
Lande, Wealth Transfers, above n 33, 70: Congress did not pass the antitrust laws to
secure the "fair" overall distribution of wealth in our economy or even to help the poor.
Congress merely wanted to prevent one transfer of wealth that it considered inequitable, and
to promote the distribution of wealth that competitive markets would bring. In other words,
Congress implicitly declared that "consumers' surplus" was the rightful entitlement of
Chapter2|Page52
unfairly, in a way that impacts on the natural competitive state of the market that
distributional issues are considered. It is, therefore, the unfair transfer of wealth
from consumers to powerful producers138 that raises the ire of policy-makers.
Congress passed the Sherman Act to further a number of goals. Its main
concern was with firms acquiring or possessing enough market power to raise
prices artificially and to restrict output. Congress' primary aim was to enable
consumers to purchase products at competitive prices. Artificially high prices
were condemned not for causing allocative inefficiency but for "unfairly"
transforming consumers' wealth into monopoly profits. All purchasers, whether
consumers or businesses, were given the right to purchase competitively priced
goods. All sellers were given the right to face rivals selling at competitive
prices.139
The transfer, if it follows an anti-competitive merger, is considered unfair

because the resulting market power enables firms to charge consumers
artificially high prices.140
A consumer welfare approach incorporating distributional elements (in particular,
preventing wealth transfer from consumers to big business and the undesirable
social consequences this transfer might produce)141 can be justified for a number
of reasons, discussed below.142
138
139
140
141
142
consumers; consumers were given the right to purchase competitively priced goods. Firms
with market power were condemned because they acquired this property right without
compensation to consumers. [footnotes omitted].
See, eg, Lande, Wealth Transfers, above n 33, 136. See also Lande, Proving the Obvious,
above n 122, 961: While the Congresses that passed the antitrust laws also had additional
goals including greater economic efficiency these legislatures overriding concern was
that consumers should not have to pay prices above the competitive level. All other goals
were subordinated to this concern. (footnotes omitted)
See Lande, Wealth Transfers, above n 33, 68 and 141.
Another key reason that has been advanced is that consumers normally operate from a
weaker bargaining position than business so that a pro-consumer policy objective justifiably
redresses this imbalance. See Cseres, above n 90, 127-8. Compare Elhauge and Geradin,
above n 4, 896 quoting O Williamson, Economics as an Antitrust Defense Revisited (1977)
125 University of Pennsylvania Law Review 699, 711.
Chapter2|Page53
Preventing wealth concentration

A traditional consumer welfare approach which has no concern for distributional
consequences of anti-competitive behaviour, will not prevent the unfair
accumulation and concentration of wealth. In this respect it has been suggested
that the leading philosophical claim made in favor of a consumer surplus
standard is that it better reflects societys judgments about the appropriate
distribution of economic welfare than does a total surplus standard.143
It is clear that wealth distribution does affect social welfare. Farrell and Katz
make the observation that it is
a widely held view that a dollar is worth more to society in the hands of a poor
person than those of a rich one. This view underlies the support for a variety of
redistributive policies, including progressive income taxation and the provision of
government-subsidized health insurance for low-income families.144
While some argue that it is difficult in all cases to know who is more deserving of
efficiency-generated surplus and, in any event, distribution is best left to taxation
or other social policies, this misses the point. As only unfair surplus transfers are
considered by merger policy, it is appropriate and more equitable to prevent the
wealth re-distribution rather than try to artificially subsequently compensate for
that distribution. It is also clear that while other social policies might assist in redistributing some wealth to some consumers, it does not prevent massive wealth
accumulation by large companies through anti-competitive mergers. It has been
estimated, for example, that if no monopoly profits existed the share of total
personal wealth controlled by the wealthiest 2.4% of American families in 1962
would have been reduced from 40% to somewhere between 16.6 and 32%.145
143
144
145
Farrell and Katz, above n 86, 8: The use of total surplus implicitly assumes that the
distribution of income is socially optimal, so that taking a dollar away from one member of
society and giving it to another member would not affect social welfare.
Ibid 9.
William S Comanor and Robert H Smiley, Monopoly and the Distribution of Wealth (1975)
89 Quarterly Journal of Economics 177, 191-93, cited in Lande, Wealth Transfers, above n
33, fn 37. See also Scherer and Ross, above n 55, ch 2.
Chapter2|Page54
Avoidance of concentration of power

Concentration of wealth invariably leads to concentration of power and the
possibility of such power clearly played a role in the enactment of early
competition laws.146 In this respect Lande observes that US Congress was
motivated by a desire to curb the social and political power of large
businesses.147
There are clear socio-political concerns arising from mega-mergers which
generate mega firms able to wield enormous political influence. Not only is
prevention of such power concentration desirable, some have argued that
government has the duty to prevent private power from threatening the freedoms
of the people .148 Fox has also made this sober observation.
... only international competition rules and enforcement can rein in firms that are
bigger than nations. private power is increasingly unleashed by global
liberalization, and nations are increasingly either powerless to contain it or
reluctant because blinded by the race towards hegemony.149
While economic efficiency advocates talk a lot about cost-savings, this speaks
little of the social consequences of an increase in market power.150
146
147
148
149
150
Lande, Wealth Transfers, above n 33, 137. See also Giuliano Amato, Antitrust and the
Bounds of Power: The Dilemma of Liberal Democracy in the History of the Market (1997) 2.
Lande, Wealth Transfers, above n 33, 96 and at 105-106. See also ABA Section of Antitrust
Law, Mergers and Acquisitions (3rd ed, 2008) 4 and Eleanor M Fox, Economic
Concentration, Efficiencies and Competition: Social Goals and Political Choices in ABA
Section of Antitrust Law, Industrial Concentration and the Market System: Legal, Economic,
Social and Political Perspectives (1979) 137, noting that the US Congress and antitrust
enforcement agencies had relied on a relationship between increasing concentration and
declining competition.
Fox, Post-Chicago, above n 122, 76.
Ibid 84. The hazards of mergers generating mega-firms which become too big to fail has
also been strikingly demonstrated by the 2008 global financial crisis: see generally Too Big
to Fail?: The Role of Antitrust Law in Government-Funded Consolidation in the Banking
Industry, Hearing before the Subcommittee on Courts and Competition Policy of the
Committee on the Judiciary, House of Representatives (111th Congress, 1st Session, Serial
No 111-33, 17 March 2009).
Utton, International Competition Policy, above n 34, 18: Very few large mergers are
proposed without the promoters announcing that they expect substantial cost savings to
Chapter2|Page55
Competitive scenario is the norm

Modern consumer welfare advocates claim that consumers should be entitled to
consumer surplus because the competitive scenario is normal and monopoly, or
the artificial generation of market power, is abnormal and constitutes an unfair
taking of consumer property.151 Thus, while traditional consumer welfare views
transfer of consumer surplus to producers as economically neutral, that in itself
does not justify the distributional consequences arising from a distortion of natural
market conditions or market failure.
This also provides an answer to claims, by some, that a consumer surplus
approach unjustifiably treats consumers as more worthy than producers. In the
case of anti-competitive conduct producing the distributional transfer consumers
are more worthy, not because they are consumers per se, but because free and
natural market conditions determine that they should benefit. The laws,
therefore, do not provide special privileges to consumers, but seek to protect
consumers from monopolistic exploitation.152
Other considerations also support the adoption of a modern consumer welfare
approach to merger regulation. For example, such an approach promotes
consumer confidence and public support for competition law, because more
people think of themselves as consumers than as recipients of profits,153 so that
as well as being intrinsically meritorious, there are political advantages.
A policy promoting consumer and public welfare would, as a bi-product, serve the
social interest associated with protecting small business. Although protection of
151
152
153
result, once reorganization has taken place. Far fewer, if any, ever announce that the
merger will also increase market power and prices. In many cases this may well be the
result such mergers involve a trade-off between reduced costs and increased market
power.
See Lande, Wealth Transfers, above n 33, 76. See also, Roger D Blaire and David L
Kaserman, Antitrust Economics (1985) chapter 1 and 2.
See, eg, Cseres, above n 90, 128.
Chapter2|Page56
small business should not be a goal of competition law per se,154 protection of a
competitive market environment may sometimes have this effect.
Modern consumer welfare may also be justified on more pragmatic grounds. If a
merger is genuinely efficiency-producing then there is no reason why it should
result in supra-competitive prices.
[T]he best justification for a consumer welfare test may not be that it is a better
measure of social desirability than total welfare. It is rather that a consumer
welfare test allows mergers that increase total welfare as long as the merging
firms are willing to compensate for any adverse effects on consumers and forces
merging firms to put their money where their mouth is on the claim that efficiency
gains offset consumer harm.155
The focus of the foregoing has been consumer surplus in the form of competitive
pricing, but it is increasingly clear that modern consumer welfare approach can
facilitate broader consumer objectives. Price is only one dimension of
competition, with others including diversity and quality of the products,
promotional effort, and pre-sale and post-sale services156 and innovation. Thus,
in addition to cost-saving, modern consumer welfare promotes the availability to
consumers of a range of choice and increased quality157 and can improve the
social aspects of the market such as the safety and health of consumers.158
It is not surprising, then, that recent literature has advanced a goal of consumer
choice as the most appropriate for competition policy and this is the objective
advocated in this thesis. Consumer choice involves a reformulation of modern
consumer welfare theory. The latter has typically focused on consumer surplus
as the determinant of whether or not potentially anti-competitive mergers should
154
155
156
157
158
Lande, Wealth Transfers, above n 33, 104: Lande claims Congress, in enacting US antitrust
statutes was motivated in part by a desire to protect small business, although this goal was
not meant to override other goals consumer interests were seen to be paramount.
Elhauge and Geradin, above n 4, 901
See ibid 572-573 for a discussion of non-price aspects of competition which have
traditionally been ignored by competition law analysis.
Cseres, above n 90, 121 and see also 124.
Chapter2|Page57
be permitted, on the assumption that other welfare benefits would flow from such
an analysis. Modification of the theory to incorporate a consumer choice model
correctly recognizes that, if advancing consumer interest (or, more accurately,
preventing consumer detriment) is to be the principal goal of merger regulation,
then it should be overtly recognized that price is not the only factor valued by
consumers; while price might frequently be paramount, other factors like range,
brand and quality are key factors in product or service selection. Consequently,
mergers which significantly reduce competition and which are likely to negatively
impact on consumer choice, should be challenged.
This consumer choice approach to modern consumer welfare159 has been
advocated on the basis that price and efficiency are no longer sufficient, are hard
to fully understand and are not particularly transparent in their application.160 A
consumer choice approach, while fitting neatly within modern consumer welfare
theory, also takes full account of all the things that are actually important to
consumers price, of course, but also variety, innovation, quality, and other
forms of non-price competition161 and more explicitly recognizes that consumers
do not just want competitive prices they want options.162 This is particularly
important where price competition is minimal but, pre-merger, rigorous
competition exists in relation to quality and innovation; high tech audio may
provide an example in this respect. In most cases, a consumer price-based
approach will be the same as a choice-based approach, with the vast majority of
markets involving price as the key consumer choice mechanism.163 Where this is
not the case, it provides for a broader recognition of the benefits of competition
without rendering the operation of the principles undisciplined or unpredictable
exponents demonstrating that such an approach, though difficult to measure in
159
160
161
162
163
See Robert H Lande, 'Consumer Choice as the Ultimate Goal of Antitrust' (2001) 62
University of Pittsburgh Law Review 503 and Averitt and Lande, above n 128.
Averitt and Lande, above n 128, 175.
Ibid.
Ibid 178-179.
Ibid 177.
Chapter2|Page58
qualitative terms, is no less scientific or objective than the efficiency or price

models.164
2.3.3 Global consumer welfare
The process of merger review and analysis is significantly more complex where
transnational mergers are concerned. Competition policy has followed a national
rather than an international agenda165 with decisions on mergers tending to be
based almost exclusively on the market power effects within the country
concerned.166 This is partly historical, in that competition laws preceded the
globalization of markets, but it is also the case that international mergers have
the capacity to rouse strong nationalistic feelings.167 However, these
nationalistic approaches to merger regulation need to be reviewed in light of
increased globalization168 which, in the present context, has resulted in an
increasing number of multinational markets.
To some extent, issues relating to globalization are already recognized. For
example, constraints imposed by import competition are overtly recognised in
most domestic merger guidelines. In addition, mergers which might lessen
competition and reduce local consumer choice are permitted in some jurisdictions
where the merger nevertheless increases the ability of the merged entity to
compete internationally or increase levels of export.169 While this might appear to
serve a more global agenda, it is clear that these exceptions are created to
advance national public interest and not to improve global welfare. As a result,
these global policies might come into conflict with a more pure global welfare
164
165
166
167
168
169

Ibid.
Ibid, 87.
See generally Andrew Guzman, 'Is International Antitrust Possible?' (1998) 73 New York
University Law Review 1501 and Utton, International Competition Policy, above n 34, ch 3.
See, eg, Michal Gal, 'The Effects of Smallness and Remoteness on Competition Law - The
Case of New Zealand' (2007) 14 Competition and Consumer Law Journal 292.
Chapter2|Page59
objective, or with other national objectives, as has been demonstrated by some

high profile transnational merger cases.170
In most cases merger analysis will remain the same whether welfare
considerations are national or global. In the case of purely national markets,
having no effect internationally (direct or indirect), the national competition
authority can carry out its analysis using a national welfare criterion171 with no
conflict existing between national and global welfare. However, the present focus
on national markets means that where consumer effects are felt in one country
and producer effects in another, then the country with consumers is likely to block
the merger while a global authority might allow it if there were net welfare
gains.172 Only in the special case where each country produces and consumes
the same proportion of world output will their antitrust positions correspond and
also be in line with global policy.173 In all other cases the antitrust response will
be in conflict with the optimal global policy.174 The likelihood of such conflict in
welfare outcomes is likely to increase in the future.175
Thus, while a transnational merger might increase welfare in the country of the
producers (and not harm national consumers) global consumer welfare might be
harmed if the merger reduces consumer welfare in the country or countries of the
170
171
172
173
174
175
See chapter 5 at section 5.6. See also Wilson, above n 107, 23, who claims that in
analysing the Boeing case US antitrust authorities ensured the promotion of US economy
rather than the global consumer welfare. Wilson quotes government economic adviser,
Laura Tyson as saying (at 24) The US economy is better off even if consumers of airplane
seats [around the globe] are somewhat worse off. See also ''McBoeing' Should be Cleared
for Takeoff', Wall Street Journal (New York), 22 July 1997, A14 and Steven Pearlstein and
John Mintz, 'Too Big to Fly?', Washington Post (Washington), 4 May 1997, H01.
See ibid 78-79: In principle, if the antitrust consequences globally are adverse and severe,
all authorities should be opposed because global economic welfare would be reduced if the
merger proceeded. The most contentious mergers will be those where the market extends
beyond national boundaries and where the incidence of any anticompetitive effects is
unevenly distributed. The most [79] obvious case is where a merger between companies in
country A adversely affects consumers in country B who have to pay higher prices.
Ibid 94.
Ibid.
Ibid 73-74 and 92-3.
Chapter2|Page60
end-consumers. Consequently, a global modern consumer welfare approach is

the preferred objective.176
An antitrust agency required to take a purely national view of the likely effects of
a merger might conclude that if the benefits are felt in the domestic market while
any detriments occur in foreign markets, the merger could proceed. Generally
applied, such an approach would very likely lead to a reduction in the volume of
merger activity as individual countries seek to protect their own position. To
avoid this possibility there is thus a need for antitrust authorities to apply general
principles regardless of where the benefits and detriments occur. A proposed
merger likely to produce net benefits for consumers, wherever they may be, could
be met with approval.177
Although this may be difficult to achieve at a national level where national interest
will inevitably influence decision making,178 this should be the preferred objective
of any international system of transnational merger regulation. It has been
suggested that a reduced focus on economic efficiency179 and an increased
consideration of the modern consumer welfare, incorporating consumer choice
benefits, might better assist in achieving this objective by facilitating greater
international convergence on competition policy:180
The concept of choice is readily communicated across the barriers of different
language, culture, and experience. It is much more transparent and
straightforward than the language of efficiency.181
176
177
178
179
180
181
See, eg, Noonan, above n 33, 94-96 and Wilson, above n 107, 17. See also Utton,
International Competition Policy, above n 34, 78, Fox and Lowenfeld, above n 210, A19 and
Eleanor M Fox, 'Competition Law and the Agenda for the WTO: Forging the Links of
Competition and Trade' (1995) 4 Pacific Rim Law & Policy Journal 1, 12: people are
better off by maximizing world economic welfare rather than by maximizing their nations
power vis--vis the power of other nations in the world.
See, eg, chapter 9, fn 150, below.
See, eg, ibid 250 and Fox, Post-Chicago, above n 122, 83-84.
Chapter2|Page61
2.4 Policy objectives for the procedural regulation of mergers

2.4.1 Introduction
The procedural regulation of mergers is arguably more important than the
substantive test delineating their legality. This is because the substantive
prohibition would have little impact if its enforcement was ineffective. Strong
regulation and enforcement can also have the flow-on benefit of deterring other
potentially anti-competitive mergers.182 Although enforcement is not solely the
purview of competition regulators (affected third parties may often challenge
mergers on substantive grounds), it is the regulators who are responsible for the
vast majority of enforcement. The way in which they go about that regulation
therefore has significant impact on the effectiveness of the substantive law.
While some regulation is important to provide teeth to the substantive laws, overregulation of merger activity has the potential to deter or delay conduct that would
otherwise be considered in the public interest. It can also impose substantial and
unnecessary costs on the parties involved many of whom will not have
engaged in any prohibited conduct - and taxpayers, who often foot the regulatory
bill. In this respect, there has been some recognition that, at least in the context
of collusion, it might be optimal for society (consumers and producers) to tolerate
some degree of collusion among firms, while saving on investigation, prosecution
and compliance costs and reducing the probability of erroneously acting against
non-colluding firms.183 Under-regulation, on the other hand, could allow anticompetitive mergers to proceed without scrutiny, resulting in a reduction of global
modern consumer welfare.
182
183
See generally Albert Banal-Estaol, Paul Heidhues, Rainer Nitsche and Jo Seldeslachts,
Merger Clusters during Economic Booms (Discussion Paper No SP II 2006-17,
Wissenschaftszentrum Berlin, September 2006). See also William J Baer, 'Twenty years of
Hart-Scott-Rodino Merger Enforcement: Reflections on Twenty Years of Merger
Enforcement Under the Hart-Scott-Rodino Act ' (1997) 65 Antitrust Law Journal 825, 834.
David Bartolini and Alberto Zazzaro, 'The Anticompetitive Effects of the Antitrust Policy'
(Working Paper No 18, MoFiR, Universita Politecnica delle Marche, Department of
Economics, 2009) 1 (footnotes omitted).
Chapter2|Page62
It is, therefore, important to get the balance right. This balancing exercise is not
unique to merger regulation. In relation to the criminal law, for example, a
balancing exercise is always involved. While it is theoretically possible to capture
all drink drivers, the cost and inconvenience of such enforcement makes this
undesirable. Instead a series of random detection mechanisms which
simultaneously provide some risk of detection, while not imposing prohibitively
high costs, both on the enforcement authorities and on law-abiding road users, is
adopted to achieve a more fair and balanced enforcement process; at least until
some better form of detection becomes available. Similarly, while we can prevent
(nearly) all road fatalities by the simple expedient of prohibiting all motor vehicles
or reducing speed limits to walking pace, we as society are prepared to
accept a certain level of fatalities in exchange for the benefits of more efficient
transportation systems.184
In this section the foundation is laid for making a determination of the appropriate
balance in the merger laws and the evaluation of the existing regulatory
processes adopted in the enforcement of substantive merger laws in OECD
countries. Chapter 4 will determine the most appropriate regulatory process
against this framework.
2.4.2 Purpose of merger regulation
Regulation of mergers should either provide a mechanism to prevent the
consummation of mergers likely to contravene substantive law or facilitate
remedies for contravention of substantive laws which are capable of restoring the
184
Similarly, it is also possible to avoid all road deaths simply by removing all motor vehicles
from the roads. There are, however, countervailing benefits associated with the mobility
attached to motor vehicles that are generally considered sufficient to outweigh the significant
number of injuries and deaths occurring on the roads; the ability to move quickly also
enables emergency services to respond to crisis thereby saving lives that might otherwise
be lost. Society does not value those lives more than those lost on the road, but a balancing
exercise factoring in the benefits of motorized travel with the detriments associated with
removing this form of transport is conducted to ensure the balance achieved is the one most
socially desirable.
Chapter2|Page63
market to the position it was in prior to contravention, or provide a combination of

both. Intuitively, whenever practical, preventing unlawful conduct is more
desirable than subsequent attempts to rectify the harm it has caused. It is,
therefore, not surprising that the majority of OECD countries focus merger
regulation on advanced detection and prevention rather than post-acquisition
remedial action. This is achieved, in part, through PMN systems which are
designed to ensure early detection and, where appropriate, prevention or
modification of potentially anti-competitive mergers, with the objective of
preventing economic and other harmful effects that might otherwise result.185
Mergers are uniquely suited to this kind of advanced screening for several
reasons.
1. Mergers are inherently public in nature
This is to be contrasted with most other forms of anti-competitive conduct,
including the quintessential anti-competitive behavior, cartels, which are
typically covert and therefore do not lend themselves to pre-notification
processes.
2.
Mergers are not inherently anti-competitive

A screening procedure is not necessary or appropriate for conduct which
is inherently anti-competitive. Mergers, however, are not of this nature,
with the vast majority raising no anti-competitive concerns. Consequently,
a mechanism by which they can be evaluated in advance can have value
both for the parties and the regulators; regulators obtain a mechanism for
detecting and preventing anti-competitive mergers in their incipiency and
firms can acquire greater certainty about the legal position of their
185
European Commission, Mergers Overview, above n 29. See also Choe Chongwoo and
Chander Shekhar, 'Compulsory or Voluntary Pre-merger Notification? Theory and Some
Evidence' (Working Paper No 13450, MPRA Paper, 2009) 1: The fundamental rationale for
such notification provisions is to give the regulatory bodies time to challenge mergers, and
seek modifications if necessary, before they are realized.
Chapter2|Page64
merger.186 This desire for certainty is evidenced, in part, by the high

notification rate of mergers in countries which do not impose mandatory
notification requirements187 and by recent calls for the introduction of
voluntary notification options for mergers not subject to mandatory
notification requirements.188
3. Mergers bring about structural strange
Structural changes brought about by mergers mean that where
competitive harm is caused it is often difficult, if not impossible, to reverse
that harm though post-conduct orders.189 The problems associated with
reversing structural change unscrambling the eggs provides
additional incentives for regulators to block, or modify, potentially anticompetitive mergers in their incipiency.
These factors combine to make mergers ideally suited to advanced regulatory
interference and competition agencies have generally been eager to take
advantage of that opportunity.190
2.4.3 Criteria for assessing the regulation of mergers prior to

consummation
In achieving the purpose of advanced detection and prevention of anticompetitive mergers, a number of criteria should be observed. These criteria
apply whether or not there is a formal PMN regime in operation and, if there is,
whether or not it is mandatory and voluntary.
186
187
188
189
190
Stephen G Corones, The Treatment of Global Mergers: An Australian Perspective (2000)

20 Northwestern Journal of International Law and Business 255, 257.
Chander Shekhar and Philip L Williams, Should the Pre-Notification of Mergers Be
Compulsory in Australia? (2004) 37 The Australian Economic Review 383, Chongwoo and
Shekhar, above n 185, 6 and Corones, above n 186, 257.
See, eg, Robert B Bell, Voluntary HSR Filings: A Modest Proposal (2009) 23 Antitrust 69.
See further chapter 4, below.
Rule, above n 49, 3, observing that it is generally agreed that enforcement policy should
block mergers that will alter market structure in a way that is likely to lead to higher price,
lower output, and reduced allocative efficiency.
Chapter2|Page65
(a) regulation must be capable of identifying and preventing most anticompetitive mergers prior to consummation
The purpose of any advanced notification or detection system for mergers is to
evaluate and prevent mergers likely to cause competitive harm contrary to the
substantive laws. Consequently, to be considered effective any such system
must be capable of identifying most of those mergers likely to infringe the
substantive laws. They need not, however, be capable of capturing all such
mergers. The cost of ensuring every anti-competitive merger is detected in
advance is likely to be prohibitively high and the other criteria will therefore
preclude such absolute coverage.
(b) the cost of the regulation should not exceed the cost of allowing anticompetitive mergers to proceed
The prophylactic benefits of PMN must be 'weighed against the increasing
burdens the system is placing on business and regulators'.191 In this respect, the
cost of the regulation, both in purely economic as well as in social terms, should
not exceed the cost of allowing anti-competitive mergers to proceed without prior
investigation.192 The purpose of the regulation is to reduce the chances for
economic or social loss occasioned by the consummation of an anti-competitive
merger. If this cost is less than the cost of detecting and preventing the merger
then that purpose will not have been served.
Consistent with a global modern consumer welfare objective, cost of regulation
must be defined to include not merely the economic cost incurred nationally and
internationally, but also the social cost of preventing, delaying or deterring
191
192
J William Rowley, Omar K Wakil and A Neil Campbell, 'Streamlining International Merger
Control' (Paper presented at the EC Merger Control 10th Anniversary Conference, Brussels,
14 September 2000) 22.
This cost includes the cost of any post-merger litigation of anti-competitive mergers.
Chapter2|Page66
mergers that might have social benefits beyond the pure economic. The nature
of these costs will be examined in detail in chapter 8, but include the cost of
enforcement, the cost of compliance, including notification fees and lost
productivity and the cost of delay.
These costs must be weighed against the costs of permitting anti-competitive
mergers to proceed without pre-evaluation, including:193
the economic and social cost of increased market power associated with
anti-competitive mergers; and
the cost of post-merger challenges by agencies and third parties, which,

historically, have proven substantial.194
Where the costs of the latter do not exceed the costs of the former the regulation
can be said to be failing in its economic and social objectives.
(c) the cost of the regulation should not exceed what is necessary to
identify and prevent those mergers having likely anti-competitive effects
Even where the cost-benefit analysis justifies PMN, the cost of that regulation
should not exceed what is necessary for the purpose of identifying and
preventing those mergers having likely anti-competitive consequences; in
particular, even where a proposed merger does raise anti-competitive concerns,
the regulatory requirements should be no more than is necessary to make this
determination.
193
194
These costs will be assessed in chapter 4.

For example, United States v El Paso Natural Gas Co, 376 US 651 (1964) involved more
than seven years of litigation followed by divestiture orders taking ten years to finalise.
Compare Rowley, Wakil and Campbell, above n 191, 8 who claim that it is only in a very
limited number of cases that it will ... be difficult or impossible to remedy a merger
satisfactorily after it is consummated.
Chapter2|Page67
(d) the cost of complying with the regulation should not be such as to
unduly burden parties to those mergers which are unlikely to have any anticompetitive consequences
The vast majority of mergers do not raise competition concerns.195 There is little
doubt that current mandatory PMN regimes require notification and evaluation of
many mergers both national and transnational having little or no potential to
significantly impact competition. The costs associated with compliance for those
parties should be minimized. Most jurisdictions now seek to achieve this by
limiting the initial information requirements of notification196 so called stage 1
investigations but the costs are still frequently quite substantial. Work to
minimize these costs should be ongoing.
(e) the regulatory obligations should be clearly stipulated

It must be relatively simple for parties to determine whether or not they are
required to comply with notification requirements. In this respect the International
Competition Network (ICN) has recommended that notification thresholds should
be clear and understandable,197 that they should be based on objectively
quantifiable criteria198 (such as turnover) and that they should be based on
information readily accessible by the parties. 199 In particular, clarity and
195
196
197
198
199
See, eg, ICN, 'Recommended Practices for Merger Notification Procedures' (Merger
Working Group 2002, amended 2003, 2004, 2005, 2006) recommendation VA, working
party comment 1: most transactions do not raise material competitive concerns.
See, eg, ICN, Recommended Practices for Merger Notification Procedures, above n 195,
recommendation VA: Initial notification requirements should be limited to the information
needed to verify that the transaction exceeds jurisdictional thresholds, to determine whether
the transaction raises competitive issues meriting further investigation, and to take steps
necessary to terminate the review of transactions that do not merit further investigation.
ICN, Recommended Practices for Merger Notification Procedures, above n 195,
recommendation IIA.
recommendation IIB.
Ibid.
Chapter2|Page68
simplicity should be essential features of notification thresholds,200 particularly

giving consideration to the fact that businesses must often make that
determination in a range of jurisdictions. Subjective assessments, such as
market share or potential effects201 should not be used to determine these
thresholds.
(f) the regulation must be capable of operating within a commercially

realistic and predictable timeframe
Time and certainty is often critical for the success of a merger.202 Regulation
should operate in a way that permits parties to predict with relative certainty the
duration of the review process and that time frame should be commercially
practicable.
(g) the regulation must be capable of implementation by all OECD

countries, practically and politically
To increase consistency and thereby reduce compliance costs, the type of
regulation adopted should be capable of implementation by all OECD countries,
both in terms of resources and political will. A regulation incapable of such
implementation is unlikely to meet with widespread success.203
200
201
202
203

recommendation IIA, Working Group Comment 1.
recommendation IIB, Working Group Comment 1.
See, eg, Corones, above n 186, 257. See also chapter 8 at 8.2.2, below.
See also chapter 7, below.
Chapter2|Page69
2.4.4 Assessing domestic regulation

With the exception of the EU, all current merger regulation takes place at a
national level, there being no international body involved in formulating or
enforcing merger laws and regulations.204
In relation to the first four criteria articulated above, in very broad terms, for the
regulation of any individual merger to be considered efficient the following must
be true:
X>Y
Where
X=
the cost to society (economic and social) of allowing the merger to

proceed (including, in some cases, the cost associated with post-merger
challenge) and
Y=
the cost of reviewing the merger in question (including the cost to the
regulators, the cost to third parties of complying with information requests
from the regulators and the cost to the parties themselves).
Even where X is not greater than Y in the case of an individual merger, the
regulation itself might nevertheless be considered efficient in the context of all
mergers. If:
X1 > Y1
where
204
X1
is the cost to society of allowing all anti-competitive mergers to proceed

and
Y1
is the cost of regulating all mergers (including here the cost to parties
of mergers raising no anti-competitive concerns)
While the ICN and OECD make recommendations, they have no formal role in the
formulation or enforcement of merger regulation policy.
Chapter2|Page70
the regulation will confer a benefit on society and, the greater the difference
between X1 and Y1 the greater the efficiency of the regulation providing that
benefit.
For a more detailed examination of the costs and benefits associated with the
regulation, the formula must be broken down into its constituent elements. For
example, the cost of allowing a merger to proceed is not simply confined to
economic damage attributable to the particular merger in question, but may
include related social costs and a loss of deterrence value of the regulatory
system. The cost benefits may, therefore, be more usefully expressed as follows:
(W1 + Z1) (B1 + C1) = A1
where
W1 is the cost of allowing all anti-competitive mergers caught by the
regulation to proceed, including both the cost of anti-competitive effects
on society and the cost of any litigation (to the parties and to the
taxpayers) of pursing post-merger litigation
Z1 is the benefit obtained by deterring potentially anti-competitive mergers
B1 is the cost of reviewing all mergers caught by the regulation which do not
raise competition concerns
C1 is the cost of reviewing all mergers caught by the regulation which do
raise anti-competitive concerns
A1 is the net benefit or cost to society of reviewing mergers.
Cost is defined to include all costs of regulation, including cost to regulators, cost
to merging parties, cost to third parties involved in providing information to the
regulators and cost to taxpayers of court proceedings and litigation directed
toward enforcing the regulation or preventing a merger determined to be contrary
to substantive law. It includes the cost to all the parties in terms of resources as
well as observable/tangible cost. Although difficult to calculate, it should also
Chapter2|Page71
incorporate social costs,205 which are particularly relevant where anti-competitive

mergers are allowed to proceed (thus, will be most relevant to W1 and Z1).
For the regulation to be justified A1 must be greater than zero; that is cost must
be less than benefit obtained.206 The higher A1 is the more efficient
economically is the regulatory process. The value of B1 should be considerably
less than the cost of C1 in other words, the cost of regulating potentially anticompetitive mergers should be higher than that of regulating those mergers
which do not raise competition concerns.
2.4.5. International regulation
National regulation of mergers first emerged when relatively few mergers had
transnational market implications and merging parties were therefore not
subjected to multiple regulatory requirements. There are now more than 70
countries which impose mandatory PMN regimes and the efficacy of regulations
must now be considered in this more global context.
It is clear that the current multitude of PMN regimes impose heavy burdens on
firms involved in transnational mergers. On a per-nation basis, transnational
205
206
There may be social benefits which are not factored into an economic analysis; similarly
there may be social detriments of preventing a merger (a firm might fail and cause
redundancies that might otherwise not exist; this might be economically neutral (arguably)
but socially undesirable).
Even if A1 is smaller than zero it does not necessarily mean that it should be abandoned.
For example, if this assessment was made of the criminal law the economic cost of locking
up prisoners would almost always outweigh any economic benefit the criminal law might
yield and removing a criminal - who otherwise may have been a productive (working)
member of society might even increase the economic cost of incarceration to society.
However, the social cost of crime and the general desirability of seeing justice done, results
in society placing the (arguably) social benefit of incarceration (punishment, deterrence)
ahead of economic rationalism. Competition law however, is often seen as predominantly, if
not solely, economic legislation and therefore not subject to the same social balancing
exercise. However, where a broader modern consumer welfare objective is accepted, and
competitive markets viewed as the norm, conduct by corporations which uncermines this
norm and transfers wealth from consumers to producers cannot be viewed purely in terms
of economic harm as with the criminal law, there is a social element involved which might
justify even inefficient regulation on the grounds that it is consistent with the societys moral
values.
Chapter2|Page72
PMN should cost less for regulators and for the parties involved. They should
cost less for regulators (on average) because cooperation between agencies
should normally reduce the amount of resources needed to investigate a merger.
They should cost less (on average) for parties because the time taken to prepare
two notifications will not normally be twice that of preparing one; although
requirements will not be identical, there will be considerable overlap. Thus, while
the cost will increase for parties, it should not do so proportionately to the number
of jurisdictions imposing regulatory requirements.
The detriment to society of allowing an anti-competitive merger to proceed
should, however, remain static for the international and national formula; this is
because, applying a global modern consumer welfare standard, the cost of a
merger to society is identical, regardless of the jurisdiction in which it is
evaluated. Although this is not the present reality, with most nations focusing on
cost to their own nationals, it is against this standard that the efficiency of
regulation should be judged.
The efficiency of the current international regulatory system may be expressed as
follows:
(W2 + Z2) (B2 + C2) = A2
W2 is the cost of allowing all anti-competitive mergers caught by the
regulatory requirements to proceed, including both the cost of anticompetitive effects on society and the cost of any litigation (to the
parties and to the taxpayers) of pursing post-merger litigation.207
Z2 is the benefit obtained by deterring potentially anti-competitive
mergers.
B2 is the cost of reviewing all mergers caught by the regulation which do
not raise competition concerns.
207
The cost in terms of societal effects should be identical to X1 but the cost of post-merger
litigation may increase if pursued in multiple jurisdictions.
Chapter2|Page73
C2 is the cost of reviewing all mergers caught by the regulation which do

raise anti-competitive concerns.208
A2 is the net benefit or cost to society of reviewing mergers.
As with domestic considerations, provided A2 is larger than zero then the cost of
regulation is less than the cost of not having the regulation and therefore should
be considered desirable. The larger the value of A2 the more efficient the
regulatory system. The aim must be to increase the value of A2 as far as
possible; thus, it may be that allowing a few smaller anti-competitive mergers to
proceed without PMN might decrease the value of W2 (because less mergers are
caught) but might simultaneously also decrease the value of B2 and C2 because
less mergers are subject to regulatory review, thereby reducing cost to
regulators, merging parties and third parties. If the decrease in the value of B2
and C2 is greater than the decrease in the value of W2 then amending the
regulation would be considered efficient and socially desirable.
It will not be possible to apply these formulae with mathematical precision. They
depend both on detailed empirical evidence, much of which does not currently
exist, as well as an appropriate means of placing economic value on the social
benefits and detriments attributable to mergers and their competition review.
While accumulation and examination of this data, if possible, could produce
valuable results, that is a task best left to economists and falls beyond the scope
of this study. However, despite the limitations of the available data, the formulae
themselves can nevertheless serve to provide a general guide to the comparative
assessment of possible options for the future regulation of transnational mergers.
208
This cost should be lower because of cooperation with other jurisdictions.
Chapter2|Page74
PART II:
NATIONAL APPROACHES TO MERGER REGULATION
There is no supra-national body or treaty governing the way in which mergers
having implications in more than one jurisdiction are to be regulated. The
regulation of mergers therefore remains subject to national laws with the result
that mergers having implications transcending national borders will often be
subjected to regulatory requirements in multiple jurisdictions.1 The extraterritorial
reach of merger laws in most jurisdictions2 means that regardless of where the
merger takes place, or the location of the merging parties, the requirements of all
jurisdictions, both substantive and procedural, potentially affected by the merger
need to be considered by firms proposing to merge. These requirements vary,
often substantially, between jurisdictions.3
Chapter 3 begins with an examination of substantive approaches to merger
regulation, including an evaluation of stated and apparent philosophies, as well
as the approach taken to merger analysis by national courts and competition
authorities. Chapter 4 will assess the various procedural aspects of
transnational merger review, including the requirement for PMN in most
countries. Chapter 5 assesses the manner in which OECD states apply their
laws to conduct occurring outside their territorial borders.
2
3
See, eg, PriceWaterhouseCoopers, 'A Tax on Mergers? Surveying the Time and Costs to
Business of Multi-jurisdictional Merger Reviews' (June 2003).
See chapter 5, below.
See, eg, Michal S Gal, Competition Policy for Small Market Economies (2003) 199.
Chapter3|Page75
Chapter 3
The substantive approach to merger regulation in
OECD countries
3.1 Introduction
An assessment of substantive merger law involves consideration both of the
relevant legislation and of the way in which that legislation is applied in practice.
In terms of the law itself, there are, broadly, two substantive tests which OECD
countries currently adopt, either exclusively or in combination, to determine
whether or not a merger should be allowed to proceed; the substantial lessening
of competition test (SLC test)4 and the market dominance test (dominance
test). A public interest test is also frequently invoked, though normally as an
integral part of one of the primary tests or as a means by which an otherwise anticompetitive or dominance-generating merger might be allowed to proceed.5 The
same test is normally applied regardless of whether the merger is national or
transnational in scope, although the practical application of the law may vary
where international factors are involved.
In their legislative form the two tests appear quite divergent; a pure dominance
test would appear to capture only those mergers which generate significant
single firm market power, while a competition analysis would appear capable of
capturing a broader range of mergers, including those likely to increase the risk of
post-merger collusion. In practice, however, the dominance test has frequently
In the EU and many other European countries, the competition based test takes the form of
a significant impediment to effective competition (SIEC) test. This will be discussed further,
below, but for purposes of broad classification it will be considered together with the SLC
tests.
No OECD country adopts a pure public interest test. In the United Kingdom, the public
interest test, which had operated since 1965, was abolished by the Enterprise Act 2002 and
replaced with a competition test.
Chapter3|Page76
been interpreted as extending beyond a pure single firm dominance analysis to

incorporate collective or joint dominance, with the result that in many countries
a dominance test may capture much of the same conduct as the SLC test.6 The
tests are then, in many cases, more closely aligned than a simple reading of the
legislation might suggest.
The broad convergence of substantive law in OECD countries is not surprising
given the similarity of the stated policy objectives for merger regulation among
member countries most commonly the protection of consumers through the
preservation of competition.7 This is the case even where these stated objectives
mask some underlying differences in philosophy.8 Broad level convergence has
also been facilitated by information exchanges and guidelines developed by
international bodies such as the ICN.
However, despite the apparent convergence of substantive law and philosophy,
differences remain in the true nature and strength of merger regulation, either
because of the adoption of different analytical approaches or because weak
enforcement practices in some countries render the laws of more limited effect.9
See section 3.4, below. This was the case in Europe prior to 2004, but notably not in
Australia which adopted a pure dominance test, requiring proof of single firm dominance.
The European Commission, the Office of Fair Trading (UK) and the Department of Justice
(US) have all claimed a stated objective of benefiting consumers through regulation of anticompetitive mergers: K J Cseres, 'The Controversies of the Consumer Welfare Standard'
(2007) 3 Competition Law Review 121, 128-9. See further Eleanor M Fox, 'Competition Law
and the Millennium Round' (1999) 2 Journal of International Economic Law 665; cf Michael
A Utton, International Competition Policy: Maintaining Open Markets in the Global Economy
(2006) 99.
For example, convergence on a consumer welfare objective, might mask differences in the
interpretation given by countries to the meaning of consumer welfare, in particular whether
it should involve a consumer or a total welfare standard.
Thus, for example, while the US and Japan have adopted almost identical merger laws, the
former is universally accepted as stronger in its regulation of anti-competitive conduct. See,
eg, Salil Mehra, Same Plant, Different Soil: Japans New Merger Guidelines (2006)
Northwestern Journal of International Law & Business <http://ssrn.com/abstract=878143> at
27 January 2010. See also Chris Noonan, The Emerging Principles of International
Competition Law (2008) 6, noting the lax enforcement of the Japanese Antimonopoly Law
in the 1980s and 1990s.
Chapter3|Page77
An analogy may be drawn with criminal law systems. Imagine two countries (A
and B) which share identical criminal legislation and associated penalties. On its
face there would appear to be consensus about what conduct should or should
not be tolerated and the penalties to be applied to any infringement. On closer
inspection, however, it may be that country A has a well manned and vigilant
police force, charged with tracking down and apprehending persons engaged in
all forms of criminal activity. Country B, on the other hand, might have an
undermanned and unmotivated police force which turns a blind eye to most
offences and investigates only the most serious of reported crimes. The practical
regulation of criminal law in both countries is, therefore, quite distinct, despite
apparent substantive similarities.
Even where countries share the same policy goals and level of enthusiasm for
preventing anti-competitive activity, the test used, or procedural or analytical
method adopted, for evaluating mergers may differ as a reflection of different
theories about how to best promote those objectives. Drawing further on the
criminal law analogy, while two countries might prohibit murder, share an equal
enthusiasm and commit the same level financial resources to preventing such
acts and may also both share the view that deterring homicide is to be preferred
over punishment alone, each country might have different ideas about how to
best achieve that deterrence. For example, Country A may consider that
deterrence is best achieved through severe methods of punishment and, as a
consequence, devote considerable resources to prosecuting crimes and
punishing them through harsh jail terms or even death. Country B, on the other
hand, may believe that deterrence is best achieved by having an increased police
presence more capable of detecting and preventing such conduct and therefore
devote more resources to that endeavour and less to prosecution and
punishment.
In relation to mergers, it is important to look beyond the substantive merger
prohibitions to the reality of their interpretation and application in order to
accurately assess the true level of convergence or divergence of merger
regulation throughout the OECD nations.
Chapter3|Page78
There is no universal consensus, among government, regulators or

commentators, regarding the general superiority of either of the key tests in
achieving the (relatively) common stated policy objectives.10 There is also
continuing debate about the role of efficiencies in achieving those policy
objectives, with the result that some countries consider efficiency gains generally
as part of their substantive analysis11 while others consider it as a more formal
defence.12 In addition, in cases of ambiguity some jurisdictions take the view
that blocking harmless mergers (type I error) is preferable to allowing an anticompetitive merger to proceed (type II error), while other countries take the
opposite view.13 All of these factors impact on the test a country chooses to
adopt and the manner of its implementation.
In addition to assessing these broad issues by reference to some sample
jurisdictions, this chapter will also assess whether different tests must be used in
different jurisdictions to achieve the same policy objective. This apparent
anomaly might result from the different economic size (smaller economies might
require greater industry concentration than large ones), industrial advancement,14
10
11
12
13
14
Indeed, it is far from clear that there is any single jurisprudentially superior test applicable to
all jurisdictions: see generally Gal, above n 3. Compare Michael E Porter, The Competitive
Advantage of Nations (1990) and Richard Whish, Substantive Analysis under the EC
Merger Regulation: Should the Dominance Test Be Replaced by Substantial Lessening of
Competition in J William Rowley (ed), International Merger Control: Prescriptions for
Convergence (2001) 102.
Arlen Duke, 'A More Efficient use of Efficiencies in Merger Authorisation Determinations'
(2007) 35 Australian Business Law Review 278, 278.
See, for example, Andreea Cosnita and Jean-Philippe Tropeano, Do Remedies Affect the
rd
Efficiency Defence? An Optimal Merger Control Analysis (Paper presented at the 3 Cresse
Conference, Athens, 4-5 July 2008).
Kathryn McMahon, 'Developing Countries and International Competition Law and Policy'
(Research Paper No 2009/11, Warwick School of Law, 2009) 17, noting that EU rules have
generally been aimed at achieving short-run competitive rivalry rather than the Chicago
School goal of economically efficient outcomes based on self-correcting markets.
It is almost certainly true that a different approach is warranted for lesser developed or
developing economies that have not yet established competition laws. For example, a
history of government established rather than competitively build companies might require a
different approach to merger assessment. Similarly, different levels of economic experience
might be relevant. Those jurisdictions with new or emerging competition laws might have
more limited experience with the relevant economic issues and, at least on an interim basis
Chapter3|Page79
geographic location (greater concentration might be tolerated in countries with

ready access to imports compared with those more geographically isolated)15 or
the desire for regional consistency, as is the case amongst most European
states. It might also be the case that different tests (or at least different
methodology in applying those tests) must be used within the same economies
for different industries,16 with hi-tech industries often singled out as in need of
special attention.17
This chapter will begin by examining the approaches taken to market definition,
followed by an examination of the two key merger tests and their practical
application in sample jurisdictions. It will proceed to analyse these approaches,
by reference to the welfare test identified in chapter 2, and propose an optimal
law for prohibiting anti-competitive mergers in OECD countries.
3.2 Market definition

Regardless of the substantive test adopted, it is necessary to define the market in
which regulators will conduct their assessment. Although market is a complex
economic concept18 and detailed discussion of market definition is beyond the
15
16
17
18
while competition law authorities develop these skills necessary for complex economic
analysis, a more simplistic if less accurate competition analysis might be warranted.
This thesis focuses on OECD countries at advanced levels of industrial advancement and
therefore detailed consideration of this issue is beyond the scope of this research.
For example, Michal S Gal, 'Extra-territorial Application of Antitrust - The Case of a Small
Economy (Israel)' (09-03, NYU Center for Law, Economics and Organization, 2009), 200201, who claims that in small economies the concern for ensuring that a sufficient number
of competitors operate in each market should be subordinated to the more compelling
necessity of serving a small population efficiently [In small economies] protection of
competition would blockade many mergers that have positive welfare effects.
See, for example, Mark A Glick and Donald Campbell, Market Definition and Concentration:
One Size Does Not Fit All (2007) 52 Antitrust Bulletin 229.
This is particularly relevant to assessment of dynamic efficiencies. See, for example,
Gregory Sidak and Hal Singer, Evaluating Market Power with Two-Sided Demand and Preemptive Offers to Dissipate Monopoly Rent: Lessons for High-Technology Industries from
the Antitrust Divisions Approval of the XM-Sirius Satellite Radio Merger (2008) 4 Journal of
Competition Law and Economics 697-751.
See, eg, Richard Whish, Competition Law (6th ed, 2009) 26.
Chapter3|Page80
scope of this study,19 an overview of the approaches adopted and assessment of

their relative merits is important.
Market definition establishes the field of inquiry for merger analysis20 and is a
necessary element of all substantive merger tests. Accurate delineation of the
market in which the parties operate is crucial21 for assessing the true potential for
a merger to produce anti-competitive effects.22 Too broadly defined the analysis
will be overly permissive and risk type II errors; too narrowly defined the analysis
will capture potentially beneficial or competitively neutral mergers, producing
type I errors.
In Australia, market is defined as a substantial market in Australia, a state,
territory or region of Australia.23 The competition regulator, the Australian
Competition and Consumer Commission (ACCC), has made it clear that a
geographically small market can still be a substantial market in appropriate
cases.24 Conversely, although it is clear that global or at least multi-
19
20
21
22
23
24
For a discussion see Caron Beaton-Wells, Proof of Antitrust Markets in Australia (2003) and
Caron Beaton-Wells, Mergers without Markets? Unilateral effects analysis in the United
States and its prospects in Australia (2006) 34 Australian Business Law Review 186 and
see generally Stephen P King, 'The 2008 ACCC Merger Guidelines: How and Why Have
They Changed?' (2009) 32 University of New South Wales Law Journal 263, 270-271.
ACCC, Merger Guidelines (November 2008) 15, para 4.2.
See Utton, above n 7, 74. Cf Christine A Varney, An Update on the Review of the
Horizontal Merger Guidelines (Speech delivered to the Horizontal Merger Guidelines
Review Projects Final Workshop, Washington DC, 26 January 2010).
Although see Joseph Farrell and Carl Shapiro, Antitrust Evaluation of Horizontal Mergers:
An Economic Alternative to Market Definition (Working Paper, 25 November 2008).
European Commission, Commission Notice on the Definition of Relevant Market for the
Purposes of Community Competition Law [1997] OJ C 372, 5, para 4: The definition of
relevant market in both its product and its geographic dimensions often has a decisive
influence on the assessment of a competition case.
Trade Practices Act 1974 (Cth) s 50(6). Note, however, that the Government has recently
announced that it proposes to remove the definition of substantial from the definition of
market in s 50(6): Craig Emerson, Government to Secure Powers to Deal with Creeping
Acquisitions (Press Release, 22 January 2010).
In the only recent Australian Federal Court case to have considered s 50, the presiding
Judge, Justice French, considered the scope of the market as defined in s 50(6). While
observing difficulties associated with determining what is required in order for a market to be
substantial (especially if it be a regional market) his Honour expressed no concluded view
Chapter3|Page81
jurisdictional markets can and do exist, the legislation does not include a
market definition extending beyond Australias territorial borders. Recent calls to
expand this definition to encompass global markets in appropriate cases have
been rejected.25 Despite the apparently restrictive definition, the ACCC does not
consider that it is prohibited from analysing a merger proposal in the context of a
geographically broader market, including a global market, provided some part of
the market is located in Australia.26 This is consistent with the view expressed in
a recent review of the legislation when rejecting calls to expand the scope of the
defined market.27
25
26
27
on this issue: Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525 at paras 377387.
Trade Practices Act Review Committee, Review of the Competition Law Provisions of the
Trade Practices Act (Commonwealth of Australia, January 2003) (Dawson Report) 60. For
examples of submissions claiming the current definition was too restrictive see: A Morgan &
J Hoggett (Institute of Public Affairs Ltd), Submission to the Review of the Competition
Provisions of the Trade Practices Act 1974, Public Submission 18, Trade Practices Act
Review 2002; UBS Warburg Australia Ltd, Submission to the Review of the Competition
Review 2002, 7 ( the definition of market should take into account the flow of capital and
labour, especially skilled labour, into and out of Australia); Maureen Brunt, Submission to
the Review of the Competition Provisions of the Trade Practices Act 1974, Public
Submission 183, Trade Practices Act Review 2002, 3 (the narrow definition of market in
s 50(6) is glaringly inappropriate to the global challenge. Brunt proposed that the
definition be amended to mean a market in relation to Australia); Business Council of
Australia, above n 361, 16 (supported the proposals made by Brunt). However, see the
recent decision in Australian Competition and Consumer Commission v Singapore Airlines
Cargo Pte Ltd [2009] FCA 510, which discusses the issue of assessing global markets
pursuant to the definition of market in the Trade Practices Act 1974 (Cth).
ACCC, Merger Guidelines (November 2008) 20, para 4.31. This view has not been
challenged in the courts, but has been the subject of some recent judicial discussion:
Australian Competition and Consumer Commission v Singapore Airlines Cargo Pte Ltd
[2009] FCA 510.
Dawson Report, above n 25, 59: the Committee rejected claims that a broader definition was
necessary to take account of global markets, observing that regard can, and is, paid to
imports when determining whether there is a substantial lessening of competition. For
discussion of the extent to which import competition is considered at the clearance stage
see generally Julie Brebner, The Relevance of Import Competition to Merger Assessment in
Australia (2002) 10 Competition and Consumer Law Journal 119. See also Allan Fels,
Mergers and Market Power (Speech delivered at the Australia-Israel Chamber of
Commerce Boardroom Lunch, Sydney, 15 March 2001).
Chapter3|Page82
Other jurisdictions, including the US and Europe, have been less restrictive in
their (stated) approach to market definition. Most countries either overtly permit a
definition of market that extends beyond domestic borders; or at the very least do
not limit market definition in such a way as to exclude the possibility of more
transnational markets.
In determining the scope of a market, the substitution28 or interchangeability29
test is usually adopted. There are a number of aspects to substitution that must
be considered, including demand, supply and potential competition. Demand
substitutability is generally considered most relevant for the process of market
definition.30 Supply substitution, while also relevant, is normally left as a matter
for assessing the level of market power and potential competition in the market is
always a matter of market power rather than market definition.31 In addition to
product or service substitution, the geographic boundaries of the relevant market
are determined by a substitution analysis.32
The hypothetical monopolist test (or HMT - also known as SSNIP test for
Small but Significant Non-Transitory Increase in Price)33 is widely used to
determine which products, services or geographic locals are substitutable for that
of the merged entity.34 Whish explains the SSNIP test with the following useful
example:
28
29
30
31
32
33
34
ACCC, Merger Guidelines (November 2008) para 4.7; Trade Practices Act 1974 (Cth) s 4E.
See also King, The 2008 Merger Guidelines, above n 19, 271-273.
See Whish, Competition Law, above n 18, 28.
See EU Notice on the definition of relevant market for the purposes of Community
Competition Law OJ [1997] C372 pp 5-13, para 13. See also Whish, Competition Law,
above n 18, 29.
Whish, Competition Law, above n 18, 29.
ACCC, Merger Guidelines (November 2008) 15, para 4.8 15.
See generally Whish, Competition Law, above n 18, 30
ACCC, Merger Guidelines (November 2008) paras 4.19 - 4.22. See also Department of
Justice and the Federal Trade Commission (US), Horizontal Merger Guidelines (issued
1992; revised 8 April 1997) 1.0; European Commission, Commission Notice on the
Definition of Relevant Market for the Purposes of Community Competition Law [1997] OJ C
372, 5 para 16; Office of Fair Trading (UK), Market Definition (OFT 403, December 2004) 4-
Chapter3|Page83
The so-called SSNIP test, first deployed by the Department of Justice and the
Federal Trade Commission under US competition law when analyzing horizontal
mergers, works as follows: suppose that a producer of a product for example
widget were to introduce a Small but Significant Non-transitory Increase in
Price. In those circumstances, would enough customers be inclined to switch
their purchases to other makes of widgets, or indeed even to blodgets, to make
the price rise unprofitable? If the answer is yes, this would suggest that the
market is at least as wide as widgets generally and includes blodgets as well.
The same test can be applied to the delineation of the geographic market: if the
price of widgets were to be raised in France by a small but significant amount,
would customers switch to suppliers in Germany? If a firm could raise its price by
a significant amount and retain its customers, this would mean that the market
would be worth monopolizing: prices could be raised profitably, since there would
be no competitive constraint. For this reason, the SSNIP test is also and more
catchily referred to sometimes as the hypothetical monopolist test.
Regulators rely heavily on current evidence from market participants35 for both
qualitative and quantitative information.36 In the US, for example, Agencies
routinely solicit information from customers to determine their ability and
willingness to substitute in the event of a price increase. 37 In the majority of
cases non-economic evidence from customers and business documents38 is
35
36
37
38
6, New Zealand Commerce Commission, Mergers and Acquisitions Guidelines (2005) Part
3, Competition Bureau (Canada), Merger Enforcement Guidelines (2004) Part 3. The
SNNIP test is explained in the Department of Justice and Federal Trade Commission (US),
Commentary on the Horizontal Merger Guidelines (2006) 5: [A market is] a product or group
of products and a geographic area in which it is produced or sold such that a hypothetical
profit-maximizing firm, not subject to price regulation, that was the only present and future
producer or seller of those products in that area likely would impose at least a small but
significant and nontransitory increase in price, assuming the terms of sale of all other
products are held constant. See also Stephen P King, 'The Role of the Hypothetical
Monopolist Test in Market Definition Under the Merger Guidelines' (2006) 14 Competition
and Consumer Law Journal 89.
ACCC, Merger Guidelines (November 2008) 16 para 4.9.
See generally Beaton-Wells, Proof of Antitrust Markets in Australia, above n 19.
Department of Justice and Federal Trade Commission (US), Commentary on the Horizontal
Merger Guidelines (2006) 9. The US Merger Guidelines note that market definition focuses
solely on demand substitution factors i.e., possible consumer responses: Department of
Justice and the Federal Trade Commission (US), Horizontal Merger Guidelines (issued
1992; revised 8 April 1997), 4, 1.0.
Federal Trade Commission and United States Department of Justice, Commentary on the
Horizontal Merger Guidelines (2006) 9.
Chapter3|Page84
relied upon to determine the market. The position is similar in the EU,39 Australia
and other jurisdictions applying the HMT.
While the test is conceptually simple the market comprising those products or
services that can act as substitutes for the product or service offered by the
merging parties40 the application of the test can become extremely complex in
practice,41 requiring substantial amounts of data, and can lead to divergent
results based on the relevant authoritys interpretation of the data provided. The
data intensive nature of the HMT means that in practice, to avoid undue burden
to parties and authorities, it is frequently invoked as an intellectual aid to focus
the exercise42 of qualitative analysis, rather than as a strict mechanism for
defining the market.43
3.3 Substantial lessening of competition

In the context of substantive merger law, key debate has centered on whether to
adopt a substantial lessening of competition44 or a market dominance45 test or
a combination of the two.46 A pure or hybrid47 SLC test has now been adopted by
39
40
41
42
43
44
45
46
Whish, Competition Law, above n 18, 33-34 and European Commission, Commission Notice
on the Definition of Relevant Market for the Purposes of Community Competition Law [1997]
OJ C 372, 5.
For example, the ACCC will look at the extent to which a party would switch from one
product to another in response to a change in the relative price, service or quality of two
products: ACCC, Merger Guidelines (November 2008) 16 para 4.12.
See Seven Network Limited v News Limited [2007] FCA 1062 at 1786.
ACCC, Merger Guidelines (November 2008) 18 para 4.22.
OECD countries currently applying this test (without reference to a dominance requirement)
are: Australia, Canada (which also incorporates an efficiency defence), Greece, Ireland,
Japan, Mexico, New Zealand, Spain, Sweden the United Kingdom and the United States of
America.
OECD countries applying a dominance test include Finland, Germany, Hungary, Iceland, the
Slovak Republic and Switzerland (which also has a pro-competition defence).
The European Unions merger regulation now prohibits mergers which significantly impede
effective competition in the EU, particularly by creating or strengthening a position of
dominance. EU member states which have adopted this dual reference include Czech
Republic, Denmark, Italy, Luxembourg, Netherlands, Poland and Portugal. Turkey has also
adopted this test.
Chapter3|Page85
the majority of OECD countries, including Australia, Canada, New Zealand,48

France, Greece, Ireland, Japan, Mexico, South Africa, Spain, the UK49 and the
US.50 In 2004 the EU also converted51 from a test focused on market dominance
to one emphasizing competitive effect and a number of EU member states have
followed suite. These include Denmark, the Czech Republic, France, Hungary,52
Italy, Netherlands, Poland, Portugal and Sweden. Turkey, which has aspirations
for EU membership, has also adopted a test mirroring that of the EU.
This section discusses the nature of the SLC test adopted, and the analytical
approach taken to its application, in three different economies: Australia, the EU
and the US. Australia is selected as an example of a small and (relatively)
isolated economy and one that adopts a pure SLC test that is, one without
any reference to market dominance in conjunction with, or in addition to, the SLC
test and as a jurisdiction which has also experimented with a dominance test.
The EU is selected as a large economy and one whose law is replicated by a
number of other OECD states. It also represents an economy which has recently
converted from a test focusing on market dominance to one emphasizing
competitive effects. The US is selected as an example of another large economy
and as the country responsible for regulating the greatest volume of merger
activity.53 It is also the nation with the longest experience in regulating anti-
47
48
49
50
51
52
53
Hybrid in this sense refers to jurisdictions which apply an SLC test in addition to another
test, most commonly dominance. For example, the US prohibits mergers which SLC or tend
to create a monopoly.
Commerce Act 1986 (NZ) Parts 3 and 5. New Zealand applied a dominance test until 2001,
when it was changed to bring it into line with Australias merger law.
Enterprise Act 2002 (UK) Part 3, s 22(1).
Clayton Antitrust Act 1914, 15 USC 18.
Council Regulation (EC) No 139/2004 of 20 January 2004 on the Control of Concentrations
Between Undertakings [2004] OJ L 24.
Hungary converted from a dominance test to the SIEC test on 1 June 2009.
For example, between 1999-2008 the DOJ(AD) received 22,919 pre-merger notifications
pursuant to the HSR Act, an average of 2,292 a year (although over the last 5 years, as a
result of increased notification thresholds the average number of notifications per year to the
DOJ(AD) has dropped to 1,755): Department of Justice, Antitrust Division Workload
Statistics FY 1999-2008 <http://www.justice.gov/atr/public/workstats.pdf> at 28 January
2010, 2.
Chapter3|Page86
competitive mergers and has influenced the development of many of the newer
merger regimes.
3.3.1 Australia
The legislation
The Trade Practices Act 1974 (TPA) contains the substantive prohibition on anticompetitive mergers in Australia54 as well as facility for their clearance and
authorization.55 Guidelines issued by the ACCC detail the approach it will take to
assessing notified mergers.56 Although having no legal force, in practice they
dictate the circumstances under which mergers will be blocked, modified57 or
proceed unscathed.
When the TPA was introduced in 1974 it prohibited mergers which substantially
lessened competition. Criticism of this test and, in particular, a desire to facilitate
the development of economies of scale in Australian industry, and to further its
international competitiveness,58 led the legislature to replace it with a dominance
test in 1977.59 Under this test, mergers that created or substantially strengthened
a position of control or dominance in a substantial market were prohibited. The
dominance test was modified in 1986 to prohibit acquisitions only if they would
result in the corporation being, or being likely to be, in a position to dominate a
market for goods or services or if they would substantially strengthen an
54
55
56
57
58
59
The key merger provisions are contained in ss 50 and 50A of the Trade Practices Act 1974
(Cth).
See chapter 4 at section 4.3.1.
ACCC, Merger Guidelines (November 2008). These Guidelines replaced the ACCC, Merger
Guidelines (June 1999).
Referred to as merger remedies in many jurisdictions having compulsory notification
systems: see generally, Stephen Davies and Bruce Lyons, Mergers and Merger Remedies
in the EU: Assessing the Consequences for Competition (2007).
Commonwealth of Australia, Mergers, Monopolies and Acquisitions: Adequacy of Existing
Legislative Controls (Senate Standing Committee on Legal and Constitutional Affairs,
Canberra, 1991) (Cooney Report) 48, para 3.111.
Trade Practices Legislation Amendment Act 1977 (Cth).
Chapter3|Page87
existing position of dominance.60 The dominance test survived61 until 1992,62

when recommendations from the Cooney Committee63 led to the re-introduced
the SLC test. The Committee was heavily influenced by Michael Porters
research suggesting that, contrary to what had been believed in 1977 when the
dominance test was introduced, strong domestic competition was more likely to
enhance the competitiveness of Australian industry than one which permitted the
establishment of national champions, even in a small economy such as
Australia.64
The most recent inquiry into Australias competition laws, which considered
various proposals for merger reform, including whether the SLC test should be
retained or replaced with a market dominance test,65 or repealed in its entirety,66
60
61
62
63
64
65
Trade Practices (Transfer of Market Dominance) Amendment Act 1986 (Cth).

In 1989 the Griffiths Committee recommended against changing back to a SLC test:
Commonwealth of Australia, Mergers, Takeovers and Monopolies: Profiting from
Competition (House of Representatives Standing Committee on Legal and Constitutional
Affairs, Canberra, May 1989) (Griffiths Report) recommendation 63. There was, however,
some support for a return to the SLC test during this inquiry: see, for example, Evidence to
Standing Committee on Legal and Constitutional Affairs, Sub-Committee Workshop on
Mergers, Takeovers and Monopolies, 24 October 1988 (Philip Clarke) 22: I am of the
opinion that section 50 is currently too tolerant of mergers. the dominance test would
allow mergers which would result in there being a substantial lessening of competition. I
would advocate that a harsher test be applied .
Trade Practices Legislation Amendment Act 1992 (Cth).
The Cooney Committee recommended a return to the SLC test and this recommendation
was accepted by the Government and the SLC test was re-introduced into the Act in 1993:
Cooney Report, above n 58, chapter 3. See also Warren Pengilley, The Ten Most
Disastrous Decisions Made Relating to the Trade Practices Act (2002) 30 Australian
Business Law Review 331, 349-352.
Cooney Report, above n 58, 48, para 3.112.
Several submissions called for a return to the market dominance test which applied in
Australia from 1977-1993 (United Energy, Submission to the Review of the Competition
Review 2002, 3; Duke Energy Australia Pty Ltd, Submission to the Review of the
Competition Provisions of the Trade Practices Act 1974, Public Submission 26, Trade
Practices Act Review 2002, 2-3: Warren Pengilley, Submission to the Review of the
Practices Act Review 2002; Morgan and Hoggett, above n 25; Australian Industry Group,
Submission to the Review of the Competition Provisions of the Trade Practices Act 1974,
Public Submission 109, Trade Practices Act Review 2002, 48 (noting that it might be argued
that the dominance test is a more appropriate test for a market and markets as small as
those in Australia)). See also Fels, Mergers and Market Power, above n 27.
Chapter3|Page88
was the Dawson Review.67 After relatively brief consideration, the Dawson
Committee recommended that the merger test should not be altered and this
recommendation was accepted by the Government. Consequently, the SLC test
adopted in 1992 remains in force today and is a pure SLC test, in the sense that
the prohibition contains no reference to dominance. It is set out in section 50 of
the TPA in the following terms:
Section 50
(1) A corporation must not directly or indirectly:
(a) acquire shares in the capital of a body corporate; or
(b) acquire any assets of a person;
if the acquisition would have the effect, or be likely to have the effect, of
substantially lessening competition in a market.
A few years after the re-introduction of the SLC test in Australia, an objects
clause was inserted into the TPA. Section 2 of the TPA now provides that the
object of this Act is to enhance the welfare of Australians through the promotion
of competition and fair trading and provision for consumer protection.68 This
objects clause is drafted broadly to encompass all competition, consumer
protection and other fair trading provisions contained in the TPA; it is, however,
generally accepted that, with respect to the competition law provisions, the
objects clause should be interpreted as meaning the object of enhancing the
welfare of Australians through the promotion competition per se,69 even if there
66
67
68
69
Ron Gilbert, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 2, Trade Practices Act Review 2002, 9. Sensibly, no serious
consideration seems to have been given to this radical proposal.
Dawson Report, above n 25.
Trade Practices Act 1974 (Cth) s 2. This section was added to the Act in 1995 by the
Competition Policy Reform Act 1995 (Cth) s 3. Although welfare of Australians is listed as
the primary objective, whether welfare is directed toward economic, social or other welfare
goals remains unclear.
See, for example, Cooney Report, above n 58, 48 para 3.109: The philosophy underlying
Part IV of the Trade Practices Act is the protection and enhancement of competition.
Chapter3|Page89
may be broader policy goals underlying this objective. This was the view taken
by the Hilmer Committee when recommending the inclusion of the objects clause.
Competition laws, it recommended, should be designed to:
Protect the competitive process per se [because] the effective functioning of the
competitive process, and hence economic efficiency and the welfare of the
community as a whole, is the primary objective. 70
More recently, the Dawson Committee expressed the view that the merger laws
existed to serve the object of enhancing the welfare of Australians through
increasing economic efficiency71 and that the underlying assumption of the
objects provision of the TPA72 is that competition promotes efficiency, which in
turn enhances public welfare.73 Thus, according to the Dawson Committee, the
mechanism by which welfare is enhanced is efficiency, with competition used as
a proxy for determining which mergers are likely to generate those efficiencies.74
This suggests a narrower welfare focus than the Hilmer Committee had intended.
The Hilmer Committee view stressed the importance of competition in generating
economic efficiency, but also in enhancing the welfare of Australians more
generally; the Dawson view suggests that it is only economic efficiency which
merger laws should seek to achieve and that the preferred method of achieving
this goal involves prohibiting those mergers which SLC. Although the Dawson
Review was concluded more recently than the Hilmer Review, the view taken by
70
71
72
73
74
Frederick G Hilmer, Mark Rayner and Geoffrey Taperell, National Competition Policy
(Report by the Independent Committee of Inquiry, Commonwealth of Australia, 25 August
1993) (Hilmer Report) 6.
Dawson Report, above n 25, 8.
Trade Practices Act 1974 (Cth) s 2.
Dawson Report, above n 25, 8. The committee concluded no economic efficiency test
should be added to s 50, not because it was theoretically suspect, but because of the
complexity it would add to the process and the increased discretion with which it would vest
the competition regulator.
In this respect the Committee also observed that efficiency and other considerations might
be capable of broader consideration under Australias authorization process where the
competition test may not provide a suitable guide (Dawson Report, above n 25, 8),
suggesting competition is not an end in itself to promoting the welfare of Australians, but
merely a consideration which may outranked by other considerations, such as economic
efficiency.
Chapter3|Page90
the Hilmer Committee would appear more consistent with the objects clause of
the Act and there has been no change to the legislation, ACCC Guidelines or
government rhetoric regarding merger laws, which continue to place clear
emphasis on promoting competition per se.75
Regardless of the view taken toward the immediate object of the provision, where
it can be demonstrated that the welfare of Australians would be better served by
allowing a merger, despite its potentially anti-competitive effects, the TPA
provides a (relatively) unique mechanism76 for authorizing that conduct.77
The authorization process in Australia allows certain mergers to proceed, despite
a SLC, if the parties can demonstrate that the proposed merger would result in
such benefit to the public it should be allowed to take place.78 This process
provides some recognition that competition, while ordinarily advancing the
(Australian) public interest, may, in a limited range of circumstances, not best
serve this interest. In defining the public, for purposes of authorization
applications, the Australian Competition Tribunal (ACT) has endorsed a total
welfare approach rather than one focussing on the consumer public,79 despite
the ACCCs push for a consumer welfare approach.80 Although the specter of
75
76
77
78
79
80
ACCC, Merger Guidelines (November 2008) para 7.63.

Although a number of other jurisdictions provide for public benefit or national interest
exemptions (for example, Finland and Switzerland), they are often only in extraordinary
cases and involve a less formal mechanism. Some countries also permit the government, or
relevant minister, to approve an otherwise unlawful merger (for example, Germany) and
some other jurisdictions indirectly incorporate a form of public benefit test into their
substantive merger analysis. The existence of a formal process for authorizing otherwise
anti-competitive mergers is, however, relatively unique. See, eg, Dawson Report, above n
25, 58.
Trade Practices Act 1974 (Cth) s 97AT.
Trade Practices Act 1974 (Cth) s 97AZH. The Australian Competition Tribunal must not
grant authorisation unless satisfied in all the circumstances that the proposed acquisition
would result, or be likely to result, in such a benefit to the public that the acquisition should
be allowed to take place.
See discussion in Joshua S Gans, Reconsidering the Public Benefit Test in Merger
Analysis: The Role of Pass Through (2006) 34 Australian Business Law Review 28, 28.
See discussion in Gans, above n 79. Gans also argues for a consumer welfare approach to
be taken to public benefits assessments, based on the assumption that by placing weight on
the pass through benefits to consumes, total welfare will also be maximised. Compare
Chapter3|Page91
public benefits open for consideration are not limited, and the ACT has held that
the term public benefit should be given its widest possible meaning,81 the set of
benefits that must be considered, combined with an objects clause that refers to
the welfare of Australians, suggests public is intended to mean Australian
public and not more global welfare benefits. Specifically, s 90(9A) requires the
ACCC to have regard to whether the merger would result in:
a significant increase in exports;

a significant substitution of domestic products for imported goods; and
all other relevant matters that relate to the international competitiveness of any
Australian industry (emphasis added).82
It is clear, therefore, that the public interest is couched in nationalistic terms; if

an anti-competitive merger was to have a counterveiling public benefit in another
country, but not in Australia, it will not satisfy the authorization criteria. The
authorization mechanism is, however, rarely used for mergers83 and even more
rarely successful.84 It is only available prior to the consummation of a merger85
81
82
83
84
Paul Hughes, Comments on Professor Joshua Ganss Presentation Reconsidering the

Public Benefit Test (2006) 34 Australian Business Law Review 49 and Stephen P King,
The Public Benefit Standard for Merger Authorisations (2006) 34 Australian Business Law
Review 38.
Re Queensland Co-operative Milling Association Ltd & Defiance Holdings Ltd (1976) ATPR
40-012 at p 17,242 (QCMA). See also Dawson Report, above n 25, 58.
Trade Practices Act 1974 (Cth) s 97AZH(2). In a recent review a number of submissions
called for a more detailed list of public benefits and/or a clearer indication of what else might
be considered a public benefit (ExxonMobil, Submission to the Review of the Competition
Review 2002, 6; Spier Consulting Pty Ltd, Submission to the Review of the Competition
Review 2002,15; Commonwealth Bank, Submission to the Review of the Competition
Review 2002, 9; Department of Transport and Regional Services, Submission to the Review
of the Competition Provisions of the Trade Practices Act 1974, Public Submission 189,
Trade Practices Act Review 2002, 9). On the basis that the Tribunal has applied the public
benefit test widely, the Dawson Committee rejected the call for additional public benefit
factors, believing there would not be any real benefit to be gained from any such change:
Only 12 applications were made between 1993 and 2002.
It is suggested that there are several reasons for this (1) very few mergers raise competition
concerns (2) many of the mergers that do raise competition concerns are resolved by the
provision of enforceable undertakings and (3) of the remaining mergers, it will be rare that
Chapter3|Page92
and may be made subject to conditions.86 In 2007, power to grant merger

authorization was removed from the ACCC and vested in the ACT.87 Although
this was designed in part to provide a more efficient and effective mechanism
for merger authorization applications,88 there have been no applications for
merger authorization since this change.
While some have called for public benefits to be incorporated at the clearance
stage89 or combined with the existing competition test,90 these calls have been
rejected by recent reviews into the legislation.
85
86
87
88
89
90
parties can demonstrate a public benefit where a proposed merger will substantially lessen
competition.
Trade Practices Act 1974 (Cth) s 95AZH(3).
Trade Practices Act 1974 (Cth) s 95AZJ.
Until recently the ACCC was the body responsible for determining authorization claims, with
an appeal mechanism available to the Australian Competition Tribunal (ACT). On 1
January 2007 (as a result of the passage of the Trade Practices Legislation Amendment Act
(No 1) 2006) this power was removed from the ACCC and vested directly with the ACT, with
no mechanism for appeal.
The bulk of the submissions to the Dawson Review complained that the existing
authorisation process was too time-consuming, which made it commercially unrealistic for
parties to time-sensitive mergers to make an application and that, therefore, it needed to be
more efficient: Shell Australia, Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 15, Trade Practices Act Review 2002, 4;
BP Australia, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 47, Trade Practices Act Review 2002, 4; Commonwealth Bank,
above n 82, 10-11; Australian Industry Group, above n 65, 49; Business Law Committee of
the Law Council of Australia, Submission to the Review of the Competition Provisions of the
Trade Practices Act 1974, Public Submission 138, Trade Practices Act Review 2002, 54 &
67-68. The Dawson Committee accepted that the current authorisation process was
commercially unrealistic, based primarily on the observation that only five applications for
authorisation had been made in the previous eight years and recommended that
applications for authorisation be made directly to the Tribunal who would have a time limit of
3 months to determine an application: Dawson Report, above n 25, 70, recommendation
2.3.1.
See, eg, SFE Corporation Limited, Submission to the Review of the Competition Provisions
of the Trade Practices Act 1974, Public Submission 92, Trade Practices Act Review 2002,
13 and International Banks and Securities Association of Australia (IBSA), Submission to the
Review of the Competition Provisions of the Trade Practices Act 1974, Public Submission
93, Trade Practices Act Review 2002, 1.
See IBSA, above n 89, 1; CSR Limited, Submission to the Review of the Competition
Review 2002, 1; Australian Industry Group, above n 65, 12; UBS Warburg, above n 25, 7;
Freehills, Submission to the Review of the Competition Provisions of the Trade Practices Act
Chapter3|Page93
Analytical Approach
In Australia, the Federal Court91 is the only body having the power to prevent a
merger proceeding. Although judicial, not administrative, authority is needed to
prevent a merger, the ACCC does have the power to administratively enforce
undertakings merger remedies and has the power to clear a merger,
preventing it from being subsequently challenged in the courts. It is, however,
only very infrequently that the legality of a merger is considered by the courts. In
practice, parties voluntarily notify the ACCC in advance of proposed mergers and
make a decision to proceed (or not to proceed) based on the ACCCs informal
assessment. Consequently, while not forming part of the substantive law, the
analytical guidelines adopted by the ACCC for merger assessment play a key
role in defining the scope of Australias merger laws. Parties are also assisted by
an increasing body of administrative precedent, developed through published
decisions of the ACCC as part of its informal clearance process.92
91
92
1974, Public Submission 135, Trade Practices Act Review 2002, 3; Business Law
Committee of the Law Council of Australia, above n 88, 54; Victorian Government,
Submission to the Review of the Competition Provisions of the Trade Practices Act 1974, A
Competitive and Fair Marketplace, Public Submission 148, Trade Practices Act Review
2002, 17; Allens Arthur Robinson, Submission to the Review of the Competition Provisions
6; Minerals Council of Australia, Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 178, Trade Practices Act Review 2002, 45; Securities Institute of Australia, Submission to the Review of the Competition Provisions
2. Many have, however, opposed this proposal: Allan Fels, Persistent Myths Ignore the
Reality of ACCC Action, Australian Financial Review, 21 November 2002, Australian
Consumers Association (ACA), Submission to the Review of the Competition Provisions of
P Armitage, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 128, Trade Practices Act Review 2002, 1; Canberra Consumer
Inc, Submission to the Review of the Competition Provisions of the Trade Practices Act
1974, Public Submission 184, Trade Practices Act Review 2002, 2.
The High Court has the authority to hear an appeal from the Federal Court.
See chapter 4, below.
Chapter3|Page94
The ACCC has recently adopted new Merger Guidelines93 which signal a shift in
the analytical approach it will adopt in merger review.94 In particular, they place
an increased emphasis on the competitive theories of harm and the effect of
constraints95 than did the previous guidelines.
There are three key aspects to Australias substantive merger law.
First, the competition must be substantially lessened, so that although horizontal
mergers almost inevitably reduce competition through the removal of an existing
competitor, even if only marginally,96 they will nevertheless be permitted where
their anti-competitive impact is small enough that it is unlikely to result in any
serious reduction in consumer welfare. Competition has been judicially defined
in Australia as an expression of rivalrous market behaviour and is not merely a
snapshot view of a participants behaviour at a particular time.97 The focus will
be whether the merger will result in a meaningful or relevant98 lessening of
competition, mid-to-long term, and not short term effects readily corrected by
market processes.99 Consequently, assessment of temporal factors, including
dynamic efficiencies, is considered important.
93
94
95
96
97
98
99
ACCC, Merger Guidelines (November 2008). These replace the ACCC, Merger Guidelines
(June 1999).
This shift appears more pronounced on paper than in practice. There is a notable shift from
the approach represented by ACCC, Merger Guidelines (June 1999), but the 2008
Guidelines better reflect the approach already being undertaken by the ACCC in practice:
ACCC, Merger Guidelines (November 2008) 1. See generally King, The 2008 Merger
Guidelines, above n 19, 263.
ACCC, Merger Guidelines (November 2008) 1.
Arguably exceptions to this general position arise where, for example, two small firms
merge, reducing the number of competitors but increasing competition with an existing,
larger, competitor, with whom neither of the smaller competitors could previously effectively
compete.
Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525 paras 349-350, per Justice
French, who adopted the view that had earlier been expressed by the Tribunal in Re
Queensland Co-operative Milling Association Ltd & Defiance Holdings Ltd (1976) ATPR 40012.
Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525, para 351 per French J.
Chapter3|Page95
Second, the legislation directs attention to the single merger under investigation;
it does not permit assessment of the cumulative effects of a series of mergers
unless, as a result of those mergers, the single merger under review can be said
to SLC.100
Finally, the legislation sets out number of factors that must be taken into
consideration as part of the competition assessment, including import
competition, barriers to entry and the dynamic characteristis of the market.101
When assessing whether competition has been (or will be) substantially lessened
by reference to these and other relevant factors, the counterfactual with or
without test is applied; that is, the future state of the relevant market with and
100
101
The inability of the existing legislation to capture creeping acquisitions that is, the situation
where no individual merger in a particular market substantially lessens competition, but a
number of small mergers, over time, have the same effect - has led to vigorous debate in
Australia in recent years and the Government has announced that it will legislate for
creeping acquisitions. During the last major review of Australias competition laws, several
submissions argued that the law should be changed to deal directly with creeping
acquisitions. See, eg, Independent Paper Group, Submission to the Review of the
Practices Act Review 2002, 2; Small Business Development Corporation (WA), Submission
to the Review of the Competition Provisions of the Trade Practices Act 1974, Public
Submission 84, Trade Practices Act Review 2002, 5; Association of Consulting Engineers
Australia, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 89, Trade Practices Act Review 2002, 10; Fair Trading
Coalition (A Coalition of Small Business for Trade Practices Act Reform), Submission to the
98, Trade Practices Act Review 2002, 37; National Association of Retail Grocers of Australia
(NARGA), Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 126, Trade Practices Act Review 2002, 9; National Association
of Retail Grocers of Australia, Supplementary Submission 2 to the Review of the
Practices Act Review 2002, 7; Victorian Government, above n 90, 3.
Trade Practices Act 1974 (Cth) s 50(3): the factors that must be considered are (a) the
actual and potential level of import competition in the market; (b) the height of barriers to
entry to the market; (c) the level of concentration in the market; (d) the degree of
countervailing power in the market; (e) the likelihood that the acquisition would result in the
acquirer being able to significantly and sustainably increase prices or profit margins; (f) the
extent to which substitutes are available in the market or are likely to be available in the
market; (g) the dynamic characteristics of the market, including growth, innovation and
product differentiation; (h) the likelihood that the acquisition would result in the removal from
the market of a vigorous and effective competitor; (i) the nature and extent of vertical
integration in the market.
Chapter3|Page96
without the proposed acquisition102 will be evaluated. The ACCC will begin its
evaluation by assessing current and anticipated levels of market concentration.103
This involves application of the Herfindahl-Hirschman Index (HHI) to assess
market concentration, calculated by summing the squares of the market shares of
each supplier; the higher the HHI the greater the market concentration. The
ACCC considers markets to be concentrated for purposes of notification when a
small number of firms accounts for a large proportion of sales, output or capacity,
giving a HHI of greater than 2000.104 Thus, for example, if the market comprises
two firms, one with a market share of 70% and one with 30% the HHI will be 702
+ 302 = 5,800, suggesting a very concentrated market. Conversely, if the market
comprises twenty firms, each of which has 5% of the market share the HHI will be
52 x 20 = 500, suggesting that the market is competitive.
Although the ACCC will be guided by the HHI of the market, the HHI will not
result in any automatic presumptions about whether or not the merger will raise
concerns, but will help to determine whether a merger is likely to result in
unilateral and/or co-ordinated effects.105 This represents a departure from the
approach taken by the ACCC in their previous (1999) Guidelines, which focused
more directly on market share (as opposed to concentration) and created a safe
harbour for mergers in which neither the top four firms held a combined market
share of 75% or more or the single merged firm held a post-merger market share
of 40% or more.106
Following assessment of market share and concentration the ACCC will proceed
to evaluate other key market factors as required by s 50(3) of the TPA, starting
102
103
104
105
106
ACCC, Merger Guidelines (November 2008) 36-38. Assessment of market concentration is
also a requirement of s 50(3)(c) of the Trade Practices Act 1974 (Cth).
ACCC, Merger Guidelines (November 2008) 48.
ACCC, Merger Guidelines (November 2008) chapter 6.
ACCC, Merger Guidelines (June 1999) para 5.95. A similar progression occurred in the
United States which adopted at CR4-type concentration assessment prior to switching to the
HHI test in 1992. See also King, The 2008 Merger Guidelines, above n 19, 266-269.
Chapter3|Page97
with barriers to entry.107 Barriers to entry will generally be considered to provide

effective post-merger constraint if actual or threatened entry would occur in an
appropriate time to deter or defeat any non-transitory exercise of increased
market power by the merged firm.108 The presumptive starting point for an
appropriate time is two years.109
Import competition will then be assessed. In the past, threat of imports have
frequently been accepted by the ACCC as an effective competitive constraint,
justifying approval of a proposed merger.110
The availability of substitutes111 to the product or service of the merged entity is
the next consideration. Unlike the HMT test used for purposes of market
delineation (which focuses on whether products involved are close substitutes
with key emphasis on demand substitution) at this stage of the analysis the
ACCC will consider the relative degree of substitution or rivalry between the
different products or services.112 Customer and brand loyalty will be key factors.
The analysis will incorporate a greater assessment of supply side substitution
and potential substitutes. Barriers to expansion are also considered in this
context.113
Any countervailing power having the potential to inhibit the merged firms ability to
wield its increased market power must also be considered.114 The ACCC will
107
108
109
110
111
112
113
114
ACCC, Merger Guidelines (November 2008). See also Australian Gas Light Company v
ACCC (No 3) [2003] FCA 1525, para 354 per French J.
See Brebner, above n 27.
Trade Practices Act 1974 (Cth), s 50(3)(f).
ACCC, Merger Guidelines (November 2008) 44-45. Product B might be relatively close
substitutes for the merged firms product A, but if the producer of product B has no capacity
to expand in response to increased prices or other exercises of market power, it will be
much less likely to act as a competitive constraint and alleviate any risk of a lessening of
competition.
Trade Practices Act 1974 (Cth), s 50(3)(d). See also Australian Gas Light Company v
ACCC (No 3) [2003] FCA 1525 at para 354. In relation to countervailing power French J
Chapter3|Page98
consider not only the possibility of a firm with countervailing power switching
suppliers, but also the power they may have to vertically integrate, or sponsor
new entry whether domestic or foreign.115
The dynamic characteristics of the market116 are also assessed, ensuring the
ACCC appropriately considers how the relevant market is likely to evolve in the
future.117 This may include predicted growth, innovation or technological
developments.118 Rapid growth or highly innovative markets are considered less
likely to facilitate the use of any merger-generated market power than would be
the case in relatively static markets.
The likelihood of the proposed merger removing a vigorous and effective
competitor from the market is the next mandatory consideration.119 Should the
merger have this result it would be considered more likely to SLC than a merger
with a less innovative competitor. Factors the ACCC consider when classifying a
firm as vigorous and effective include past pricing behaviour, levels of service,
innovation and evidence of leadership in non-price competition.120 This criteria is
considered most relevant where barriers to entry are high or where there is no
meaningful export competition.121 It is in this context that the issue of failing
firms might also be considered.122
115
116
117
118
119
120
121
122
noted that, especially where essential facilities are concerned (as was the case here), power
held by customers may be exercised through price sensitive regulators or political
mechanisms as well as direct economic power.
Trade Practices Act 1974 (Cth), s 50(3)(g).
Trade Practices Act 1974 (Cth), s 50(3)(h).
Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525 at para 354 per Justice
French.
See, eg, Australian Competition and Consumer Commission, ACCC Not to Oppose
Proposed Acquisition of Hans Continental Smallgoods by Primo (Press Release NR 032/09,
18 February 2009).
Chapter3|Page99
The level of vertical integration, if any, will also be evaluated123 for the effect it
may have on competition, both horizontally and vertically. Provided that the postmerger vertical supply chain remains competitive it will be unlikely that the
vertical integration involved will cause the merger to be classified as anticompetitive.124
The ACCC will then assess more generally the likely ability of the merged firm to
increase prices or profit margins.125 The ACCC considers that a post-merger
ability to significantly and sustainably increase prices126 from the pre-merger
level is suggestive of a likely SLC. Although profits are normally considered in
this analysis, it is clear that the ACCC will not consider increased profits, alone,
as indicative of a SLC.127
Finally, the ACCC must consider all other factors that might indicate that the
merger would have the effect of SLC; the list of relevant factors is nonexhaustive, but one of the most relevant additional factors will be the possibility
that the merger will generate efficiency gains.128
Efficiencies
Recent reviews of Australias competition laws have placed importance on
efficiencies as an appropriate even predominant goal of competition policy.129
123
124
125
126
127
128
129
Trade Practices Act 1974 (Cth), s 50(3)(i).

Trade Practices Act 1974 (Cth), s 50(3)(e).
Price in this context normally includes profits. ACCC, Merger Guidelines (November 2008)
50, para 7.60.
The ACCC will also consider the potential effect of exports on competition in the domestic
market and the impact of federal or state regulation: ACCC, Merger Guidelines (November
2008) 52-53, paras 7.67-7.70.
Although there is no explicit reference to efficiencies in the object clause of the Act, the
Hilmer Committee Report (as a result of which the objects provision of the TPA was
inserted) observed that promoting competition is generally consistent with maximizing
economic efficiency (at 4-5) and that efficiency was a fundamental objective of competition
policy because of the role it plays in enhancing community welfare (at 3) (emphasis
added): Hilmer Report, above n 70.
Chapter3|Page100
There is no direct reference to efficiencies in the merger prohibition or in the

factors to be considered when determining whether a merger will SLC and there
is no explicit efficiencies defence. As a result, absent an authorization
application, efficiencies are left to be considered as one of many factors relevant
to determining whether a proposed merger would meet the SLC threshold. To
assist, the ACCC Merger Guidelines make clear that while a reduction in
marginal costs post-merger may increase competitive tension130 the focus of a s
50 analysis is the effect of the merger on competition, competitive constraints
and the efficiency of markets, rather than the efficiency of individual firms.131
Consequently, a merger which results in a SLC will contravene s 50 even if the
merger results in a more efficient firm with a lower cost structure.132 However, if
efficiencies are likely to result in lower (or not significantly higher) prices,
increased output and/or higher quality goods or services, the merger may not
substantially lessen competition. The ACCC generally only considers mergerrelated efficiencies to be relevant to s. 50 merger analyses when it involves a
significant reduction in the marginal production cost of the merged firm and there
is clear and compelling evidence that the resulting efficiencies directly affect the
level of competition in a market and these efficiencies will not be dissipated postmerger.133
Efficiencies recognized include greater economies of scale and scope from

combining production, distribution and marketing activities, greater innovation
yields from combining investment in research and development and reduced
transaction costs.134 Efficiencies need not be passed on as such, at least not
necessarily in the form of a post-merger reduction in price, but must have a
sustained impact on the level of competition post-merger.135
130
131
132
133
134
135

Chapter3|Page101
A number of commentators have argued that efficiency claims should be given

more prominence in the substantive analysis of mergers in Australia,136 with
some pushing for the introduction of an efficiency defence,137 so that proof that a
merger would enhance economic efficiency could trump any finding that the
merger would result in a SLC. Others have sought more modest recognition of
the value of efficiencies through formal incorporation of efficiency considerations
a factor that must be considered with the other factors listed in s 50(3) of the
Act.138 However, the most recent review of Australias merger laws, while
highlighting economic efficiency as an important goal because it is reflected in
high productivity, which in turn is important to sustaining economic welfare,139
nevertheless recommended against the proposed changes for a number of
reasons. First, they observed that there was already an authorization
mechanism in place for parties who could demonstrate, as a result of efficiencies
or otherwise that their anti-competitive merger could be justified on public
benefit grounds.140 Second, where efficiencies operate to counter or reduce
potential anti-competitive detriment arising from a proposed merger, they are
already considered as part of the initial competition analysis. Finally, concern
was expressed that an efficiency test within s 50 would inhibit the ability of the
ACCC to provide a quick clearance process because of increased complexity141
and would also give the ACCC more discretion than it currently has,142 which was
136
137
138
139
140
141
142
See generally, SFE Corporation Limited, above n 89, 1.

Business Council of Australia, above n 25, 12; Business Law Committee of the Law Council
of Australia, above n 88, 58. There was also some express opposition to such a defence:
Spier Consulting Pty Ltd, above n 82, 12.
See, eg, SFE Corporation Limited, above n 89, 14; Australian Industry Group, above n 65,
12; Australian Bankers Association, Submission to the Review of the Competition
Review 2002, 11; Business Law Committee of the Law Council of Australia, above n 88, 57.
Dawson Report, above n 25, 56. A few submissions also claimed efficiency was more
important than competition: Productivity Commission, Submission to the Review of the
Practices Act Review 2002, 47; Business Law Committee of the Law Council of Australia,
above n 88, 58. Compare Spier Consulting Pty Ltd, above n 82, 15.
Ibid 57.
Ibid 57.
Chapter3|Page102
considered undesirable. Consequently, no change to the law relating to

efficiencies was made.
Foreign mergers
Section 50 of the TPA is capable of capturing mergers involving foreign
companies or companies operating in more than one jurisdiction outside
Australia. However, where the acquisition takes place entirely outside Australia
and s 50 does not apply, a separate provision may operate. Section 50A of the
TPA incorporates the same competition test as s 50, but also directly includes a
public benefit test as part of the substantive assessment. In practice, however,
this provision has been rendered virtually redundant it has application only
when s 50 does not apply and section 50 has been interpreted expansively so as
to capture most foreign mergers likely to have any impact on the Australian
market.
3.3.2 United States of America
Despite being the most established of all modern competition law regimes,
debate continues in the US as to the goal or goals its merger laws should aim
to achieve. It is commonly suggested that the purpose of the laws in the US is
and should be to prevent the acquisition of market power, including the
prevention of the corporate aggregate of social and political power.143 This is
reflected in the Horizontal Merger Guidelines (HM Guidelines) which state that
the core concern of the antitrust laws, including as they pertain to mergers
between rivals, is the creation or enhancement of market power.144 Market
power is defined in the HM Guidelines as the ability profitably to maintain prices
143
144
Alan A Fisher and Robert H Lande, 'Efficiency Considerations in Merger Enforcement'

(1983) 71 California Law Review 1582 from 1588. Fisher and Lande also claim that fear of
such concentration of power was of greater concern to Congress than the possibility of
allocative efficiency resulting from monopoly pricing. See also chapter 2.
Department of Justice and Federal Trade Commission, Commentary on the Horizontal
Merger Guidelines (2006) 1.
Chapter3|Page103
above competitive levels for a significant period of time.145 The agencies

responsible for merger enforcement the Federal Trade Commission (FTC) and
the Department of Justice (Antitrust Division) (DOJ(AD)) (collectively the
Agencies) will, therefore, challenge mergers that are likely to create or enhance
the merged firms ability either unilaterally or through coordination with rivals
to exercise market power.146
While there is clear concern about merger-generated increases in market power,
the welfare standard upon which these concerns over market power is based is
less clear. Commentators, however, continue to disagree over not only the
standard that should be adopted, but the standard that is actually adopted, as
reflected in case law and by the HM Guidelines.147 The US, as with most OECD
countries, claims to have a consumer welfare148 objective which drives merger
regulation, but it is not always clear what they mean by this term.149 The courts
and Agencies, while adopting the terminology of Bork150 (who was referring to
total welfare), have sometimes used this term more restrictively to mean
consumer surplus, favouring post-merger savings to consumers over producers
and to incorporate broader consumer benefits, including increased quality and
variety.151
145
146
147
148
149
150
151

See Gifford and Kudrle, above n 2, 450-455.
See, eg, Debra A Valentine, The Evolution of US Merger Law (Speech delivered to the
INDECOPI Conference, 13 August 1996).
See discussion in chapter 2regarding the meaning of consumer welfare. See also Eugne
Buttigieg, Competition Law: Safeguarding the Consumer Interest A Comparative Analysis
of US Antitrust Law and EC Competition Law (Kluwer Law International, The Netherlands,
2009) from 17.
Robert H Bork, The Antitrust Paradox: A Policy at War with Itself (1978) ch 2.
See, for example, An Renckens, 'Welfare Standards, Substantive Tests, and Efficiency
Considerations in Merger Policy: Defining the Efficiency Defense' (2007) 3 Journal of
Competition Law and Economics 149. See also Valentine, above n 148: Our goal today is
to protect consumer welfare, but we use that term in a different sense than the Chicago
School did. It is not appropriate to maintain that the merger laws are only concerned with
Chapter3|Page104
The legislation
There are multiple laws which may operate to prohibit mergers in the US,
including section 5 of the Federal Trade Commission Act,152 section 7 of the
Clayton Act153 and sections 1154 and 2155 of the Sherman Act.156 Together they
prohibit mergers which SLC or tend to create a monopoly. Although the primary
merger provision, contained in section 7 of the Clayton Act,157 appears to
152
153
154
155
156
157
achieving the best allocation of resources. That is not a fair reading of the legislative history.
Merger efficiencies do matter, but so do price increases that consumers have to pay,
reductions in the quality of products, less service, less variety of goods and services and
reductions in other forms of rivalry such as innovation and R & D.
Federal Trade Commission Act 1914, 15 USC 45 effectively allows the FTC to challenge
any conduct that would violate either the Sherman Act or the Clayton Act: see FTC v Motion
Picture Adver Co, 344 US 392 (1952), FTC v Cement Inst, 333 US 683, 691 (1947),
discussed in ABA Section of Antitrust Law, Mergers and Acquisitions (3rd ed, 2008) 11, fn
58. Many FTC merger proceedings are based on section 7 of the Clayton Act, but rely on
section 5 of the FTC Act for jurisdiction: ABA Section of Antitrust Law, Mergers and
Acquisitions (3rd ed, 2008) 11-12.
Sherman Antitrust Act 1890, 15 USC 1: Every contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with
foreign nations, is declared to be illegal. . It has been observed that section 7 of the
Clayton Act has all but eliminated the Sherman Act as a necessary tool for antitrust merger
enforcement: ABA Section of Antitrust Law, Mergers and Acquisitions, above n 152, 9.
Sherman Antitrust Act 1890, 15 USC 2: Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person or persons, to monopolize any
part of the trade or commerce among the several States, or with foreign nations, shall be
deemed guilty of a felony, . The requirement to prove intent to monopolize means that
this provision is generally much more difficult to prove than section 7 of the Clayton Act and,
as a consequence, is much less frequently used: ABA Section of Antitrust Law, Mergers and
Acquisitions, above n 152, 11.
In addition, there are fourteen state antitrust statutes that regulate mergers and acquisitions:
see ABA Section of Antitrust Law, Mergers and Acquisitions, above n 152, 12.
Clayton Antitrust Act 1914, 15 USC 18. In its original form, section 7 of the Clayton Act
1914 prohibited only the acquisition by one corporation of the stock of another corporation
when such an acquisition would likely result in a substantial lessening of competition
between the acquiring and the acquired firms (ABA Section of Antitrust Law, Mergers and
Acquisitions, above n 152, 2) and did not apply to asset acquisitions. Deficiencies
associated with the law in its original form led to the introduction of numerous amendment
bills and, eventually, the enactment of the Celler-Kefauver Antimerger Act in 1950 (now part
of 15 USC 18). Section 7 was expanded again in 1980 (the Antitrust Procedural
Improvements Act of 1980, extending the Act to acquisitions among persons, not just
corporations and broadening the coverage of the Act to include transactions that affected
interstate commerce: see generally ABA Section of Antitrust Law, Mergers and Acquisitions,
above n 152, 2-6. See also Brown Shoe Co v United States, 270 US 294 (1962).
Chapter3|Page105
encompass both a SLC and a dominance test, by prohibiting acquisitions of

shares or capital, the effect of which may be substantially to lessen competition
or to tend to create a monopoly,158 in practice the clear focus is clearly on SLC
test, as reinforced by the HM Guidelines.159
Analytical approach
The Agencies have concurrent jurisdiction to challenge mergers under section 7
of the Clayton Act. Since 1948 there has been a formal liaison agreement
between the Agencies to resolve any conflicts arising from this concurrent
jurisdiction and avoid duplicate investigations, although this has experienced only
limited success.160
The Agencies have produced numerous interpretations and guides to assist
parties in assessing the legality of their proposed mergers and also to guide the
Agencies in their own review. They include the HM Guidelines, Commentary on
the HM Guidelines (Commentary),161 Non-Horizontal Merger Guidelines162 and
the Antitrust Guidelines for Collaborations Among Competitors.163 The first set of
merger guidelines were published by the DOJ in 1968. They were replaced by
the 1982 Merger Guidelines which were subsequently replaced by the current
1992 Merger Guidelines which were again amended in 1997.164 In 2006 further
158
159
160
161
162
163
164

Merger Guidelines (2006) 1-2.
ABA Section of Antitrust Law, Mergers and Acquisitions, above n 152, 16.
Merger Guidelines (2006).
Department of Justice, Non-Horizontal Merger Guidelines (14 June 1984).
Federal Trade Commission and US Department of Justice, Antitrust Guidelines for
Collaborations Among Competitors (April 2000).
Department of Justice and Federal Trade Commission, Horizontal Merger Guidelines
(issued 1992; revised 8 April 1997). The amendment related to the role of efficiencies in
merger analysis. For a detailed discussion of the evolution of these Guidelines see ABA
Section of Antitrust Law, Mergers and Acquisitions, above n 152, 19-26.
Chapter3|Page106
guidance was provided with the release of the Commentary. The DOJ(AD) is
currently conducting a review of the HM Merger Guidelines.165
As is the case in Australia, the HM Merger Guidelines have no legal force, but the
courts have found them to be useful tools for their own merger analyses.166 The
HM Guidelines make clear that the focus for the Agencies will be mergers which
enhance market power, stating that mergers should not be permitted to create or
enhance market power or to facilitate its exercise.167 The Agencies consider
that a seller has market power if it has the ability profitably to maintain prices
above competitive levels for a significant period of time168 and recognize that
market power may be exercised by unilateral or coordinated conduct, so that
where a merger enhances the capacity for a firm to act in a co-ordinated fashion
for example, by creating an oligopoly it may SLC despite the inability of the
merged entity to act in the same manner unilaterally. Similarly, a buyer has
market power if, alone or through a coordinated group, a firm can depress the
price paid for a product to a level that is below the competitive price and thereby
depress output.169
In assessing whether a merger will have this result, the Agencies will ask a range
of questions,170 beginning with whether the merger will significantly increase
concentration, determined through application of the HHI test. As in Australia,
165
166
167
168
169
170
Christine A Varney, Merger Guidelines Workshops (Speech delivered at the Third Annual
Georgetown Law Global Antitrust Enforcement Symposium, Washington DC, 22 September
2009). See also Deborah L Feinstein, Enforcement Changes: Evolution or Revolution?
(2009) 24 Antitrust 5; Larry Fullerton, Revisions to the Horizontal Merger Guidelines (2009)
24 Antitrust 7 and Deborah L Feinstein, Mark D Whitener, Paul T Denis, Dennis W Carlton
and Christine S Meyer, Roundtable Discussion: Merger Guidelines Revisited? (2009) 24
Antitrust 8.
(issued 1992; revised 8 April 1997) 0.1. See also 0.2.
(issued 1992; revised 8 April 1997) 0.1.
Chapter3|Page107
this assessment is predicated on the notion that a relevant creation or increase in

market power is unlikely to be achieved in the absence of such enhanced
concentration,171 although concentration alone will not be conclusive evidence of
significantly enhanced market power. Where increased concentration will result,
the Agencies then ask whether or not the merger raises concerns about potential
adverse competitive effects.172
The HM Guidelines are broken into five distinct sections,173 including market
definition,174 competitive effects, barriers to entry, failing firms and efficiencies.
In relation to competitive effects, Part 2 of the HM Guidelines focuses on both
unilateral and coordinated effects,175 with market share and concentration data
providing a starting point for this analysis.176
In relation to anti-competitive coordinated action, the Agencies will also examine
the extent to which post-merger market conditions are conducive to reaching
171
172
173
174
175
176

ABA Section of Antitrust Law, Mergers and Acquisitions, above n 152, 25: Attention on
competitive effects may in part reflect the declining significance of market concentration in
merger investigations.
Merger Guidelines (2006) 2: the Agencies do not apply the Guidelines as a linear step-by
step progression that invariably starts with market definition and ends with efficiencies or
failing assets.
This has been discussed at pages 79-84, above.
(issued 1992; revised 8 April 1997) 18, 2.0. See also: Brown Shoe Co v United States, 370
US 294 (1962) 343, United States v Philadelphia National Bank, 374 US 321 (1963), United
States v General Dynamics Corp, 415 US 486 (1974), discussed in ABA Section of Antitrust
Law, Mergers and Acquisitions, above n 152, 138. Compare Varney, An Update on the
Review of the Horizontal Merger Guidelines, above n 21 who states: [w]hen it is clear
that either certain vulnerable customers are likely to be harmed by a merger, or that certain
customers have in fact been harmed by a consummated merger, the need to define a
market to assess likely competitive effects is diminished .
Chapter3|Page108
terms of coordination, detecting deviations from those terms, and punishing such
deviations.177 Relevant factors include:
the availability of key information concerning market conditions, transactions and
individual competitors; the extent of firm and product heterogeneity; pricing or
marketing practices typically employed by firms in the market; the characteristics
of buyers and sellers; and the characteristics of typical transactions.178
Unilateral effects will occur where, post-merger, a firm would find it profitable to
alter their behaviour unilaterally by elevating price and suppressing output.179
This is most likely to occur where a significant share of sales in the market [were]
accounted for by consumers who regard the products of the merging firms as
their first and second choices.180
Market concentration may assist in determining the likelihood of post-merger
unilateral effects even in differentiated markets where the market share of the
firms reflects not only its relative appeal as a first choice to consumers of the
merging firms products but also its relative appeal as a second choice, and
hence as a competitive constraint to the first choice.181
The HM Guidelines also recognize that where products are relatively
undifferentiated and it is capacity that primarily distinguishes firms and shapes
the nature of their competition, the merged firm may find it profitable unilaterally
to raise price and suppress output.182 This will not, however, be the case where
177
178
179
180
181
182

(issued 1992; revised 8 April 1997) 19, 2.1. See also 2.12.
(issued 1992; revised 8 April 1997) 19, 2.0. It will also be relevant to assess whether the
firms in the market have previously engaged in collusive conduct.
(issued 1992; revised 8 April 1997) 22, 2.2.
(issued 1992; revised 8 April 1997) 23, 2.21. The greater the substitutability between the
products of the merged firm, the greater the likely post-merger price rise.
(issued 1992; revised 8 April 1997) 23, 2.21. See also 2.211-2.212.
Chapter3|Page109
the merged firms customers could find economical alternative sources of supply
in a reasonable timeframe.183
In making their competition assessment the Agencies frequently use merger
simulations184 designed to predict post-merger prices. These simulations
generally involve first obtaining market shares and price elasticities of demand
for each product in the pretransaction market185 and then estimating the price
changes that generate post-transaction margins, elasticities, and shares that are
consistent with the merged firms maximizing profits for all of the brands it now
owns. The prices of the products of competitors will also be changed to reflect
their response to the changed competitive environment.186
Although collusion theories continue to significantly outnumber unilateral
concerns in merger investigations, it is unilateral concerns that are more likely to
generate an enforcement action,187 with monopoly,188 or concern about strong
unilateral effects, forming the basis for the majority of challenged mergers in
recent years.189 Statistically and not surprisingly the greater the number of
pre-merger rivals, the less likely the merger will be challenged.190
Part 3 of the HM Guidelines deals with barriers to entry, acknowledging that a
merger is unlikely to enhance or create market power where entry to the market
is easy. In this respect the Agencies will ask whether new entry into the market
will be timely, likely and sufficient either to deter or to counteract the competitive
183
184
185
186
187
188
189
190
Ibid.
Malcolm B Coate, 'Bush, Clinton, Bush: Twenty Years of Merger Enforcement at the Federal
Trade Commission' (Working Paper, 29 September 2009) 24.
A study by Coate suggests a shift to stronger monopoly/dominant firm/duopoly theories
after 1992: Coate, above n 187, 12. Monopoly, in this sense, is used to describe a merger
combining the only two significant market rivals, where other shareholdings do not exceed
10%.
Coate, above n 187, 30 (Table 4).
Ibid 16.
Chapter3|Page110
effects of concern191 using a three step process.192 First, they consider whether
entry would achieve significant market impact within a timely period with a
period of two years from planning to significant market impact considered
timely.193 Second, they ask whether entry be profitable,194 thereby making it a
likely response to anti-competitive market effects generated by a merger. Finally,
they ask whether timely and likely entry would be sufficient to return market
prices to their premerger levels.195 If the answer to any of these questions is
yes, the threat of entry is considered likely to sufficiently deter anti-competitive
activity.
The final section of the HM Guidelines, Part 5, directly addresses the issue of
failing firms. Frequently referred to as the failing firm defence,196 the Agencies
will, where relevant, consider the likelihood that, but for the merger, one of the
parties would be likely to fail, causing its assets to exit the market.197 It is,
however, extremely difficult to satisfy the failing firm criteria, which include proof
that good faith attempts at attracting alternate offers have been made198 and that
191
192
193
194
195
196
197
198

This is assessed on the bases of premerger market prices over the long term: Department
of Justice and Federal Trade Commission, Horizontal Merger Guidelines (issued 1992;
revised 8 April 1997) 26, 3.0.
Although often referred to as a defence, failing firm issues are considered together with
other issues that affect post-merger competition. See Department of Justice and Federal
Trade Commission, Horizontal Merger Guidelines (issued 1992; revised 8 April 1997) 5.
(issued 1992; revised 8 April 1997) 0.2. In this respect a merger is not likely to create or
enhance market power or to facilitate its exercise, if imminent failure of one of the
merging firms would cause the assets of that firm to exit the relevant market: This is
assessed on the bases of premerger market prices over the long term (5.0).
Chapter3|Page111
absent the acquisition, the assets of the failing firm would exist the relevant
market.199
The role of efficiencies
Part 4 of the HM Guidelines is dedicated to efficiencies and was the subject of
the 1997 revision.200 It notes that although competition usually spurs firms to
achieve efficiencies internally,201 the primary benefit of mergers to the economy
is their potential to generate such efficiencies.202 In recognition of this
dichotomy, Agencies will consider in detail whether or not the merger will produce
efficiency gains that could not reasonably be achieved by other means where
they are verifiable and will benefit consumers.203
Efficiencies are considered to be present204 where they are merger specific205
and verified by agency staff, with fixed cost economies generally held to a higher
standard than clear marginal cost savings.206 Verification and quantification is,
however, difficult and the onus rests on the merging parties to substantiate any
claims of efficiency. Claims that are vague or speculative or otherwise cannot be
199
200
201
202
203
204
205
206
Ibid. Parties must also demonstrate that the allegedly failing firm would be unable to meet
its financial obligations in the near future (5.1) and that it would not be able to reorganize
successfully under Chapter II of the Bankruptcy Act (5.0).
Coate observes that the only significant change in relation to analytical approach to mergers
by the Federal Trade Commission in the last twenty years has been in relation to
efficiencies: Coate, above n 187, 2. This, he says, suggests FTC policy has been basically
stable over the last 20 years. However, the merger guidelines are currently under review.
See fn 165, above.
(issued 1992; revised 8 April 1997) 4.
Ibid.
Utton, above n 7, 76-77. See Department of Justice and Federal Trade Commission,
Horizontal Merger Guidelines (issued 1992; revised 8 April 1997) 4.
Coate, above n 187, 17.
Ibid: efficiencies ... that can be accomplished without the merger or even those that could
be captured after a settlement are rejected as not relevant.
See Coate, above n 187, 17. See also Department of Justice and Federal Trade
Commission, Horizontal Merger Guidelines (issued 1992; revised 8 April 1997) 4.
Chapter3|Page112
verified by reasonable means will not be considered.207 This makes it

particularly difficult to rely on dynamic efficiencies.208 As a result, it has been
suggested that recognition of efficiencies has had little impact in practice,
because it remains difficult for merging parties to provide well founded
quantitative estimates of just how the savings will be made.209
Where efficiencies can be demonstrated and they are of such a character and
magnitude such that the merger is not likely to be anticompetitive in any relevant
market210 it will not be challenged by the Agencies.211
The HM Guidelines make
clear, however, that mergers enhancing a merged firms ability to exercise market
power will be challenged, regardless of increased efficiencies212 and the US
Supreme Court has held that efficiencies are not a relevant consideration when
determining the legality of a merger.213
In recent years, however, there has clearly been an increased recognition of
efficiencies214 and, in general efficiencies are thought to reduce the likelihood of
207
208
209
210
211
212
213
214

(issued 1992; revised 8 April 1997) 4. This is the case even though the Commentary (at 1)
accepts that many mergers enable the merged firm to reduce its costs and become more
efficient, which, in turn, may lead to lower prices, higher quality products, or investments in
innovation.
Utton, above n 7, 76, who also observes that [w]here they have been given they have
tended to be either unconvincing or small.
See also Eleanor M Fox and Robert Pitofsky, United States' in Edward M Graham and J
David Richardson (eds), Global Competition Policy (1997) 251.
For example, see FTC v Procter & Gamble Co 383 US 586, 580 (1967) (Possible
economies cannot be used as a defence to illegality. Congress was aware that some
mergers which lessened competition may also result in economies, but it struck the balance
in favour of protecting competition.)
There are two Bureaus of the Federal Trade Commission involved in merger analysis: the
Bureau of Competition and the Bureau of Economics. Coates analysis suggests the latter is
much more likely to find efficiencies than the former although, the statistics also suggest
that the Bureau of Competition is now more likely to find relevant merger efficiencies than in
the past: Coate, above n 187, 17-18. In addition, for structurally less competitive markets
Chapter3|Page113
a merger challenge, although it is unclear how they are balanced with competitive
concerns. 215 The current review of the Agencies HM Guidelines may result in
an increased emphasis on efficiencies into the future.216
3.3.3 European Union

The European Union (EU)217 was established by the Treaty of Rome of 1957218
and currently comprises 27 Member States, 19 of which are also OECD Member
States. The EU forms a single internal market,219 with one of its aims being to
ensure competition within the internal market is not distorted.220
215
216
217
218
219
220
(three-to-two or two-to-one) transactions), the effect of efficiencies on the enforcement

decision is noticeably lower: Coate, above n 187, 22.
Varney, Merger Guidelines Workshops, above n 165.
The Treaty of Lisbon (also sometimes referred to as the Reform Treaty), which entered
force on 1 December 2009, changed references to the European Community to European
Union: Treaty of Lisbon amending the Treaty on European Union and the Treaty
establishing the European Community of 13 December 2007 [2007] OJ C 306 (entered into
force 1 December 2009) (Treaty of Lisbon), Article 2(2)(a). For a summary of these
changes see: Field Fisher Waterhouse, Treaty of Lisbon: All Change for 2010 (2009) Field
Fisher Waterhouse <http://www.ffw.com/publications/all/alerts/treaty-of-lisbon.aspx> at 20
January 2010 and Slaughter and May, Key Changes in Terminology Following Lisbon
(November 2009) Slaughter and May
<http://www.slaughterandmay.com/media/894496/key_changes_in_terminology_following_li
sbon_nov_2009.pdf> at 20 January 2010
The official name of the Treaty of Rome was the European Commission Treaty until 1
December 2009 when the Treaty of Lisbon (Treaty of Lisbon [2007] OJ C 306 (entered into
force 1 December 2009)) entered force. It is now officially called the Treaty on the
Functioning of the European Union (TFEU). The key competition law provisions of the
Treaty are now contained in Articles 101 and 102 of the TFEU.
The Treaty of Lisbon replaced the term common market with the term internal market:
Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009), Article 2(2)(g).
The Treaty of Lisbon incorporated a new Protocol on the Internal Market and Competition,
which provides that the internal market includes a system ensuring that competition is
not distorted [and] to this end, the Union shall, if necessary, take action under the provisions
of the Treaties : Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009).
See also Joaqun Almunia, New Frontiers of Antitrust (Speech to the 1st Annual
Conference of the Journal Concurrences, National Assembly, Paris, 15 February 2010,
translated by Google translate, 17 February 2010): Competition plays a central and
indispensable role in the successful construction of the European internal market.
Chapter3|Page114
Mergers, referred to as concentrations, which have an EU dimension221 are

governed by the EU Merger Regulation (EUMR).222 Whether or not a merger has
the requisite EU dimension is determined by levels of turnover and, if satisfied,
the EUMR applies to the exclusion of national merger laws.
A proposed merger will be blocked if the European Commission (EC) finds it
incompatible with the internal market. The meaning of incompatibility with the
internal market has undergone significant reform in recent years.223 Between
1989 and 2004 the EUMR224 prohibited mergers only where they led to the
creation or strengthening of a dominant position, as a result of which effective
competition was impeded in the internal market.225 In 2004 the EU adopted a
competition test for mergers.226 The new regulation declares mergers which
significantly impede effective competition (SIEC) in the internal market,
particularly as a result of the creation or strengthening of a dominant position to
be incompatible with the internal market.227 The emphasis is, therefore,
reversed. While dominance remains an important even vital consideration, it
is now subordinated to a competitive effects test. It also differs in that dominance
is not an additional requirement; under the former test the merger was required to
lead to dominance and impede effective competition in the internal market.
221
222
223
224
225
226
227
Until the entry into force of the Treaty of Lisbon on 1 December 2009, the European Union
dimension was referred to as the Community dimension: Council Regulation (EC) No
139/2004 of 20 January 2004 on the Control of Concentrations Between Undertakings
[2004] OJ L 24, Article 21(3).
Between Undertakings [2004] OJ L 24 (replacing Council Regulation (EC) No 4064/89 of 21
December 1989 on the Control of Concentrations Between Undertakings [1989] OJ L 395).
Whish, Competition Law, above n 18, 52. For detailed discussion of the reasons for the
change see pages 852-857.
Council Regulation (EC) No 4064/89 of 21 December 1989 on the Control of Concentrations
Between Undertakings [1989] OJ L 395 (then referred to as the ECMR)
Between Undertakings [1989] OJ L 395. During that time the internal market was referred to
as the common market.
Mergers are referred to as concentrations in the EUMR. In this chapter the terms mergers
and concentrations are used interchangeably.
Between Undertakings [2004] OJ L 24, art 2(3).
Chapter3|Page115
Under the new test a merger is incompatible where it significantly impedes

effective competition, whether or not it also leads to dominance.228 While the
reference to dominance might, therefore, appear superfluous, it represents a
compromise between the previous long-standing dominance test and a pure SLC
test229 and was borne partly out of a desire to preserve the value of guidance
from previous EU Court and EC decisions.230 The push for change was
catalysed by the controversy surrounding the ECs decision to prohibit a hostile
takeover in Airtours/First Choice Case,231 which was annulled by the then Court
of First Instance.232 Part of the concern arising from the decision was that the EC
had tried to stretch the concept of collective dominance beyond its natural
limit233 in an effort to block what it considered to be a harmful merger. A
question arose, therefore, as to whether the dominance test as it then applied left
a gap that could and should be filled by a competition test, or whether there
was no detrimental gap that required filling. The EU was persuaded that the
former was true and amended the EUMR accordingly.
228
229
230
231
232
233
The test also enables the Commission to prohibit or require the modification of a merger
that would not create or strengthen a dominant position but would significantly impede
effective competition: Whish, Competition Law, above n 18, 856.
See, eg, Council Regulation (EC) No 139/2004 of 20 January 2004 on the Control of
Concentrations Between Undertakings [2004] OJ L 24, art 10(1), para 26. Whish observes
that it is envisaged that most cases will be dealt with under the dominance standard as a
result of the inclusion of the words in particular [and that] this responds to the concern that
a repeal of the dominance test would lead to uncertainty : Whish, Competition Law, above
n 18, 855.
Airtours/First Choice (IV/M1524) [2000] OJ L 93/1, [2000] CMLR 494. See also Whish,
Competition Law, above n 18, 852, observing that the implementation of the new test
followed a protracted debate which focused, in particular, on the respective merits of a test
based on dominance, on the one hand, and on a substantial lessening of competition
(SLC), on the other; and on the specific question of whether the dominance test left a gap
which meant that some mergers that could be harmful to competition could not be
challenged under the ECMR.
The Treaty of Lisbon renamed the Court of First Instance the General Court: Treaty of
Lisbon amending the Treaty on European Union and the Treaty Establishing the European
Community of 13 December 2007 European [2007] OJ C 306 (entered into force 1
December 2009).
Chapter3|Page116
Analytical Approach
To assist in determining whether a merger is incompatible with the internal
market, the EC has released Guidelines on the Assessment of Horizontal
Mergers under the Council Regulation on the Control of Concentration between
Undertakings234 (EC Merger Guidelines). These Guidelines rely very heavily on
past decisions of the EC and of the Court of Justice of the European Union235 in
setting out key concerns and relevant considerations.
The EC Merger Guidelines first address market share and concentration,236 it
being accepted that they can provide useful first indication of the market
structure and of the competitive importance of the merging parties and their
competitors.237 As is the case in Australian and the US, neither market share nor
concentration alone will determine the outcome of the case,238 although where
the market share of the parties post-merger will be 25 per cent or less, it will be
presumed compatible with the internal market.239
Market shares are normally assessed at the point in time the merger is being
evaluated, but if likely change is anticipated (for example, a new entrant is
expected or a failing firm is expected to exit) this may be adjusted accordingly.240
234
235
236
237
238
239
240
European Commission, Guidelines on the Assessment of Horizontal Mergers under the

Council Regulation on the Control of Concentrations between Undertakings of 5 February
2004 [2004] OJ C 31, 5-18.
Relevantly, the Court of Justice of the European Union comprises General Court and the
Court of Justice. The courts were renamed following the entry into force of the Treaty of
Lisbon on 1 December 2009: Treaty of Lisbon amending the Treaty on European Union and
the Treaty Establishing the European Community of 13 December 2007 [2007] OJ C 306
(entered into force 1 December 2009).
2004 [2004] OJ C 31, 5-18 para 14.
Ibid 858.
2004 [2004] OJ C 31, 5-18 para 18.
Ibid para 15. See also Whish, Competition Law, above n 18, 857-858.
Chapter3|Page117
Market concentration is usually measured using the HHI,241 with the EC generally
unlikely to be concerned with an HHI of less than 1,000242 or between 1,000 and
2,000 where the delta or change in HHI resulting from the merger is less than
250.243 Where the HHI is more than 2,000 but the delta is less than 150 the EC
is also unlikely to have concerns.244 Although these figures do not give rise to
presumptions either way,245 in the recent case of Sun Chemical Group BV v
Commission,246 the General Court noted that the greater the margin by which
those thresholds are exceeded, the more the HHI values will be indicative of
competition concerns.247
The next consideration dealt with in the EC Merger Guidelines is possible anticompetitive effects,248 with separate provision for coordinated and noncoordinated effects.
In respect of non-coordinated effects the EC Merger Guidelines express concern
over mergers which remove competitive restraints and thereby enhance the
market power of both the merged entity and other market participants which
could lead to significant price increases in the relevant market.249 The EC
Merger Guidelines indicate that these anti-competitive effects would normally
occur where a dominant position of a single firm is created or strengthened by a
merger and that typically the merged entity would have an appreciably larger
market share than the next competitor.250 A list of relevant factors are provided to
241
242
243
244
245
246
247
248
249
250
Ibid para 16.

Ibid para 19.
Ibid para 20.
Ibid para 20.
Ibid para 21.
Case T-282/06 Sun Chemical Group BV v Commission [2007] ECR II-2419, [2007] 5 CMLR
438.
Case T-282/06 Sun Chemical Group BV v Commission [2007] ECR II-2419, [2007] 5 CMLR
438, para 138, as quoted in Whish, Competition Law, above n 18, 858-859.
2004 [2004] OJ C 31, 5-18 paras 22-63.
Ibid para 24.
Ibid para 25.
Chapter3|Page118
assist in making this determination.251 Non-coordinated anti-competitive effects

are considered more likely where the merging parties have large market
shares,252 where the merging firms are close competitors,253 where customers of
the merging parties have limited possibilities of switching suppliers,254 where
competitors are unlikely to increase supply in response to a price increase,255
where the merged firm will be able to hinder expansion by competitors256 or
where the merger would remove an important competitive force.257
In respect of coordinated effects, the EC Merger Guidelines recognize, as do
those in Australia and the US, that in certain markets a merger may increase the
likelihood that firms will be able to behave in a coordinated fashion.258 The most
likely coordination would involve keeping prices at supra-competitive prices,259
but may also involve limiting production or new capacity, or division of markets.260
Coordination is considered more likely in markets where it is relatively simple to
reach a common understanding on the terms of coordination261 and three
conditions are satisfied: (1) the coordinating firm is able to police adherence to
the terms of coordination, (2) there is some credible deterrent available where
deviation is detected and (3) the coordination must not be capable of being
jeopardized by outside competitors (current or future) or by the reactions of
customers.262
251
252
253
254
255
256
257
258
259
260
261
262
Ibid 5-18 paras 26-38.

Ibid para 27.
Ibid paras 28-30.
Ibid para 31.
Ibid paras 32-35.
Ibid para 36.
Ibid paras 37-38.
Ibid paras 39-57.
Ibid para 40.
Ibid para 40.
Ibid para 41.
Ibid para 41. See further Whish, Competition Law, above n 18, 861-862 for discussion of
some recent case law.
Chapter3|Page119
After evaluating the potential for the merger to generate any of these anticompetitive concerns the EC will consider whether countervailing buying power
will provide effective competitive restraint.263 Similarly, where barriers to entry
are low, it is considered unlikely the merger will SIEC. 264 As is the case in
Australia and the US, to be considered effective to constrain the exercise of
merger-generated market power, the entry must be likely,265 timely and
sufficient.266 In determining whether entry would be likely, historical examples
will be relevant,267 and might include legal barriers, trade barriers, technical
barriers (eg, access to facilities, natural resources, intellectual property),
distribution and sales networks and economies of scale and scope.268 Entry will
be considered timely if it is sufficiently swift and sustained to deter or defeat the
exercise of market power and must normally occur within two years.269 This is
also consistent with the approach in Australia and the US. Entry will be
considered sufficient if it is of sufficient scope and magnitude to deter or defeat
the anti-competitive effects of the merger.270
As is the case in many other jurisdictions, the EC Merger Guidelines also
recognize a failing firm defence,271 noting that the basic requirement is that the
deterioration of the competitive structure that follows the merger cannot be said
263
264
265
266
267
268
269
270
271

2004 [2004] OJ C 31, 5-18 para 64-67.
Ibid para 68.
Ibid para 69: Entry is considered likely if it would be sufficiently profitable taking into account
the price effects of injecting additional output into the market and the potential responses of
the incumbents.
2004 [2004] OJ C 31, 5-18 para 68. Entry will be more difficult where sunk costs are high
and incumbents can protect their market shares by offering long-term contracts or giving
targeted pre-emptive price reductions to those customers that the entrant is trying to
acquire: para 69.
Ibid para 70.
Ibid para 71.
Ibid para 74.
Ibid para 75.
Ibid paras 89-91.
Chapter3|Page120
to be caused by the merger where there competitive structure of the market

would deteriorate to at least the same extent in the absence of the merger.272
Efficiencies in the EU
Prior to May 2004 the EU merger regime failed to explicitly endorse efficiency
considerations, but the vagueness of the test allowed the interpretation to
include efficiencies which were gradually introduced through EC decisions.273
The new EUMR explicitly provides for efficiencies, noting that274 mergergenerated efficiencies may counteract the effects on competition and in
particular the potential harm to consumers that it might otherwise have.275
Efficiency claims therefore form part of the overall merger assessment,276 rather
than providing a separate defence. For efficiencies to be be considered
sufficient to counteract adverse competitive effects, they must (1) benefit
consumers, (2) be merger-specific and (3) be verifiable.277 Efficiencies
recognized include cost savings in production or distribution which provide
272
273
274
275
276
277
Ibid para 89. The Commission considers three criteria particularly relevant: (1) the allegedly
failing firm would in the near future be forced out of the market because of financial
difficulties if not taken over by another undertaking, (2) there is no less anti-competitive
alternative purchase than the notified merger and (3) in the absence of a merger, the
assets of the failing firm would inevitably exit the market. (para 90) This is almost identical
to the formulation of the defence in the US.
Mitja Kocmut, 'The Role of Efficiency Considerations Under the EU Merger Control' ((L)
05/05, The University of Oxford Centre for Competition Law and Policy, 2005). See also
McMahon, above n 13, 17, noting that EU rules have generally been aimed at achieving
short-run competitive rivalry rather than the Chicago School goal of economically efficient
outcomes based on self-correcting markets.
Between Undertakings [2004] OJ L 24, recital 29: when determining the impact of a
concentration on competition in the [internal] market, it is appropriate to take account of any
substantiated and likely efficiencies put forward by the undertakings concerned. See also
Whish, Competition Law, above n 18, 863 and European Commission, Guidelines on the
Concentrations between Undertakings of 5 February 2004 [2004] OJ C 31, 5-18 paras 7688.
2004 [2004] OJ C 31, 5-18 para 76.
Ibid para 77.
Ibid para 78.
Chapter3|Page121
incentive to charge lower prices with a preference given to reductions in

variable or marginal costs over reductions in fixed costs, the former considered
more likely to result in lower prices for consumers278 and dynamic efficiencies
are also considered where consumers are likely to benefit from new or improved
products or services resulting from efficiency gains relating to innovation.279
However, efficiencies likely to be realized in the short term are given more weight
than those expected to be realized later in the future.280
3.4 Dominance
The dominance test prohibits mergers when they create or enhance a position of
dominance in the identified market. Until recently it was the test adopted in the
EU and the majority of EU Member States. With the EU now adopting a
competition test, a number of other Member States have also moved in that
direction. There are, however, a number of countries which have retained a
dominance test, including Austria, Belgium, Finland,281 Germany, Iceland,
Luxembourg and Slovenia. Switzerland also applies a form of dominance test.282
In most EU states which have retained a dominance test, the test is combined
with a competition requirement, so that a merger that tends to create or enhance
a position of dominance will be prohibited only if it also leads to a reduction in
competition.
278
279
280
281
282
Ibid para 80.

Ibid para 81.
Ibid para 83.
There is a proposal to replace the current dominance test with a SIEC test in 2010: see
Christian Wik and Niko Hukkinem, Finland in John Davies (ed), Merger Control 2010: The
International Regulation of Mergers and Joint Ventures in 64 Jurisdictions Worldwide,
Getting the Deal Through (2009) 133 and Antitrust Encyclopedia: Finland (November 2009)
Concurrences
<http://www.concurrences.com/nr_one_question.php3?id_rubrique=571#ancre33> at 16
February 2010.
There is a proposal to replace the current dominance test with a SIEC or SLC test in 2010:
see Astrid Waser, Benot Merkt and Marcel Meinhardt, Switzerland in John Davies (ed),
Merger Control 2010: The International Regulation of Mergers and Joint Ventures in 64
Jurisdictions Worldwide, Getting the Deal Through (2009) 352.
Chapter3|Page122
3.4.1 Finland
The Act on Competition Restrictions283 (the Finnish Competition Law) has as its
objective the promotion of competition.284 The merger law itself, however, mirrors
that of the former EU Merger Regulation, prohibiting mergers that create or
strengthen a dominant position as a result of which competition would be
significantly impeded in the Finnish market or a substantial part thereof.285
Consequently, the Finnish Competition Law does not apply a pure dominance
test, instead requiring both dominance and a significant impediment of
competition before it will be contravened. Joint dominance, while not referred to
expressly, is also recognized by the Finlands Market Court.286
The principal theory of harm upon which mergers are assessed pursuant to this
test is increased market power. Market is defined as substitutability of supply
and demand287 and in assessing merger-generated increases in market power
the Finnish Competition Authority (FCA) will take into account
not only the market share of the parties but also other factors such as the
economic and financial strength of the concentration, amount and nature of
residual competition, the bargaining power of customers and suppliers, potential
competition, barriers to entry and saturation of the markets.288
283
284
285
286
287
288
Act on Competition Restrictions (480/1992) including Amendment (318/2004).

OECD, Substantive Criteria Used in the Assessment of Mergers (Best Practice Roundtable
on Competition Policy, DAFFE/COMP(2003)5, 11 February 2003) 169.
Wik and Hukkinem, above n 281, 139. See Act on Competition Restrictions (480/1992)
article 11 d (1529/2001). As noted above, there is a proposal to replace the current
dominance test with a SIEC test in 2010: see Antitrust Encyclopedia: Finland, above n 281,
and Wik and Hukkinem, above n 281, 133.
OECD, Substantive Criteria Used in the Assessment of Mergers, above n 284, 169.
Finnish Competition Authority, Abuse of Dominant Position <http://www.kilpailuvirasto.fi/cgibin/english.cgi?luku=antitrust/abuse-of-dominant-position&sivu=abuse-of-dominantposition> at 28 January 2010
Wik and Hukkinem, above n 281, 139. See also OECD, Substantive Criteria Used in the
Assessment of Mergers, above n 284, 170, noting that several non-decisive factors are
considered relevant to assessment of mergers, including symmetry of market shares and
cost structures, transparency of markets, entry barriers, stagnant demand, the possibility
Chapter3|Page123
Increases in product and dynamic efficiency occurring in the Finnish market are
considered, provided that the efficiency gains are passed on to customers and
are merger-specific.289 The weight afforded economic efficiency claims will
depend on the significance of the efficiencies and the likelihood of their
achievement290 and there is no explicit efficiency defence. Generally, the EC
Horizontal Merger Guideline principles are followed in this respect.291
3.4.2 Switzerland
The substantive merger law of Switzerland is contained in their Cartel Act.292
The Swiss Competition Commission, the principal enforcement body in
Switzerland, has the power to prohibit a merger or authorize it subject to
conditions where the concentration:
(a) creates or strengthens a dominant position liable to eliminate effective
competition, and
(b) does not lead to a strengthening of competition in another market which
outweighs the harmful effects of the dominant position.293
When considering competitive effects, the Competition Commission must take
account of market developments and the situation with regard to international
competition.294 Despite the emphasis on market dominance, the Competition
289
290
291
292
293
294
of monitor and punish the deviator (for collective dominant), lack of counterveilling power
and product homogeneity.
Wik and Hukkinem, above n 281, 139.
Wik and Hukkinem, above n 281, 139.
See further OECD, Substantive Criteria Used in the Assessment of Mergers, above n 284,
172.
Federal Law on Cartels and Other Restrictions of Competition of 6 October 1995.
Procedure is contained in the Merger Control Regulation of 17 June 17 1996 (SR 251.4).
See also Merger Notification and Procedures Template: Switzerland (updated March 2006).
Federal Law on Cartels and Other Restrictions of Competition of 6 October 1995, article
10(2).
Federal Law on Cartels and Other Restrictions of Competition of 6 October 1995, article
10(4).
Chapter3|Page124
Commission investigates both coordinated effects (in cases of oligopoly) and

unilateral effects.295
There are, however some questions relating to the independence of the
Commission from the Secretariat, with a recent review of the Cartel Act
concluding that, in the area of merger control, Switzerland was falling behind
international best practice.296 As a result, the review concluded that there was a
risk that mergers having a strong negative effect on competition, and
consequently on the economy and consumer welfare in Switzerland, might be
approved297 and recommended harmonization with the EU merger control
system. The review also recommended a dynamic consumer welfare standard
be applied to merger regulation.298 In this respect, although efficiencies are
currently taken into account where benefits are passed on to consumers,299 the
review recommended that an efficiency defence should be made available.300
No changes have yet been made to the Swiss merger law, but possible
amendments are expected in 2010.301
3.5 Public Benefits

In some jurisdictions additional public benefits or national interest considerations
may apply. Until recently302 the UK adopted a public interest test for assessing
mergers. More commonly, public interest considerations may provide an
exemption to otherwise unlawful conduct. For example, in Australia and New
Zealand a merger may be authorized, despite substantially lessening
295
296
297
298
299
300
301
302
Waser, Merkt and Meinhardt, above n 282, 354.

Competition Commission, Evaluation of the Cartel Act: Synthesis Report in Brief (2009)
<http://www.weko.admin.ch/dokumentation/00216/index.html?lang=en> at 20 January 2010.
Competition Commission, Evaluation of the Cartel Act, above n 296. See also Waser, Merkt
and Meinhardt, above n 282, 354: political considerations may have some impact.
Competition Commission, Evaluation of the Cartel Act, above n 296.
Competition Commission, Evaluation of the Cartel Act, above n 296.
The public interest test applied until 2002 when the Enterprise Act 2002 (UK) entered force.
Chapter3|Page125
competition, if the public benefits likely to flow from the merger will outweigh the
potential anti-competitive detriment.
3.6 Analysis and conclusions

3.6.1 Overview
A countrys choice of substantive law may reflect different objectives, histories,
different economic size, industrial advancement or geographic location.303
Statistics suggest, however, that there is generally little difference in the outcome
of merger reviews conducted in multiple jurisdictions that apply different tests.304
Nevertheless, the potential remains for divergent outcomes, evidenced by some
high profile cases involving the US and EU authorities, which can lead to
uncertainty for merging parties and can cause friction between countries.305 This
303
304
305
See, eg, Gal, Competition Policy for Small Market Economies, above n 3, 200-201, who
claims that in small economies the concern for ensuring that a sufficient number of
competitors operate in each market should be subordinated to the more compelling
necessity of serving a small population efficiently [In small economies] protection of
competition would blockade many mergers that have positive welfare effects. Compare
Whish, Substantive Analysis, above n 10, 102, who argues it may be easier to achieve
convergence in relation to substantive rather than procedural - merger regulation.
OECD, Substantive Criteria Used in the Assessment of Mergers, above n 284, 173. See
also SFE Corporation Limited, Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 92, Trade Practices Act Review 2002, 10
(SFE doubts whether a change from the substantial lessening of competition to the
dominance test would make any discernible difference to the likely outcome of the majority
of mergers proposed. ) and Warren Pengilley, Submission to the Review of the
Practices Act Review 2002.
See, for example, Boeing/McDonnell Douglas (IV/M877) [1997] OJ L 336/16 and General
Electric/Honeywell (COMP/M2220) [2004] OJ L48/I. Both proposed mergers were approved
by US authorities but blocked by the EC. General Electric claimed the EC had taken a
fundamentally different approach to its counterparts in the US, Canada and nearly a
dozen other jurisdictions, which approved the acquisition with few, if any conditions: EU
Blocks GE/Honeywell Deal, BBC News (UK), 3 July 2001. See also ICPAC, 'International
Competition Policy Advisory Committee to the Attorney General and Assistant Attorney
General for Antitrust - Final Report' (Department of Justice, United States, 2000), 52-56 and
See also Independent Music Publishers and Labels Association (Impala, International
Association) v Commission of the European Communities (T-464/04) [2006] ECR II-2289.
Chapter3|Page126
possibility has fuelled ongoing debate about which test is or is not the best for
reviewing transnational mergers,306 with an OECD Report307 concluding that there
was no general consensus concerning the overall superiority of either the
dominance or SLC test.308
For purposes of analyzing which test is most appropriate for transnational
mergers it is necessary to clearly define what is sought to be achieved by the
test. The preferred goal of merger laws has been identified as global modern
consumer welfare, with consumer welfare being defined broadly to include not
only price, but a broad range of consumer benefits including quality and
choice.309 Competitive markets are most capable of achieving these consumer
benefits.310 Economic efficiency, while frequently contributing the attainment of
this goal, should be subordinated to the promotion of consumer interest in cases
of conflict.311 Consequently, the substantive merger law should be directed
toward ensuring that mergers do not have a significant negative impact on the
existing competitive market environment. Merger laws should also aim to
minimise false positives. In so doing, a balance must be struck between
constructing a law able to capture most anti-competitive mergers, while also
limiting the potential for type I errors. This is a delicate balance to achieve,
particularly when regard must be paid to the finite resources and time constraints
306
307
308
309
310
311
Although most commentators take the view that the SLC test is likely to capture more
mergers than a dominance test, particularly when the dominance test is combined with a
competition requirement, this view is not universally held, and whether it will be the case in
practice will depend on a number of factors, in particular the size and geographic location of
the relevant economy. For example, Gal suggests that in small economies more mergers
might be caught by a dominance test because of the greater concentration that generally
exists in domestic markets unable to support large numbers of competitors: Gal,
Competition Policy for Small Market Economies, above n 3, 206.
OECD, Substantive Criteria Used in the Assessment of Mergers, above n 284.
OECD, Substantive Criteria Used in the Assessment of Mergers, above n 284, 7.
See chapter 2 at section 2.3.2.
Ibid.
In this respect see further Antitrust Modernization Commission, Report and
Recommendations (April 2007) 26, fn 22: the use of one standard [of consumer welfare]
versus the other often does not change the results of that analysis, and the cases in which
the choice of standard make a difference are relatively few.
Chapter3|Page127
imposed on regulators312 to conduct rigorous economic analysis. However, for

the protection of competition in ambiguous cases, type I errors (false positives)
should be preferred over type II errors when striking that balance, but not to a
significant degree.313
In a global economy it is also important to ensure merger laws are not overtly
nationalistic; promotion of global modern consumer welfare requires that that the
interest of consumers globally, and not merely in the country of the competition
authority, should be considered in determining whether or not a merger should be
prohibited.
3.6.2 Market
Market definition is of central importance regardless of the test applied and there
is a high level of consistency in the national approaches taken to defining the
relevant market for merger analysis.314
Although there is some economic debate regarding the precise application of the
substitution test for delineating markets, there is little real controversy
surrounding the proposition that mergers should be defined as incorporating the
product or service in question and those products or services that are
substitutable for them. The hypothetical monopolist test or SSNIP test is now
312
313
314
See, for example, ICN, 'Report on the Costs and Burdens of Multijurisdictional Merger
Review' (Mergers Working Group, Notification and Procedures Subgroup, November 2004)
13 in which it is observed that mergers are almost always time sensitive; delays may prove
fatal to a transaction ....
Balancing of this nature is frequently struck. Most criminal system, for example, accept a
reasonable error rate when imposing a beyond reasonable doubt requirement on a finding
of guilt, rather than a beyond all doubt level. The beyond reasonable doubt measure is
generally considered acceptable, despite the fact that it will inevitably result in some
innocent persons being convicted, on the basis that a beyond all doubt test would permit an
unacceptable number of guilty persons to escape conviction.
Compare Farrell and Shapiro, above n 22.
Chapter3|Page128
widely adopted315 and is an appropriate means by which the scope of the market
should be determined.
In addition, whether or not a global or national consumer welfare standard is
adopted, it is important that the breadth of the market is defined accurately and
not restricted by national boundaries. Failure to appropriately recognize the true
market dimensions will distort any analysis of competitive effects and will
advance neither national nor global consumer welfare.316
3.6.3 Substantive tests

Dominance
A pure dominance test would permit mergers which would not achieve individual
market dominance.317 Some jurisdictions employing this test extend it to
situations in which the merger leads to joint dominance to capture the possibility
that a proposed merger might increase the prospect of post-merger collusion.318
While it is clear that a pure dominance test will catch fewer mergers319 than a
competition test, it is also generally accepted that even a dominance test which
315
316
317
318
319
Utton observes that there is general agreement that the policymakers are using the correct
analytical approach and that is the hypothetical monopolist approach, first applied to
determine product and then geographic area: Utton, above n 7, 74.
See, eg, Utton, above n 7, 74, who notes that [m]arkets which a relatively short time ago
were correctly identified as extending only up to national boundaries may not span a much
larger region, or even in extreme cases (such as large civil aircraft) the whole world.
It has been observed, for example, that a dominance test will not cover a merger between
the number two and three in the market without them to become a number one, even if it
could be argued that there is at least some level of lessening of competition in the market.
The SLC test applies to this situation provided that the substantial lessening of competition
can be stated: OECD, Substantive Criteria Used in the Assessment of Mergers, above n
284, 171.
See Massimo Motta, Competition Policy Theory and Practice (2004) 271.
For example, under a pure dominance test duopolies would not be captured; this may or
may not be caught under a modified dominance test embracing both unilateral and collective
dominance. See, eg, Coate, above n 187, 14. See also Commonwealth of Australia,
Mergers, Monopolies and Acquisitions: Adequacy of Existing Legislative Controls (Senate
Chapter3|Page129
incorporates joint dominance analysis will normally capture less mergers than a
competition test.320 This is particularly so in those jurisdictions, such as Finland
and Switzerland, where the dominance test is coupled with a competition
requirement, so that only those mergers which simultaneously lead to market
dominance and significantly impede competition will be captured.
It does not necessarily follow that the less inclusive test is necessarily less
desirable,321 particularly where it retains the ability to capture all those mergers
capable of causing significant harm to competition. However, it has been
increasingly recognised that dominance is a poor proxy for competition, requiring
adaptation and manipulation to achieve the desired goals, and that, even with
modification, it is more likely to produce type II errors.
The dominance test is also criticized as placing too much emphasis on the
number of market participants. Where a market is competitive, it is argued, the
preservation of the number of participants should be left to industry policy;
competition law which should focus on competition is not the appropriate
mechanism for the protection of the number of participants.322
320
321
322
Standing Committee on Legal and Constitutional Affairs, Canberra, 1991) (Cooney Report)
48 para 3.110. Although a pure dominance test can be both over-inclusive (where, for
example, the merger leads to a dominant firm without significantly reducing competition,
perhaps because one of the firms would have failed absent the merger) and under-inclusive,
it will more often be under-inclusive. In many cases, however, dominance tests are
combined with a SLC requirement to ensure that these situations are captured.
Although note that the US has sometimes considered the dominance test, as applied in the
EU prior to the 2004 reforms, to be a lower threshold than the SLC test: see Noonan,
above n 9, 61.
It has been observed that even if it is accepted that the SLC test can stop a larger set of
anticompetitive mergers than a dominance test, it does not follow that many mergers fall into
the gap identified, or that they are particularly harmful: OECD, Substantive Criteria Used in
the Assessment of Mergers, above n 284, 9.
See,eg, Dawson Report, above n 25, 67: [W]hile a genuine competitive environment exists,
the preservation of the number of competitors in a market is more a matter for industrial
policy than for competition policy. A concentrated market may be highly competitive.
Chapter3|Page130
National champions for smaller market economies

It is sometimes argued that in small or isolated economies323 firms must be
permitted to reach a certain scale, or critical mass to successfully compete in
global markets324 and that a dominance test may be more capable of
accommodating this need. For example, Gal claims that in small economies
[c]oncentrated market structures might need to become further concentrated to
achieve minimum efficient scales,325 but must not be so permissive as to
entrench monopoly elements in a small economy.326 Others, however, dismiss
the suggestion that national champions are needed for scale or international
competitiveness.327 In his seminal work, The Competitive Advantage of
323
324
325
326
327
See, eg, Michal Gal, Size Does Matter: The Effects of Market Size on Optimal Competition
Policy (2001) 74 University of Southern California Law Review 1437, 1476. Compare Fels,
Persistent Myths, above n 90, 13.
See, eg, Duke Energy, above n 65, 2-3; BP Australia, above n 88, 1; Ron Gilbert, above n
66; Optus, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 17, Trade Practices Act Review 2002, 5; ExxonMobil, above n
82, 6; SFE Corporation Limited, above n 89, 6-7; Commonwealth Bank, above n 82, 7; CSR
Limited, above n 90, 2; Australian Industry Group, above n 65, 48; UBS Warburg Australia,
above n 90, 5; International Chamber of Commerce Australia (ICC), Submission to the
143, Trade Practices Act Review 2002, 23 and Business Council of Australia, above n 25,
12.
Gal, Competition Policy for Small Market Economies, above n 3, 195.
Ibid. Gal suggests that one way to achieve this is for small economies to be more
accommodating of efficiency considerations.
See, eg, AAMI, Submission to the Review of the Competition Provisions of the Trade
Practices Act 1974, Public Submission 69, Trade Practices Act Review 2002, 2; ACCC,
Public Submission 56, Trade Practices Act Review 2002, 16; W Robert McComas,
Public Submission 75, Trade Practices Act Review 2002, 12; Productivity Commission,
above n 139, 47; State Chamber of Commerce (NSW), Submission to the Review of the
Practices Act Review 2002, 3; Fair Trading Coalition, above n 100, 35; Australian Chamber
of Commerce and Industry (ACCI), Submission to the Review of the Competition Provisions
13 & 97; Australian Bankers Association (ABA), above n 138; Commonwealth Consumer
Affairs Advisory Council (CCAAC), Submission to the Review of the Competition Provisions
4; Australian Business Limited, Submission to the Review of the Competition Provisions of
Senator R Boswell, Submission to the Review of the Competition Provisions of the Trade
Chapter3|Page131
Nations,328 Michael Porter329 concluded that there was little or no evidence that
scale is necessary to enable a firm to compete effectively in global markets330
and that instead, international competitiveness is best achieved by the existence
of fiercely competitive domestic rivals.331
Vigorous local competition not only sharpens advantages at home but pressures
domestic firms to sell abroad in order to grow. With little domestic rivalry, firms
are more content to rely on the home market. Toughened by domestic rivalry,
the stronger domestic firms are equipped to succeed abroad. It is rare that a
company can meet tough foreign rivals when it has faced no significant
competition at home. 332
In Australia, which provides an example of both a small and a geographically

isolated country, there have been many small-to-medium sized firms that have
been successful in the global market.333 Relatively small countries such as
328
329
330
331
332
333
Practices Act 1974, Public Submission 129, Trade Practices Act Review 2002, 17; Spier
Consulting Pty Ltd, above n 82, 12; Independent Petroleum Marketers Association Australia,
Public Submission 134, Trade Practices Act Review 2002, 13; Victorian Government, above
n 90, 13; Communications Law Centre, Submission to the Review of the Competition
Review 2002, 1. See also B Clegg and A Hepworth, ACCC Not to Blame for Knocking our
Champions, Australian Financial Review, 19 September 2002 (quoting Ron Malek of the
Caliburn Patnership (I think it is too simplistic to say that competition regulation stifles
Australian companies from building global businesses In some industries, scale is much
more important than others) and Donald Robertson (there is a growing realisation, if not
acceptance, that the so-called national champions argument is a deeply flawed argument.)
Porter, above n 10.
The ACCC in its submission relied heavily on the research of Michael Porter: see ACCC,
above n 327, 142-143.
Porter, above n 10, 117.
Ibid. Professor Porters research led him to conclude that nations with leading world
positions often have a number of strong local rivals. See also G Masterman, Submission to
the Review of the Competition Provisions of the Trade Practices Act 1974, Public
Submission 6, Trade Practices Act Review 2002, 1; ACCC, above n 327, 16;
Commonwealth Consumer Affairs Advisory Council (CCAAC), above n 327, 3; Victorian
Government, above n 90, 13; Canberra Consumer Inc, above n 90, 1; Queensland
Government, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 198, Trade Practices Act Review 2002, 7.
Porter, above n 10, 119 (footnotes omitted).
See, eg, AAMI, above n 327, 2; W Robert McComas, above n 327, 10; State Chamber of
Commerce (NSW), above n 327, 4; Commonwealth Consumer Affairs Advisory Council
(CCAAC), above n 327, 3; Communications Law Centre, above n 327, 7. See also Allan
Fels, Mergers and Market Power, above n 27.
Chapter3|Page132
Switzerland, Sweden and Japan have also achieved leading world positions
notwithstanding the existence of strong domestic competition.334 Even if the
national champions argument has merit domestically,335 it does not fit well with a
global modern consumer welfare goal and a recent report prepared for the OECD
recently observed that the creation, support or protection of national
champions, is indisputably at odds with competition policy.336 Consumers
should not be disadvantaged because firms wish to compete internationally337
and national champions argument should, for these reasons, be rejected.
Certainty
Proponents of a dominance test also often claim that it is more certain than a
competition test.338 Dominance, it is claimed, may be easier to understand, even
if a judge/lawyer/business-person has no economic background.339 This,
however, is less likely where the definition of dominance is expanded to
incorporate collective or joint dominance. Where that is the case, lessening of
competition may be better understood, by virtue of the fact that it is used
elsewhere in competition laws, even if it is more difficult to prove. Consequently,
although certainty is valuable, the dominance test does not appear demonstrably
clearer or simpler than a competition test and, even if it is, it should not be
334
335
336
337
338
339
Porter, above n 10, 117, observing that countries with leading world positions often have a
number of strong local rivals, even in small countries such as Switzerland and Sweden.
Nowhere is the extent of domestic rivalry greater than in Japan .
See OECD Competition Committee, Industrial Policy, Competition Policy and National
Champions (Background Note Prepared by David Spector, Antoine Chapsal and Laurent
Eymard, No DAF/COMP/GF(2009)1/REV1, 16 Feb 2009) 2, acknowledging some
successful examples of industrial policy facilitating national champions.
OECD Competition Committee, above n 335, 2.
See, eg, AAMI, above n 327, 2; State Chamber of Commerce (NSW), above n 327, 3;
Commonwealth Consumer Affairs Advisory Council (CCAAC), above n 327, 4; National
Association of Retail Grocers of Australia (NARGA), above n 100,5; Spier Consulting Pty
Ltd, above n 82, 22; Victorian Government, above n 90, 13; Communications Law Centre,
above n 327, 7.
See, eg, Warren Pengilley, above n 65 and Duke Energy Australia Pty Ltd, above n 65, 2-3.
Alberto Heimler, Was the Change of the Test for Merger Control in Europe Justified? An
Assessment (Four Years After the Introduction of SIEC) (2008) 4 European Competition
Journal 85, 87.
Chapter3|Page133
pursued at the expense of a test better suited to producing the desired welfare
objectives.340
Competition
Mergers which SLC or SIEC (whether or not they also achieve or enhance a
position of market dominance) necessarily increase the market power of the
merged entity beyond that enjoyed by either of the pre-merger parties. This
increased power brings with it the risk that the merged entity will have the ability
to raise prices or reduce output or quality of products or services and also reduce
the choice available to consumers.341
Those countries adopting a competition test take the view that it is possible for
mergers to have significant anti-competitive consequences, notwithstanding the
absence of post-merger market dominance, and therefore adopt a threshold test
based on anticipated competitive consequences rather than market power per se.
The focus on competitive consequences also ensures that the possibility for both
unilateral and co-ordinated post-merger anti-competitive conduct is always
considered.342 Dominance, by contrast, provides an artificial mechanism for
capturing anti-competitive conduct.
One area in which it is sometimes claimed a competition test is deficient is in
relation to creeping acquisitions; while a series of creeping acquisitions which
lead to dominance will be caught at least the merger that tips it over the edge
340
341
342
See, eg, Cooney Report, above n 319, 26, quoting Evidence to Standing Committee on
Legal and Constitutional Affairs, Sub-Committee Workshop on Mergers, Takeovers and
Monopolies, 24 October 1988 (Philip Clarke) 88.
At least in the short term. Merger-generated dynamic efficiencies may result in new
innovation that in fact enhances consumer choice in the mid to long term; but this is very
difficult to predict. See further section 3.6.4, below.
Gal, Competition Policy for Small Market Economies, above n 3, 206. Gal claims this is
more suitable for small economies because a larger percentage of mergers would tend to
lead to or increase dominance.
Chapter3|Page134
will be caught this is not necessarily the case under a competition test.343
Conversely, however, some argue that a competition test may be better equipped
to capture creeping acquisitions, at least where recognition can be given to
cumulative effects.344 There is, as a result, no clear case for preferring a
dominance over a competition test on this ground.
For all of these reasons, consensus appears to be emerging that it is a
competition test that best achieves the objective of modern consumer welfare.
3.6.4 Merger analysis and the role of efficiencies

It is clear from the sample guidelines discussed that national competition
agencies are increasingly adopting a similar analytical approach to guide
assessments of merger-generated competitive effects. This includes
acknowledgment of unilateral and coordinated theories of competitive harm,
thorough consideration of post-merger constraints, including barriers to entry and
even the approach to be taken to failing firm claims. There is also general
consensus that market shares and concentration, while relevant, should not be
considered conclusive.
The approach taken by agencies to efficiencies is also beginning to converge.
As identified in chapter 2, efficiencies are often argued as the sole, or at least
predominant, motivation for competition law policy and merger policy in
343
344
See, eg, Henry Ergas, Doubts about Dawson (Paper presented at the Competition Law
Conference, Sydney, 17 May 2003) and Henry Ergas, Good Report, Pity About All the
Flaws, Australian Financial Review (Sydney), 18 June 2003, 63. Ergas likens creeping
acquisitions to hair loss no one lost hair will make you bald, but if it keeps happening
youre in trouble. Compare Dawson Report, above n 25, 67. See also OECD, Substantive
Criteria Used in the Assessment of Mergers, above n 284, 37.
See, eg, Netherlands in OECD, Substantive Criteria Used in the Assessment of Mergers,
above n 284, 245: the specific market structure and conditions and the freedom of
interpretation of the antitrust authority may be more influential than the question of which
test is applied and OECD, Substantive Criteria Used in the Assessment of Mergers, above
n 284, 38.
Chapter3|Page135
particular.345 It is, therefore, not surprising that anticipated efficiency gains are
often raised by parties to justify a proposed merger, despite concerns about
possible anti-competitive effects.346
While efficiency is not always coextensive with an objective of pursuing global
modern consumer welfare, this will frequently be the case. Merger-generated
efficiencies have the potential to mitigate against use of increased market power
in some cases and to deliver resource savings.347 Where a merger produces
dynamic efficiencies, consumers may benefit from the development of new or
better products and producers might achieve productive efficiencies through
technological advances in production techniques.
Conversely, there is a risk that in some cases mergers may have adverse
consequences for the pace of innovation348or reduce allocative efficiency. Some
empirical studies also suggest that it is unlikely that most mergers enhance
efficiency.349 At a pragmatic level, incorporating efficiencies into merger analysis
is extraordinarily difficult.350
Making a prospective determination about whether a merger will lead to static
efficiencies and how such efficiencies measure up against any anti-competitive
effects that the merger is expected to cause can be very challenging. Dynamic
efficiencies pose an even greater measurement problem than static efficiencies
because dynamic effects will occur if at all over several time periods and may
be more abstract in nature than static effects.351
The task for parties of proving efficiencies is frequently made more difficult by the
fact that many countries, including the US, the UK352 and the EU, require that
345
346
347
348
349
350
351
352
See, eg, Kocmut, above n 273, 1-3 who claims (1) the aim of competition policy is to
promote efficiency and (2) the primary reason for parties to merge is to achieve efficiencies
and (3) efficiencies should play some role in the merger control.
See section 2.2.4, above.
See discussion at page 46, above.
Ibid 9.
Ibid.
Renckens, above n 151, 164
Chapter3|Page136
efficiencies be verifiable and produce benefits for consumers.353 There does not
appear to be any recognised measure for verifying anticipated dynamic
efficiencies354 and proof of anticipated merger-generated static efficiencies is also
difficult. Consequently, while the theoretical benefits of efficiencies are
increasingly recognised, the limitations of proof mean that it remains rare that an
otherwise anti-competitive merger will be justified on efficiency grounds.355
In some countries efficiencies are a factor for consideration not only as part of a
competition analysis, but also as a possible defence; in other words, in some
countries it is possible for a merger to be cleared, notwithstanding an anticipated
significant reduction in competition, where anticipated efficiencies exist that are
so great as to outweigh the negative consequences of the lessening of
competition.356
Even if accepted that efficiencies may be both welfare enhancing and welfare
reducing and that it is likely there are only a limited number of circumstances in
which an otherwise anti-competitive merger will achieve efficiencies sufficient to
limit or prevent those anti-competitive consequences, the ability of some mergers
353
354
355
356
Utton, above n 7, 76-77. See also OECD, Dynamic Efficiencies in Merger Analysis, above n
36, 1. Compare Renckens, above n 151, 162, observing that the requirement that
efficiencies be passed on to consumers in the US is becoming less strict. Similarly,
Belgium, Finland, France, Germany, Hungary, Iceland, Spain and Switzerland all require
efficiencies to benefit consumers before they will be considered as part of the competition
analysis. This is not a requirement in Canada, where the efficiency defence focuses on a
total surplus outcome.
See, for example, Renckens, above n 151, 161 observing that in Europe no cases have yet
been cleared purely on efficiency grounds. Similarly (at 161) Renckens observes that in the
US, in most cases where efficiencies were considered important, they most often have been
found insufficient to counterbalance the negative effects of the merger.
This is overtly the case in Canada, where s 96(1) of the Competition Act 1985 provides that
the Tribunal shall not prohibit a merger where the proposed merger would bring about gains
in efficiency that will be greater than, and will offset, the effects of any prevention or
lessening of competition ..., provided those efficiencies would not be attained absent the
merger. This may also indirectly be the case in Australia, where proof of public benefit
(which might include certain efficiencies) that outweigh anticipated anti-competitive
detriment provides grounds for authorization of a merger. See generally Renckens, above n
151 and Lin Bian and DG McFedtridge, 'The Efficiencies Defence in Merger Cases:
Implications of Alternative Standards' (2000) 33 Canadian Journal of Economics 297.
Chapter3|Page137
to generate this level of efficiencies justifies their consideration as part of a

merger analysis.
Efficiencies should form part of a competition assessment, rather than a defence,
and should only be accepted where verifiable, merger-specific and likely to be
passed on to consumers, whether through reduced costs or other, less tangible,
benefits. Although verifying efficiencies, particularly dynamic efficiencies, is a
difficult task, this onus is appropriately placed on merging parties in cases where
their merger would otherwise result in a significant reduction in competition and,
for this reason, is a requirement in most OECD states.357 The requirement that
efficiencies be merger-specific, in that they would not have been achieved absent
the merger, is also common to existing merger guidelines which generally values
competition over economic efficiency gains in cases of conflict and is a
reasonable and non-controversial requirement. The third requirement, that
efficiency gains be passed on to consumers, is appropriate to support a modern
consumer welfare objective. The passed on benefits need not necessarily be in
the form of reduced prices; for example, consumers may benefit through product
innovation, even in cases where product prices remain static or even increase.
The final requirement, that efficiencies form part of a competition assessment,
rather than a separate defence, is also consistent with a modern consumer
welfare approach to merger regulation358 and is consistent with the procedural
approach currently adopted in most OECD states.
357
358
Renckens, above n 151, 168.

For example, De la Mano argues that an efficiency defense would only be valid under a
total surplus approach, which allows offsetting consumers losses against producers gains:
Miguel de la Mano, 'For the Customer's Sake: The Competitive Effects of Efficiencies in
European Merger Control' (European Commission Enterprise Papers No 11, 2002) as
paraphrased in Renckens, above n 151, 170. Renckens disagrees, however, arguing the
difference between the efficiency defense and efficiency rebuttal ... merely lies in the
procedural dimension.
Chapter3|Page138
3.6.5 Summary of conclusions

The conclusions of this chapter may be summarised as follows:
Market definition should be determined by use of the HMT test and should
not be artificially constrained by national borders.
A competition test (whether in the form of SLC or SIEC) is the most suited
to achieving the objective of modern consumer welfare and different tests
are not needed for different economies.
Analysis of mergers pursuant to a competition test should invoke sound

economic theory and consider both unilateral and coordinated market
power theories of harm.
Market shares and concentration might provide a useful initial screening

process, but should not constitute determining factors. In this respect,
appropriate recognition should be given to factors such as low barriers to
entry (including the possibility of increased import competition) and
capacity for the expansion of existing firms that would limit the ability of
the merged party to take advantage of post-merger increases in market
share or concentration.
In ambiguous cases, type I errors (false positives) are to be preferred over

type II errors.
Efficiencies are an important and appropriate factor for consideration as

part of a competition assessment. To justify an otherwise anti-competitive
merger, efficiencies, whether static or dynamic, must be verifiable,
merger-specific and must be passed on to consumers in such a way as to
prevent the anti-competitive consequences that would result absent the
proof of efficiencies.
Chapter3|Page139
Chapter 4 The procedural approach to merger

regulation in OECD countries
4.1 Introduction
An increasing convergence in the substantive merger law and analytical
approach to merger assessment has had little impact on the myriad of procedural
requirements with which parties are required to comply. It is clear that mergers
have a unique place in competition policy regulation. This stems predominantly
from their public nature, which makes pre-merger assessment possible, and the
difficulty in correcting the structural damage to the market caused by anticompetitive mergers, making detection and prevention of anti-competitive
mergers in their incipiency particularly desirable.1
Consequently, it is not surprising that PMN regimes have emerged to support the
enforcement of substantive merger laws. This generally takes one of two forms;
a mandated formal clearance process which prohibits the consummation of a
merger without first obtaining clearance2 or a voluntary system in which parties
are free to merge without clearance, but may choose to obtain a formal or
informal view about the legality of their merger prior to consummation.
Most OECD countries have opted for a mandatory PMN regime3 to provide
regulators with the opportunity to evaluate mergers prior to consummation. In
1
2
See chapter 2 section 2.4.2

Clearance may be formal, in that it provides protection against subsequent action against
the merger, or informal in that relevant waiting periods for closing end without the
regulators challenging the merger.
Many other countries have also opted for a mandatory ex ante review of mergers; in 2005 it
was estimated at least 73 countries had adopted a system of ex ante merger review:
Jonathan Galloway, Convergence in International Merger Control (2009) 5 The Competition
Law Review 179, 180-181; ICN, 'Merger Notification Filing Fees' (Mergers Working Group,
April 2005) 2.
Chapter4|Page140
only three OECD4 countries notification is optional, although even in these

jurisdictions, firms especially those involved in large transnational mergers
frequently utilize the voluntary notification option available to them.
TABLE 4.1
PRE-MERGER NOTIFICATION REQUIREMENTS FOR MERGERS 2010
Mandatory
Austria*
Belgium*
Canada
Czech Republic*
Denmark*
Finland*
France*
Germany*
Greece*
Hungary*
Iceland
Ireland*
Italy*
Japan
Korea
Mexico
Netherlands*
Norway
Poland*
Portugal*
Slovakia*
Spain*
Sweden*
Switzerland
Turkey
USA
Voluntary
None
Australia
New Zealand
United Kingdom*
Luxembourg*
European Union
* Denotes EU
Member State
In most jurisdictions whether voluntary or mandatory the processes in place

have been amended or reviewed in recent years and many are subject to regular
change. This is the case even in countries having long-established merger
regimes, such as the US5 and Canada.6 In nearly all cases the notification
Australia, New Zealand and the UK and, since its entry into the OECD in January 2010,
Chile.
The change is not always substantial, but, particularly in relation to notification thresholds, it
occurs with sufficient frequency to require corporations and their advisors to continually
monitor developments.
See, eg, Canadas New Merger Control Law (14 January 2010) Competition Law Canada
<http://www.ipvancouverblog.com/2010/01/merger-control-in-canada/> at 22 January 2010.
Canada adopted new procedural rules designed to bring them more in line with the
approach taken in the United States. See also Steve Szentesi, Convergence & Canada's
New Merger Control Law (2009) Competition Law Canada
Chapter4|Page141
requirements are technical and complex and vary, at least subtly, but often
substantially, between jurisdictions.7
Outside the OECD, many more merger control regimes have been established
recently or are proposed, perhaps most significantly in China and India,8 with the
number of countries now adopting some form of merger control estimated at
110.9
It is, therefore, in this area of procedural compliance, more acutely than for
substantive compliance, that corporations involved in transnational mergers (and
their lawyers) must maintain a current awareness of the often technical
procedural rules, not only in their home country, but in a multitude of other
jurisdictions.10 Failure to comply with these obligations may jeopardize a merger
or at least result in substantial fines11 even if that merger has no prospect of
contravening the substantive laws. Some claim that existing threshold
10
11
<http://www.ipvancouverblog.com/2009/10/torontocompetitionlaw-6/> at 19 November 2009

and Competition Policy Review Panel, Compete to Win (Final Report, Canada, June 2008).
See ICN, 'Recommended Practices for Merger Notification Procedures' (Merger Working
Group 2002, amended 2003, 2004, 2005, 2006), Working Group Comment 1 to
Recommendation III(B).
Competition Act 2002 (India), s 5-6 (this prevents a notified merger coming into effect until
210 days after notification, unless approved sooner), Anti-monopoly Law of the Peoples
Republic of China (adopted 30 August 2007), Chapter IV, requiring declaration of mergers
above sertain thresholds. See also Mallesons Stephen Jaques, Chinas Merger Control
Laws an Event of Olympic Proportions (Alert, 22 August 2009).
See John Arden, Record Number of Jurisdictions Regulate Mergers, New Aspen Publicatoin
Finds (8 January 2009) Trade Regulation Talk
<http://traderegulation.blogspot.com/2009/01/record-number-of-jurisdictions-regulate.html>
at 21 January 2010.
See Richard Whish, Competition Law (6 ed, 2009) 801-802.
For example, the European Commission recently fined Electrobel EUR 20 million for failing
to obtain Commission approval before obtaining a controlling interest in Compagnie
Nationale du Rhne. The fine was imposed notwithstanding the fact that the acquisition did
not raise competition concerns, although this fact was taken into consideration in setting the
fine: European Commission, Mergers: Commission Fines Electrobel 20 Million Euros for
Acquiring Control of Compagnie Nationale du Rhne without Prior Commission Approval,
(Press Release IP/09/895, 10 June 2009). In the US, the FTC recently imposed a $1.4m
Civil Penalty against the CEO and Chairman of Discovery Holding Company for premerger
notification violations: Federal Trade Commission (US), FTC Obtains $1.4 Million Civil
Penalty for Premerger Filing Violations (Press Release, 23 June 2009).
Chapter4|Page142
requirements cast too wide a net and that this is evidenced by the fact that the
vast majority of notified mergers do not raise competition concerns for the
relevant authorities.12 Others claim the thresholds and notification requirements
are necessary to capture most anti-competitive mergers and enable authorities to
make a reasonable evaluation of them prior to consummation.13
The increasing size, complexity and geographic reach of mergers in the last
decade,14 combined with the expense15 and complexity of procedural obligations,
have generated persistent calls for the reform of merger notification procedures
around the world.16 Although it is widely acknowledged that, particularly in the
last decade, great progress has been made in increasing harmonization of both
substantive and procedural merger obligations, the volume of regulation involved
and the time and resources expended in compliance, warrant continuing efforts to
ensure that over-regulation does not occur to the detriment of global modern
consumer welfare.
12
13
14
15
16
While it seems intuitively accurate to suggest that low financial thresholds are responsible
for the high proportion of notifiable mergers which are not considered to be harmful to
competition, this is not necessarily the case. Where the defined market is a small one,
competitive harm might still be great within that market despite relatively small turnover
values. However, the reduction in thresholds in the US following the release of the ICPAC,
'International Competition Policy Advisory Committee to the Attorney General and Assistant
Attorney General for Antitrust - Final Report' (Department of Justice, United States, 2000)
resulted in a drastic reduction of mergers notified to the DOJ, from 4,926 in 2000 to 2,376 in
2001 and down to 1,187 in 2002: Department of Justice, Antitrust Division Workload
Statistics FY 1999-2008 <http://www.justice.gov/atr/public/workstats.pdf> at 28 January
2010.
See generally ICN, 'Setting Notification Thresholds for Merger Review' (Merger Working
Group, Notification and Procedures Subgroup, Report to the ICN Annual Conference, Kyoto,
Japan, April 2008).
Whish, above n10, 801.
See, for example, Joe Sims, Robert C Jones and Hugh H Hollman, 'Merger Process Reform:
A Sisyphean Journey?' (2009) 23 Antitrust 60, 60 who note that the average cost of a
Second Request in the US alone is between $5-$10 million. See further chapter 8.
See, eg, Brendan Sweeney, 'Global Competition: Searching for a Rational Basis for Global
Competition Rules' (2008) 30 Sydney Law Review 209, 209. See also J William Rowley,
'Merger Reform Needs Words and Action' (2003) 6 Global Competition Review 18 and J
William Rowley and A Neil Campbell, 'Multi-Jurisdictional Merger Review - Is it Time for a
Common Form Filing Treaty?' in Policy Directions for Global Merger Review, a Special
Report by the Global Forum for Competition and Trade Policy (1999) 9.
Chapter4|Page143
This chapter will evaluate the existing procedural regimes divided broadly into
mandatory and voluntary regimes and assess the different threshold tests
(including jurisdictional nexis requirements, timing requirements, information
requirements and costs) that apply to each. The merits (or otherwise) of each
regime will be analysed and tentative conclusions reached about the most
appropriate method for procedural regulation of potentially anti-competitive
transnational mergers. Part IV will examine the cost of the current regulation of
transnational mergers.
4.2 Mandatory pre-merger notification regimes

Legislators and regulators have increasingly taken advantage of the public nature
of mergers to impose notification requirements which allow for their ex ante
evaluation. Since their development in the US in the mid 1970s, PMN regimes
have proliferated around the world17 and are now adopted in more than 70
countries,18 including 26 OECD countries. Seventeen of these OECD countries
are also EU member states, with the result that where a merger has an EU
dimension notification must be given to the EC, rather than to national
authorities.19
The two most established and most internationally significant merger control
regimes operating a mandatory notification scheme are the US and the EU. For
17
18
19
Choe Chongwoo and Chander Shekhar, 'Compulsory or Voluntary Pre-merger Notification?

Theory and Some Evidence' (Working Paper No 13450, MPRA Paper, 2009) 1.
A recent survey concluded that there are now 68 nations that regulate mergers, 49 of which
require pre-merger notification: White & Case LLP, White & Case Global Merger-Control
Survey Finds Flood-Tide May Be Ebbing After Years on the Rise (Press Release, 16
January 2003). More recently it has been estimated at least 73 countries have adopted a
system of ex ante merger review: Jonathan Galloway, Convergence in International Merger
Control (2009) 5 The Competition Law Review 179, 180-181 This number is likely to
increase as more nations consider introducing competition laws.
In addition, although the UK operates a voluntary PMN scheme, most multi-jurisdictional
mergers, even if emanating in the UK, will nevertheless meet the threshold requirements of
the EU merger regulation and therefore be subjected to a mandatory PMN requirement.
Chapter4|Page144
this reason, they will be examined in detail. The US system was established in
1976 and often forms the model for new and developing merger control
regimes.20 The EU system was developed more recently, first coming into
operation in 1990, and is similar, but not identical, to the US system.
Administratively it operates very differently, in part necessitated by its supranational operation. For most large transnational mergers it also effectively
replaces the individual notification requirements of 27 EU Member States,
including 19 OECD Member States, and is, therefore, of considerable importance
in any evaluation of the merger processes operating in the OECD.
4.2.1 United States

The US introduced a compulsory advanced notification system for proposed
mergers in 1976 with the passage of the Hart-Scott-Rodino Act21 (the HSR).
The purpose of this process was to give regulators a minimum period of time,
prior to the conclusion of substantial mergers, to enable the antitrust agencies to
seek an injunction before a potentially anti-competitive merger was
consummated. 22 The congressional intent was,23 and remains, to arrest mergers
at a time when the trend to a lessening of competition was still in its
incipiency.24
20
21
22
23
24
ongwoo an Shekhar, above n 17, 1: The dominant pre-merger notification model follows the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (modified in 2000) of the United
States (HSR Act).
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a.
Chongwoo and Shekhar, above n 17. See also Sims, Jones and Hollman, above n 15, 61
(citing122 Cong Rec 30,877 (1976)).
Consistent with the theory behind PMN requirements, the Guidelines expressly state that
they reflect the congressional intent that merger enforcement should interdict competitive
problems in their incipiency: Department of Justice and Federal Trade Commission,
Horizontal Merger Guidelines (issued 1992; revised 8 April 1997) 3, 0.1.
Brown Shoe Co v United States, 370 US 294 (1962), 317.
Chapter4|Page145
The HSR Act and the myriad of implementing regulations that have developed to
support it do, however, present a complex and somewhat technical body of law25
that must be understood, not only by domestic companies and their advisors, but
increasingly by foreign companies whose mergers may impact on the US
economy.
Administrative structure
Two federal agencies have concurrent jurisdiction to receive pre-merger
notifications and conduct investigations under the HSR Act. In addition, state
attorneys general may also the power to require notification of certain mergers
pursuant to state law.
The two federal agencies responsible for merger review are the FTC and the
DOJ(AD) (the Agencies) and their enforcement budgets are funded (at times
exclusively) from merger filing fees.26 Both Agencies must be notified of mergers
meeting certain threshold criteria prior to consummation. The process is
simplified by an arrangement, pursuant to which the FTCs pre-merger
notification office is given responsibility for administering the HSR premerger
notification program for both the FTC and the DOJ(AD).27 The consequence of
this arrangement for the parties is that they need only notify the FTC in order to
satisfy their federal legislative notification requirement.
25
26
27
Malcolm R Pfunder, Twenty Years of Hart-Scott-Rodino Merger Enforcement: Some

Reflections on, and Modest Proposals for Reform of, the Hart-Scott-Rodino Premerger
Notification Program (1997) 65 Antitrust Law Journal 905. See also ABA Section of Antitrust
Law, The Merger Review Process: A Step-By-Step Guide to Federal Merger Review (3rd ed,
2006) and ABA Section of Antitrust Law, Premerger Notification Manual (4th ed, 2007).
This was the case, for example, in 2000: ICPAC Final Report, above n 12, 14.
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 23.
Chapter4|Page146
FIGURE 4.2 UNITED STATES ADMINISTRATIVE AND JUDICIAL

STRUCTURE FOR MERGER REVIEW
Court
FTC
Bureauof
Economics
DOJ(AD)
Bureaof
competition
MergerDivisions
State
PreMerger
NotificationUnit
MergerSpeciality
areas
PreMerger
Notification
Office
The FTC is an independent administrative body, capable of making some of its

own rulings.28 Within the FTC the two Bureaus responsible for merger
investigation are the Bureau of Competition, which includes several merger
divisions responsible for mergers relating to particular industries,29 and the
Bureau of Economics which is responsible for the economic analysis of mergers.
The DOJ(AD) is an executive department of the US Government. It is also
divided into a number of sections having industry specialty. It operates a Premerger Notification Unit which receives copies of all HSR filings made to the FTC
following notification by the parties.
In practice, the Agencies decision on mergers notified to them will determine
whether a merger will proceed in original or modified form or be abandoned. The
28
29
It must, however, seek intervention from the court in order to block a merger: Sims, Jones
and Hollman, above n 15, 61.
Chapter4|Page147
Agencies do not formally approve or clear mergers. However, if they are

confident the merger raises no serious competition concerns, they will refrain
from taking action against the parties during the PMN waiting period. After the
expiration of that period30 the parties may proceed with the merger without facing
penalties for failing to comply with the notification requirements and, while not
immune from subsequent legal challenge (either by the Agencies or interested
third parties), can be reasonably confident that their merger will not be the subject
of a future challenge.
The US federal court system sits on top of the FTC and DOJ (AD) in the
administration of merger laws. While the FTC is capable of making some of its
own administrative rulings, the DOJ (AD) must always apply to a federal court to
obtain an injunction if it wishes to prevent a merger from proceeding after the
notification waiting period has elapsed. Only the court has the power to issue
interim injunctions to prevent a merger proceeding after the notification waiting
period has expired but before a final determination has been reached.
Although the Federal Court has the ultimate power to determine whether or not a
merger or proposed merger contravenes the substantive law, a by-product of the
mandatory notification system is that, since its introduction, little judicial case law
has developed on merger law.31 Instead, parties rely predominantly on opinions
of the Agencies and not the courts to determine whether or not to proceed with a
merger, or to proceed with modification.32 There remains some litigation for
30
31
32
The waiting period is 30 days after receipt of a completed notification, but the Agencies may,
in some cases, terminate the waiting period within this time frame: Hart-Scott-Rodino
Antitrust Improvements Act, 15 USC 18a.
See generally Steven C Sunshine and John R Seward, Mergers and the Courts in the
United States in Hawk, Barry (ed), International Antitrust Law and Policy: Proceedings of
the 35th Annual Fordham Competition Law Institute Conference on International Antitrust
Law & Policy (2008) 183.
William J Baer, 'Twenty Years of Hart-Scott-Rodino Merger Enforcement: Reflections on
Twenty Years of Merger Enforcement Under the Hart-Scott-Rodino Act ' (1997) 65 Antitrust
Law Journal 825, observing that almost all merger law today is reflected in consent decrees
rather than a fully articulated decision based on a complete trial record. See also Sunshine
and Seward, above n 31, 183.
Chapter4|Page148
mergers which do not meet threshold notification requirements but nevertheless

raise concerns for the Agencies,33 and these provide some limited guidance for
parties.
In addition to the federal Agencies, state attorneys general have power to
investigate and bring enforcement action in relation to both federal and, in some
cases, state merger laws.34 To co-ordinate this overlapping jurisdiction, a joint
protocol has been released which provides a general framework for the conduct
of joint investigations with the goals of maximizing cooperation between the
federal and state enforcement agencies and minimizing the burden on the
parties.35
Monetary and jurisdictional threshold requirements for notification
The HSR Act requires parties to notify proposed mergers which exceed certain
threshold requirements and are not captured by an exemption.36 The threshold
provisions for notification in the HSR remained static for almost 25 years until, in
2000, the International Competition Policy Advisory Committee (ICPAC)37
recommended that they be revised to ensure that the US authorities are notified
only of transactions with a nexus to the jurisdiction38 and that they be adjusted
33
34
35
36
37
38
For those mergers falling outside the notification threshold but which nevertheless raise
competition concerns, there is no voluntary option for notification open to the parties; many
of these mergers are challenged post-consummation and this has led to recent calls for the
introduction of a voluntary notification system for mergers falling outside the mandatory
scheme: see Robert B Bell, Voluntary HSR Filings: A Modest Proposal (2009) 23 Antitrust
69.
This takes the form of injunctive relief and/or damages pursuant to the Clayton Antitrust Act
1914, 15 USC 15 and 26.
Protocol for Coordination in Merger Investigations Between the Federal Enforcement
Agencies and the State Attorneys General (Compact). See also ABA Section of Antitrust
Law, The Merger Review Process, above n 25, 17.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a.
ICPAC Final Report, above n 12.
ICPAC Final Report, above n 12, 13.
Chapter4|Page149
for inflation.39 In accordance with the annual revision of thresholds mandated by

the HSR Act,40 these thresholds have recently changed.41
The current threshold requirements incorporate both a jurisdictional requirement
and a financial requirement, both of which must be met before notification is
required. The jurisdictional test requires that at least one of the parties is
engaged in commerce or in any activity affecting commerce42 in the United
States,43 and the financial requirement test applies in respect to both the size of
the transaction involved and, in some cases,44 to the size of the parties
involved.45
There are also a number of exemptions to notification which include acquisitions
of goods and realty transferred in the ordinary course of business46 and certain
39
40
41
42
43
44
45
46
This occurred in 2001 and the volume of mergers notified each year has been dramatically
reduced as a result. In 2000, 4,926 mergers were notified to the DOJ; this dropped to 2,376
in 2001, following the threshold adjustment: Department of Justice, Workload Statistics FY
1999-2008, above n 12.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(a)(2)(A).
See Federal Trade Commission (US), Commission Announces Revised Filing Thresholds
for Clayton Act Antitrust Reviews (Press Release, 19 January 2010). Because threshold
level adjustments are based on gross national product, for the first time since the changes to
the threshold requirement in 2001, the thresholds were adjusted downward, highlighting the
significant impact of the global financial crisis on the US economy.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(a)(1).
Although the words in the United States do not appear in the legislation, commerce has
been interpreted to mean commerce in the United States: see, eg, ABA Section of Antitrust
Law, The Merger Review Process, above n 25, 10 and Ronan P Harty, United States in
John Davies (ed), Merger Control 2009: The International Regulation of Mergers and Joint
Ventures in 64 Jurisdictions Worldwide, Getting the Deal Through (2008) 381.
This is required where the size of the transaction is valued at between US$63.4m and
$253.7m, but where the size of transaction exceeds $253.7m the size of parties test is
eliminated: ABA Section of Antitrust Law, The Merger Review Process, above n 25, 10, as
adjusted for 2010: Federal Trade Commission, Commission Announces Revised Filing
Thresholds, above n 41.
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 10. The party size
thresholds are US$126.9m in annual sales and US$12.7m in total assets: Federal Trade
Commission, Commission Announces Revised Filing Thresholds, above n 41 and W
Stephen Smith, Aki Bayz and Tej Srimushnam, New Lower HSR Thresholds Announced
(January 2010) Morrison | Foerster <http://www.mofo.com/news/updates/files/16399.html>
at 22 January 2010.
See also Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(c)(1). See
further ABA Section of Antitrust Law, The Merger Review Process, above n 25, 11.
Chapter4|Page150
acquisitions of securities made solely for investment purposes.47 The regulations

specifically prohibit transaction(s) or other device(s) entered into or employed for
the purpose of avoiding48 compliance with the HSR requirements.
Mergers falling below thresholds do not have the option for notification, but
remain subject to substantive laws.49
Cost of filing
The HSR Act imposes a fee for filing notification and these fees account for the
majority of the funding of the Agencies.50 Filing fees vary depending on the size
of the transaction and range from US$45,000 for the smallest notifiable
transactions (those with a value of at least US$53.1m) up to a maximum of
$280,000 for those transactions with a value of US$530.7m or more.51
Form, information and language requirements
A specified form, the Notification and Report Form,52 must be used when
notifying the Agencies. This form also provides guidance on the requirements
within and is now able to be submitted both in paper and electronic form. The
form requires parties to provide substantial information, including:
47
48
49
50
51
52
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(c)(9). See also and
Harty, above n 43, 381-382 and ABA Section of Antitrust Law, The Merger Review Process,
above n 25, 11.
Rules, Regulations, Statements and Interpretations Under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, 16 CFR 801(90) (2005). See also ABA Section of Antitrust
Law, The Merger Review Process, above n 25, 12.
See, for example, US v Microsemi Corporation (Civil Action No 1:08cv1311), in which the
DOJ challenged the acquisition by Microsemi of assets of Semicoa, despite the merger not
meeting the notification thresholds. The matter is likely to be settled by consent decree:
United States Department of Justice, United States v Microsemi Corporation
<http://www.justice.gov/atr/cases/microsemi.htm > at 29 January 2010.
See Federal Trade Commission, Hart-Scott-Rodino Premerger Notification Program
<http://www.ftc.gov/bc/hsr/index.shtm> and ABA Section of Antitrust Law, The Merger
Review Process, above n 25, 9 fn 31.
Federal Trade Commission, The Form and Instructions (2008) Hart-Scott-Rodino PreMerger
Notification Program <http://www.ftc.gov/bc/hsr/hsrform.htm> at 30 January 2010.
Chapter4|Page151
submission of certain basic information concerning the parties to the transaction

and the structure of the transaction, information concerning each partys
revenues by North American Industrial Classification System codes, copies of
certain Securities and Exchange Commission filings and annual reports,
information concerning prior relevant acquisitions, and certain certifications. Most
significantly, each party must submit with the Form copies of any documents that
have been prepared in connection with the transaction, by or for any officer or
director, and that analyze the transaction with respect to market shares,
competition, competitors, markets, potential for sales growth or expansion into
product or geographic markets .53
Adherence to the specific requirements of the form is essential and the 30 day
waiting period (prior to which the merger cannot be consummated) does not
begin to run until substantial compliance with those requirements has
occurred.54 This requirement is aggressively enforced by the Agencies. 55 In
addition to the mandatory information requirements, parties may choose to
supply any other information they believe will be helpful.56 All documents must be
submitted in English57 and at least four copies plus an original must be
supplied.58 Failure to comply with the filing requirement (including failing to file a
particular document) is punishable by a civil penalty of up to $11,000 per day and
equitable relief as deemed necessary or appropriate by the court.59 Where
53
54
55
56
57
58
59
Improvements Act of 1976, 16 CFR 803.10(a) (2005) provides: The waiting period required
by the act shall begin on the date of receipt of the notification required by the act, in the
manner provided by these rules and at: 803.2(f) the use of any format or size not
specified as acceptable, or any other failure to comply with the applicable format
requirements, shall render the entire filing deficient within the meaning of 803.10(c)(2).
Improvements Act of 1976, 16 CFR 803.1(b) (2005).
Improvements Act of 1976, 16 CFR 803.8 (2005).
An original and one copy will be directed to the FTC and three copies will be sent to the
DOJ: Rules, Regulations, Statements and Interpretations Under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, 16 CFR 803 Annex (Notification and Report Form).
See also ABA Section of Antitrust Law, The Merger Review Process, above n 25, 102.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(g). The sum set out in
legislation is $10,000, but this has been increased and adjusted for inflation: see ABA
Section of Antitrust Law, The Merger Review Process, above n 25, 13.
Chapter4|Page152
parties have failed to comply, the agencies have not hesitated to seek significant
penalties.60
Process and waiting periods
Parties required to notify the Agencies of their proposed merger may do so any
time after signing a letter of intent and before closure.61 As already indicated,
notification must be made by both parties to both Agencies, but the obligation is
satisfied by notifying the FTC which will relay the information to the DOJ.62
Consummation of the merger must not take place before the expiry of an initial
thirty day waiting period following notification, during which the Agencies will
determine whether further investigation of the proposed merger is warranted.63
Each notification will first be assigned for initial review to the relevant section or
division of each Agency having expertise in the relevant industry.64 If it is
determined that further investigation is warranted then a clearance process
determines which agency will conduct the investigation.65 Most notified mergers
are not cleared by either agency and may proceed without further investigation
60
61
62
63
64
65
Harty, above n 43, 382 observing that the agencies have obtained fines on five occasions
during the last four fiscal years, ranging from US$250,000 to US$2million.
See Harty, above n 43, 382.
These procedures are set out in Hart-Scott-Rodino Antitrust Improvements Act 1976, 15
USC 18a.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(b). See also discussion
on exemptions to this in ABA Section of Antitrust Law, The Merger Review Process, above n
25, 8.
See ABA Section of Antitrust Law, The Merger Review Process, above n 25, 26 and Federal
Trade Commission Premerger Notification Office, Introductory Guide I: What is the
Premerger Notification Program? An Overview (Revised March 2009) 11.
FTC Premerger Notification Office, above n 64, 11. ABA Section of Antitrust Law, The
Merger Review Process, above n 25, 27. For a critique of the clearance process see
Comments on the FTC-DOJ Clearance Process before the Antitrust Modernization
Commission, 3 November 2005 (Timothy J Muris)
<http://govinfo.library.unt.edu/amc/commission_hearings/pdf/Muris_Statement.pdf> at 30
January 2010.
Chapter4|Page153
after the expiry of the waiting period, or sooner if the Agencies grant early
termination of the relevant waiting period.66
If a matter is cleared to one of the Agencies the parties will be notified that an
investigation has been opened.67 Generally the investigating agency will then
ask parties to provide certain information to assist the review.68 Most mergers do
not proceed beyond this stage.69 However, where competitive concerns are not
resolved during this initial waiting period, the investigating agency may issue a
Request for Additional Information or Documentary Materials,70 referred to as a
Second Request form. This request also has the effect of extending the waiting
period a further thirty days after compliance with the second request.71
66
67
68
69
70
71
Early termination if frequently granted: See ABA Section of Antitrust Law, The Merger
Review Process, above n 25, 9 fn 29: in 2003, 86% of mergers notified were granted early
termination. See also: Federal Trade Commission and Department of Justice, Hart-ScottRodino Annual Report Fiscal Year 2008: Section 7A of the Clayton Act, Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (Thirty-first Annual Report) (2008) 5, noting that in fiscal
year 2008 clearance was granted for purpose of initial investigation to only 17.7% of HSR
transactions.
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 27 and FTC
Premerger Notification Office, above n 64, 12.
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 27 and FTC
Premerger Notification Office, above n 64, 11.
For example, in 2001, 2,376 transactions were notified and only 70 second stage requests
were issued: Casey Cogut (ed), Getting the Deal Through, Mergers & Acquisitions in 48
Jurisdictions Worldwide 2003 (2003) 12. In fiscal year 2008, of 1,726 transactions reported,
41 were subject to second requests: Federal Trade Commission and Department of Justice,
Hart-Scott-Rodino Annual Report Fiscal Year 2008: Section 7A of the Clayton Act, HartScott-Rodino Antitrust Improvements Act of 1976 (Thirty-first Annual Report) (2008) Exhibit
A, Table 1. See also Robert D Paul, 'The Increasing Maze of International Pre-Acquisition
Notification' (2000) 11 International Company and Commercial Law Review 123.
Improvements Act of 1976, 16 CFR 803.20 (2005). See also FTC Premerger Notification
Office, above n 64, 12-13 and ABA Section of Antitrust Law, The Merger Review Process,
above n 25, 10.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(e)(2). See also ABA
Section of Antitrust Law, The Merger Review Process, above n 25, 27-28, for a discussion of
what is meant by compliance in this context..
Chapter4|Page154
Compliance with these onerous requirements can often take several months and
costs to the parties can reach into the millions.72 Reforms introduced by both
Agencies in 2006, which were designed to reduce the length and burden of
Second Request investigations,73 including formalizing well-defined best
practices designed to facilitate rapid identification of the relevant issues,
preparation of more focused second requests, and use of consistent investigation
timetables74 appear to have been largely unsuccessful in reducing the time frame
for compliance and review.75
Where a filing whether an initial filing or second request filing is found to be
deficient the Agencies can require parties to re-file which re-starts the HSR
waiting period and can occur at any stage, so that an original deficient filing,
which is only found to be defective late into a second stage investigation, may
result in the Agencies requiring re-filing which begins the initial waiting period
again, after which the Agencies can make a new second request.76
During the thirty-day extended waiting period, which is often further extended
voluntarily by the merging parties to afford time for meetings between these
officials and the parties77
72
73
74
75
76
77
See, for example, PriceWaterhouseCoopers, 'A Tax on Mergers? Surveying the Time and
Costs to Business of Multi-jurisdictional Merger Reviews' (June 2003) 4. See also Sims,
Jones and Hollman, above n 15, 60 which notes the average cost of notification where a
second request investigation is initiated is $5m with a time frame of between 6 and 7
months.
Sims, Jones and Hollman, above n 15, 62.
'Reforms to the Merger Review Process: Announcement by Deborah Platt Majoras,
Chairman, Federal Trade Commission' (16 February 2006)
<http://www.ftc.gov/os/2006/02/mergerreviewprocess.pdf > at 16 February 2006. See also
Department of Justice, Merger Review Process Initiative (12 October 2001, Revised 4
August 2004 and 14 December 2006) <http://www.usdoj.gov/atr/public/220237.pdf> 20
January 2010 and Sims, Jones and Hollman, above n 15, 67, fn 20.
Sims, Jones and Hollman, above n 15, 62.
See ABA Section of Antitrust Law, The Merger Review Process, above n 25, 14, referring to
J Sipple, Prepared Remarks before the 113th Annual Meeting of the New York State Bar
Association, Antitrust Law Section (New York, 16 January 1990) 9-12.
Chapter4|Page155
the staffs investigation intensifies, working toward a decision whether or not to

challenge the acquisition and, simultaneously, preparing for a court challenge if
necessary. As part of this effort, the staff may conduct further interviews and
issue voluntary request letters or compulsory process to industry participants,
suppliers, and customers seeking documents and information. Agency staff may
also conduct depositions (at the Antitrust Division) or investigational hearings (at
the FTC) of personnel of the parties to the transaction and third parties.78
In addition to documents submitted by the parties in accordance with the HSR

Act, the DOJ(AD) may also issue a civil investigative demand (CID), pursuant to
the Antitrust Civil Process Act,79 which may require a person to
produce such documentary material for inspection any copying or reproduction,
to answer in writing written interrogatories, to give oral testimony concerning
documentary material or information, or to furnish any combination of such
material, answers, or testimony.80
These are frequently issued to competitors of parties to an HSR merger

investigation for obtaining sales, capacity, market share data and related material
and may sometimes be issued to parties to an HSR-reportable transaction in
order to supplement information sought in the second request.81 If a party fails to
comply with a CID request the DOJ may bring action in a federal district court to
enforce the CID.82 The FTC may also issue CIDs in relation to merger
investigations83 and has an additional compulsory process pursuant to the FTC
Act.84 This includes requiring a party to file (under oath) annual or special
reports or written answers to specific questions85 and issuing a subpoena
78
79
80
81
82
83
84
85
Ibid 27-28.
15 USC 1311-14.
15 USC 1312(a). See also ABA Section of Antitrust Law, The Merger Review Process,
above n 25, 15.
15 USC 1314(a). See also ABA Section of Antitrust Law, The Merger Review Process,
above n 25, 15-16.
15 USC 57b-1(a).
15 USC 46(b), 49. See also ABA Section of Antitrust Law, The Merger Review Process,
above n 25, 16.
15 USC 46(b). See also ABA Section of Antitrust Law, The Merger Review Process, above
n 25, 16.
Chapter4|Page156
compelling testimony or the production of documentary evidence86 to any person

and to issue access orders to parties to the investigation which permit the FTC
to inspect documentary evidence at the location of the party serviced with the
order.87 As with the DOJ, the FTC issues these requests primarily to competitors
of the filing parties, but it does have the power to issue them to parties to the
transaction in addition to a Second Request. If parties fail to comply with FTC
requests pursuant to these powers the FTC can apply to a federal district court
for a compliance order.88
Evidence gathered by the FTC or DOJ (AD) is incorporated in a memorandum
which will analyze the evidence against the requirements of the Horizontal
Merger Guidelines and assess the chances of prevailing in court. 89 After the
extended waiting period has expired parties may complete the transaction unless
the relevant agency has obtained an injunction or the parties have voluntarily
agreed not to close pending further review.90 The Agencies do not approve or
disapprove of transactions, but will either seek injunctive relief to delay the
transaction or allow the waiting period to expire91 after which time the parties may
consummate the transaction. Failure of the Agencies to challenge a merger does
not provide parties with certainty against enforcement action; either agency or
third parties may still pursue enforcement action after the transaction has been
completed,92 although it remains unusual for the Agencies to pursue action once
the waiting period has expired.93
86
87
88
89
90
91
92
93
15 USC 49. See also ABA Section of Antitrust Law, The Merger Review Process, above n
25, 16.
Ibid.
Ibid.
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a(a). See also ABA
See generally ABA Section of Antitrust Law, The Merger Review Process, above n 25, 10
and 29.
See, eg, Department of Justice (US), 'Justice Department Requires Sardines Divestiture in
Connors Bros Acquisition of Bumble Bee' (Press Release, 31 August 2004). See also ABA
See, eg, ABA Section of Antitrust Law, The Merger Review Process, above n 25, 10 and 29
Chapter4|Page157
Where either Agency does express a concern about a merger, the process for
blocking the merger varies depending on which Agency is responsible for the
investigation. In each case, mergers are generally either blocked as a result of
injunctive relief from a federal court or, more commonly, are resolved by consent
orders between the parties and the relevant Agency, also referred to as merger
remedies.
Neither Agency has power to grant a preliminary injunction, so each must apply
to the courts to preliminarily enjoin a transaction they wish to challenge as
contrary to the substantive law. The Court will decide whether to grant an
injunction based on whether it would be in the public interest, looking in particular
at the likelihood of success.94
In the case of the FTC, if a preliminary injunction is granted, the FTC may initiate
an administrative trial95 and issue an order permanently enjoining the
transaction.96 If a merger does proceed to an FTC administrative proceeding,
the FTC may issue a cease and desist order and/or order divestiture and other
relief necessary to restore competition if a violation is found.97 Administrative
decisions of the FTC are subject to appeal to a federal court of appeals.98 In
practice, however, parties usually abandon a transaction if a preliminary
injunction is issued.99
94
95
96
97
98
99
15 USC 53(b). See also ABA Section of Antitrust Law, The Merger Review Process, above
n 25, 20.
The FTC may issue an administrative complaint before an FTC administrative judge. If it
does this, the will normally also authorize the Bureau of Competition to gile a suit in a federal
district court seeking preliminary injunctive relief: 15 USC 53(b). See generally ABA
The FTC may defer its administrative complaint until after it obtains preliminary injunctive
relief or parties may voluntarily agree not to complete the merger until the conclusion of the
hearing: see ABA Section of Antitrust Law, The Merger Review Process, above n 25, 31.
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 19 (pursuant to
15 USC 21(b), 45(b)).
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 19 (pursuant to
15 USC 21(c), 45(c)).
Harty, above n 43, 385.
Chapter4|Page158
The DOJ(AD) has no power to make its own orders, but where it considers a
merger will be anticompetitive and have substantial, direct, and reasonably
foreseeable effects on US commerce100 it may bring a civil action in a federal
district court seeking preliminary or permanent injunctive relief.101 An appeal
against an order of the district court may be made.102
Where violations of the merger prohibitions are established by the Court or the
FTC, various forms of relief are available under s 15 of the Clayton Act,103
including orders against completing all or parts of the merger, divestiture (if the
merger already has occurred), rescission, and other types of relief aimed at
maintaining competition and preventing antitrust violations.104
FTC cases are frequently resolved by means of a consent order which is
subject to a public notice and comment procedure prior to final FTC approval.105
The public comment period runs for thirty days after which the FTC considers any
comments received and then will either accept the order for final issuance
without modification, modify the order in light of the comments received, or reject
the order and initiate an enforcement action at that time.106 Similarly, DOJ cases
are often resolved through settlement (consent decree) between parties and the
DOJ. Where this occurs public notice of the decree must be given, followed by a
comment period and judicial approval.107 A court will only approve a proposed
consent decree if it is in the public interest.108
100
101
102
103
104
105
106
107
108
Ibid 17 (pursuant to 15 of the Clayton Act: 15 USC 25). See generally Sunshine and
Seward, above n 31, 183.
28 USC 1292(a)(1).
15 USC 25.
Ibid 20 and Rules, Regulations, Statements and Interpretations Under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, 16 CFR 2.34 (2005).
Ibid 18. This is pursuant to the Tunney Act 1974, 15 USC 16(b)-(h).
Chapter4|Page159
Private action is also available in the form of preliminary and permanent

injunctive relief109 and treble damages may be claimed where a private plaintiff
can demonstrate harm resulting from a contravening merger.110
Confidentiality
Information provided pursuant to an HSR Act requirement is exempt from
disclosure under the Freedom of Information Act (FOIA) and may not be made
public by the federal agencies, though such information may be disclosed to
Congress or in connection with an administrative or judicial proceeding.111
Information obtained by the FTC is largely protected as confidential, but the FTC
is free to disclose confidential information in subsequent proceedings with
respect to the transaction.112 However, the Agencies generally take the view that
access to material is not permitted absent the consent of the party providing the
information, and the courts have upheld this position.113
4.2.2 European Union

Introduction
The EU notification requirements have been similar to those existing in the US
since 1990,114 when the EC was first given explicit power to appraise the
compatibility of [mergers] with the common market115 and the volume of notified
transactions has steadily increased since that time.116 The original EU merger
109
110
111
112
113
114
115
116
15 USC 26.
15 USC 15.
ABA Section of Antitrust Law, The Merger Review Process, above n 25, 13 and see 15 USC
18a(h).
Ibid 13.
See generally Chongwoo and Shekhar, above n 17, 1.
Mitja Kocmut, 'The Role of Efficiency Considerations Under the EU Merger Control' ((L)
05/05, The University of Oxford Centre for Competition Law and Policy, 2005) 2.
Ibid 2.
Chapter4|Page160
regulation117 operated until 2004 when it was replaced by the current EU Merger
Regulation (EUMR).118 The EUMR both changed the substantive test from one
focused on market dominance to a competition test, as discussed in the previous
chapter, and altered the procedural notification requirements.
Where a merger (or concentration119) has an EU Dimension, determined by the
use of certain jurisdictional thresholds, notification must be made to the EU which
has sole jurisdiction. This operates to the exclusion of any notification regimes
adopted by EU Member States and is referred to as the principle of one-stop
merger control.120
In addition to the EUMR, there is an Implementing Regulation and various EC
Notices and Guidelines121 which assist in determining whether notification is
required and, if so, the procedures to be adopted when making that notification.
Administrative structure
Administratively, the structure of the EU in relation to mergers is quite different
from the US and most other regimes. The Directorate-General for Competition of
the EC (DG-COMP)122 is responsible for enforcing competition policy and, in
relation to mergers, is responsible for receiving notifications and gathering and
analyzing information relating to potential mergers. However, it is the EC,
comprising one Commissioner from each state (currently 27),123 including one
117
118
119
120
121
122
123

Between Undertakings [1989] OJ L 395.
Between Undertakings [2004] OJ L 24, art 10(1).
The EUMR adopts the term concentration to refer to the type of transaction referred to as a
merger throughout this thesis. Although there are some variations in the meaning of
concentration or merger in different jurisdictions, the terms will be used synonymously
throughout to mean the type of mergers defined in chapter 1 at section 1.3.3.
Ibid 820.
DG-COMP was previously referred to as DG-IV.
Note that the Treaty of Lisbon [2007] OJ C 306 (entered into force 1 December 2009)
provides that the size of the Commission will, from 2014, reduce from one Commissioner
Chapter4|Page161
Competition Commissioner,124 who is responsible for decisions in relation to

competition law matters. While it is possible for some decision-making power to
be delegated to the Competition Commissioner alone,125 in most cases decisions
as to whether proposed mergers will contravene substantive laws rests upon the
decision of the entire Commission. 126
Most commissioners have little or no experience in competition policy and may
have interests which conflict with those of the DG-COMP,127 and there is nothing
in the Treaty that hints or allows to prioritise competition policy over other
policies.128
The EC has the power both to clear a merger and to prohibit it in part or in its
entirety.129 Although the power to prohibit a merger entirely is exercised only
rarely, it may be used and frequently is used to help leverage a negotiated
settlement (merger remedies).130
124
125
126
127
128
129
130
per member state to one for two thirds of member states. However, the Treaty of Lisbon
also permits the European Council to unanimously decide to alter the number of
Commissioners. In order to secure passage of the Irish referendum, necessary for the
passage of the Treaty of Lisbon the Council agreed to alter the number of Commissioners to
continue to comprise one member per Member State: Richard Corbett, Ireland has a
Diplomatic Victory but the Real Winner is Europe (12 December 2008) euobserver.com
<http://euobserver.com/18/27296?print=1> at 22 January 2010.
On 10 February 2010 Spains Joaqun Almunia replaced Neelie Kroes as Competition
Commissioner.
Whish, above n 10, 819.
See European Commission, Governance Statement of the European Commission, 30 May
2007 <http://ec.europa.eu/atwork/synthesis/doc/governance_statement_en.pdf> at 30
January 2010. See also Michelle Cini, The European Commission: An Unelected
Legislator? (2006) 8(4) Journal of Legislative Studies 14, 20-22. See also Yannis
Karagiannis, 'Why the EU Does Not Have an Independent Competition Agency: French
Interests and Transaction Costs in Early European Integration' (Working Paper No 2008/18,
Institut Barcelona D'Estudis Internacionals (IBEI), 2008) 5: The EC is a multi-constituency
organization where decisions are taken collegially, and in which the Directorate General for
th
Competition (DG-COMP) represents only 1/27 of the vote.
Karagiannis, above n 126, 5.
Ibid.
Ibid.
Chapter4|Page162
FIGURE 4.3 EUROPEAN UNION ADMINISTRATIVE AND JUDICIAL

Monetary and jurisdictional threshold requirements for notification

As in the US, turnover131 is used as the medium for determining the allocation of
jurisdiction.132 Turnover does not, however, give rise to a presumption of market
power of the parties.133
There is no requirement for parties to be domiciled in the EU, or that any part of
the transaction take part in the EU.134 Instead, the focus is on the location of the
customers and the effect the merger would have on competition within the EU.135
Determining whether a merger has an EU dimension is particularly important
because of the underlying national regimes operating in 26 of the 27136 EU
Member States. Where a merger has an EU dimension, Article 21 of the EUMR
131
132
133
134
135
136
Turnover is determined in Euro based on average European Central Bank rate for the
twelve months concerned: Ibid 832.
Ibid 828.
Ibid.
Ibid.
See Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No
139/2004 on the Control of Concentrations Between Undertakings [2008] OJ C 95/1 para
196. See also ibid 832
The exception is Luxembourg.
Chapter4|Page163
provides that the Member States shall not apply their national competition
laws.137 This is known as the exclusivity principle. Conversely, the Commission
has no competence under the [EUMR] where the concentration does not have a
Community dimension.138 It is clear that, for parties, there may be significant
regulatory advantages in being subject to [EU] rather than Member State law. 139
The one-stop shop approach means that mergers which might otherwise
involve multiple filings within the EU, can be notified to one supranational
authority having sole competence.140 This also facilitates the application of a
unified substantial norm to mergers resulting in a level playing field across
the single market.141 Conversely, some parties might wish to have their merger
considered under the domestic law of a particular Member State or states, which
they believe that it might look more favourably upon their merger.
A merger will have an EU Dimension if it involves worldwide turnover of
approximately 5 billion and EU-wide turnover for at least two parties in excess of
approximately 250m must be notified,142 unless two-thirds of its aggregate EUwide turnover are within a single Member State.143 Notification is also required,
pursuant to article 1(3), where;
(a) the combined aggregate worldwide turnover of all the undertakings
concerned is more than 2,500 million;
(b) in each of a at least three Member States, the combined aggregate turnover
of all the undertakings concerned is more than 100 million;
137
138
139
140
141
142
143
Michael Harker, Cross-Border Mergers in the EU: The Commission V The Member States
(2007) European Competition Journal 503, 504.
Ibid 504. See EUMR, article 21(1).
Harker, above n 137, 507.
Ibid.
EUMR, article 1(2). See also Commission Consolidated Jurisdictional Notice, above n 135,
Part C . See also Merger Notification and Procedures Template: European Community
(2004), International Competition Network
<http://europa.eu.int/comm/competition/mergers/others/20040726template.pdf> at 20
January 2005.
EUMR, article 1(2-3).
Chapter4|Page164
(c) in each of the three Member States included for the purpose of point (b), the
aggregate turnover of each of at least two of the undertakings concerned is
more than 25 million; and
(d) the aggregate Community-wide turnover of each of at least two of the
undertakings concerned is more than 100 million,
unless each of the undertakings concerned achieves more than two-thirds of its
aggregate Community-wide turnover within one and the same Member State.
Relatively few notifications are made under this provision compared with article
1(2).144
Where a merger has an EU Dimension, as determined by the thresholds, it is an
offence to consummate a merger without a prior clearance from the
Commission,145 for which very substantial fines may be imposed.146 In this
respect, the EC recently fined Electrobel EUR 20 million for failing to obtain EC
approval before obtaining a controlling interest in Compagnie Nationale du
Rhne. The fine was imposed notwithstanding the fact that the acquisition did
not raise competition concerns, although this fact was taken into consideration in
setting the fine.147 Fines may also be imposed for providing misleading or false
information in a notification.148
Even where thresholds are prime facie met, there are rules which limit their
application. These have, not surprisingly, proven controversial. Most
controversial has been the two-thirds rule, which excludes from the EUMR
mergers in which more than two-thirds of the aggregate EU-wide turnover occurs
within the same Member State. This has the effect of excluding many substantial
mergers from the EUMR, although not from notification altogether.149 Also
controversial is the power given to Member States to take appropriate measures
144
145
146
147
148
149

Ibid 818.
EUMR, article 14.
European Commission, Commission Fines Electrobel 20 Million Euros, above n 11.
EUMR, article 14(1)(b).
Chapter4|Page165
to protect their legitimate interests,150 provided those interests relate to grounds

other than those covered by the EUMR. This is a defensive151 provision and
does not reserve for Member States, either expressly or by implication, authority
to authorise a merger which the EC has prohibited.152 However, these
exceptions have enabled Members to modify transactions with a Community
dimension significantly, and even on occasions frustrate them.153 In relation to a
recent attempt to modify a European merger in this way,154 then Competition
Commissioner, Neelie Kroes,155 stated:
I regret that the Commission has once again been obliged to intervene to avoid
that a Member State places unjustified conditions on a major European takeover.
No one should doubt the Commissions commitment to ensuring Europes
businesses can operate on a level playing field to the benefit of Europes
consumers, businesses and the economy as a whole. 156
In addition to these rules and exemptions, there are mechanisms in place for
referral of cases as between the Commission and the Member States.157 Prior to
the current EUMR coming into operation, referrals occurred frequently and,
although the number of these referrals remains large, the number of Member
150
151
152
153
154
155
156
157
EUMR article 21(4). See further Jonathan Galloway, EC Merger Control: Does the Reemergence of Protectionism Signal the Death of the One Stop Shop (Paper presented at
the 3rd Annual CCP Summer Conference, University of East Anglia, Norwich, 14 June 2007)
and Harker, above n 137, 504.
Harker, above n 137, 505.
Ibid 505.
Ibid 503 and see also 518.
COMP/M.4197 E.ON/Endesa, Commission Decision Relating to a Proceeding Pursuant to
Art 21 of Council Reg 139/2004 on the Control of Concentrations between Undertakings, 26
September 2006 (C (2006) 4279 final) as cited in Harker, above n 137, 514.
Joaqun Almunia replaced Neelie Kroes as Competition Commissioner on 10 February
2010.
European Commission, Mergers: Commission Decides that Spanish Measures in Proposed
E.ON/Endosa Takeover Violate EC Law (Press Release IP/06/1853, 20 December 2006),
quoted in Harker, above n 137, 517.
EUMR, article 4(4), regarding pre-notification referrals following requests from the parties
and article 9 for post-notification referrals following requests from Member States. See also
European Commission, Commission Notice on Case Referral in Respect of Concentrations
[2005] OJ C 56/5, Andrew Scott, National Champions and the Two-Thirds Rule in EC
Merger Control (Working Paper CCP o6-6, EC Centre for Competition Policy & The Norwich
Law School, University of East Anglia, April 2006) and Harker, above n 137, 504.
Chapter4|Page166
State requests has fallen slightly since the new EUMR came into operation. 158
Merging parties have, however, made use of the [pre-notification referral]
procedure on quite a number of occasions, none of which have been refused
since 2004.159 Conversely, article 4(5) allows parties to a proposed merger,
which does not have an EU dimension pursuant to Article 1(2) or (3) to request
that it be examined by the EC if it is capable of being reviewed under the
national competition laws of at least three Member States.160 The case will not
be referred to the EC if, within 15 days of receiving the parties submission, they
disagree with the transfer request.
Cost of filing
There is no filing fee associated with notification in the EU.161 Although the DGCOMP has sought to obtain the power to impose filing fees, this request has
been rejected by the Commission.162
Form, information and language requirements
A set notification form, Form CO, must be used for filing.163
An original, signed version of the Form CO, on paper, must be submitted to the
Commission together with a further five paper copies with annexes and 32 copies
of the notification in CD- or DVD-ROM format164
158
159
160
161
162
163
Whish, above n 10, 836-7.

Ibid 836-7. See also Galloway, EC Merger Control, above n 150, 2 who claims that this is
undermining some of the benefits of administrative efficiency and fairness that the onestop shop approach is designed to achieve.
EUMR article 4(5).
See generally Michael A Sullivan and Mario Brilliant, A Comparison of Basic Merger
Notification Requirements in Canada, the United States and the European Community
(Paper presented at the Annual Conference of the Canadian Bar Association Competition
Law Section, 20-21 September 2001).
ICN, 'Merger Notification Filing Fees' (Mergers Working Group, April 2005) 3.
EUMR article 4 requires the notification. The relevant form is Form CO. See Commission
Regulation (EC) No 802/2004 Implementing Council Regulation (EC) No 139/2004 (The
Implementing Regulation) and its Annexes (Form CO, Short Form CO and Form RS)
[2004] OJ L 133, 1-39 amended by Commission Regulation (EC) No 1033/2008 [2008] OJ L
279, 3-12.
Chapter4|Page167
Information requirements are extensive, even in the first phase of an

investigation.165 In limited cases a less onerous short-form option is available to
the parties.166
Any official EU language may be used.167
Process and waiting periods
Until 2004, notification was required to be made within one week of conclusion of
the agreement, announcement of public bid or acquisition of a controlling interest.
However, since 1 May 2004 notification may be made following the conclusion of
the agreement, the announcement of the public bid, or the acquisition of a
controlling interest but prior to their implementation and may also be made any
time after a good-faith intention to conclude an agreement or to make a public
bid.168
When a concentration has a EU dimension it is automatically suspended until
declared compatible with the [internal] market,169 although this suspension
period may be waived.170 Parties who complete during the suspension period
164
165
166
167
168
169
170
Whish, above n 10, 845. See also European Commission, Communication Pursuant to
Article 3(2) of Regulation 802/2004 Implementing Council Regulation (EC) No 139/2004 on
the Control of Concentrations Between Undertakings [2006] OJ C 251/2.
European Commission, Communication Pursuant to Article 3(2) of Regulation 802/2004,
above n 164, Annex I. See also Dave Poddar, 'Recent Changes to the Australian Merger
Control Regime - How the Changes Have Operated in Practice' (2009) 32 University of New
South Wales Law Journal 275: [T]he European Commissions Form CO demands
extensive and detailed information upfront.
European Commission, Communication Pursuant to Article 3(2) of Regulation 802/2004,
above n 164, Annex II.
European Commission, Communication Pursuant to Article 3(2) of Regulation 802/2004
Implementing Council Regulation (EC) No 139/2004 on the Control of Concentrations
Between Undertakings [2006] OJ C 251/2, article 3.
Whish, above n 10, 844; EUMR, article 4(1).
Ibid 843. See EUMR, article 7.
EUMR Article 7(3).
Chapter4|Page168
risk significant fines of up to 10 per cent of the worldwide turnover of the

undertakings involved.171
The EU conducts merger investigations in two phases. The EC has 25 days to
make an initial Phase I decision172 (although this may be extended to 35 days)173
and the majority of mergers are cleared at this stage.174
In Phase I, [the Commission] undertakes an initial investigation taking five weeks,
with a further two weeks if remedies are being negotiated. In 88 per cent of all
merger proposals, the Commission judged in Phase I that no competition
concerns were raised, and the mergers were allowed to proceed without
modification. In 4.5 per cent of cases, remedies were agreed in Phase I, and on
that basis, the merger was allowed to proceed.175
As part of the initial investigation phases, some mergers will be permitted to

adopt a short form notification, reducing information requirements.176 Short form
notifications are permitted where the parties combined market shares do not
exceed 15% for horizontal mergers or 25% in the case of vertical mergers or
where parties are not engaged in business activities in the same product and
geographical markets or in markets that are vertically related.177 A significant
proportion of cases are now dealt with under the simplified procedure.178 Where
short-forms are adopted the EC will normally provide clearance within 25 days
171
172
173
174
175
176
177
178

Between Undertakings [2004] OJ L 24, art 14.
EUMR, art 10(1).
Ibid. An extension may occur where the Commission receives a request from a Member
State in accordance with Article 9(2) or where the undertakings concerned offer
commitments pursuant to Article 6(2).
John Davies (ed), Merger Control 2003, Getting the Deal Through (2003) 81 noting that
between 1990 and May 2002 the Commission received a total of 2013 notifications (of
which 78 were withdrawn). Of this total, around 95 per cent (1845) of cases were cleared
after a Phase I inquiry. . See also Whish, above n1 0, 847.
Stephen Davies and Bruce Lyons, Mergers and Merger Remedies in the EU: Assessing the
Consequences for Competition (2007) 3.
Commission Regulation (EC) No 802/2004 Implementing Council Regulation (EC) No
139/2004 (The Implementing Regulation) and its Annexes (Form CO, Short Form CO and
Form RS) [2004] OJ L 133, 1-39 amended by Commission Regulation (EC) No 1033/2008
[2008] OJ L 279, 3-12, Annex II
Ibid 845.
Chapter4|Page169
from notification,179 however, within this timeframe the EC retains the option of
reverting to a normal phase I process, which will impose more onerous
information requirements on the parties.
For those mergers that do raise concerns, which represent approximately 5 per
cent of notified cases,180 a second-stage investigation (Phase II) may be
launched, for which the basic deadline for the EC is 90 working days from the
date proceedings were initiated.181 This may be extended in some
circumstances,182 including where commitments (or merger remedies) are
offered by the parties. A further 20 days may be added to this time frame at the
request of the parties.183 It is also possible to suspend the time periods in
exceptional cases owing to circumstances for which one of the undertakings
involved in the concentration is responsible. 184 This option is, however, rarely
invoked.185
Consistent with the US approach, the time limits referred to apply from the
complete notification of the merger. Incomplete notifications those omitting
some of the required information or containing false or misleading information186
will not cause the clock to start running. For example, providing incorrect
contact details for customers, suppliers or competitors may lead to a declaration
179
180
181
182
183
184
185
186
See European Commission, Commission Notice on a Simplified Procedure for Treatment of

Certain Concentrations under Council Regulation (EC) 139/2004 [2005] OJ C 56/32.
Whish, above n 10, 844. See also Davies and Lyons, above n 175, 3.
EUMR, article 10(3). See also European Commission, Commission Notice on Remedies
Acceptable Under the Council Regulation (EC) No 139/2004 and under Commission
Regulation (EC) No 802/2004 [2008] OJ C 267, 1-27, art 10(3) and Whish, above n 10, 844
and 848.
European Commission, Commission Notice on Remedies Acceptable, above n 181, 1-27,
art 10(3).
EUMR, article 10(3). See also European Commission, Commission Notice on Remedies
Acceptable, above n 181, 1-27, art 10.
EUMR, article 10(4).
Whish, above n 10, 848. See cases Oracle/PeopleSoft, (Comp/M3216) [2005] OJ L 218/6
and Omya/JM Huber (Comp/M3796) [2007] OJ L 72/24, unsuccessfully appealed by Omya
to the then Court of First Instance: Omya v Commission, (T-145/06) [2009] OJ C 69/81.
Directorate General of Competition, Best Practices on the Conduct of EC Merger
Proceedings (20 January 2004), para 20.
Chapter4|Page170
of incompleteness because of the potential for delay as a result.187 The DGCOMP has released guidelines to assist parties in avoiding incompleteness in
filing.188 In particular they recommend contact with the DG Competition prior to
notification.189
It is also possible for the parties to agree with the DG-COMP to omit certain of
the information requirements where it is not considered necessary for the
examination of the case.190
At the end of Phase II the EC may either declare the concentration compatible
with the internal market, compatible subject to commitments to ensure
compliance with modifications proposed by the parties191 or incompatible with the
internal market.192
Exactly half of all Phase II cases end up with agreed remedies (that is, 2.5 per
cent of all mergers). A further one in five were cleared unconditionally in this
phase, one in eight were prohibited and one in seven withdrawn by the merging
parties. 193
If the parties have implemented the merger or done so in breach of a condition,

the EC may declare that the act or acts be reversed or modified as
appropriate.194
Merging parties or interested third parties who are dissatisfied with the decision of
the College of Commissioners may appeal to the General Court and a further
appeal may be made to the Court of Justice.195
187
188
189
190
191
192
193
194
Ibid.
Ibid.
Ibid paras 5 and 7.
Directorate General of Competition, Best Practices, above n 186, para 19.
EUMR, article 16.
Davies and Lyons, above n 175, 3.
EUMR, article 8(4).
Chapter4|Page171
Merger Remedies
Merger remedies are designed to avoid anticipated anti-competitive
consequences, while retaining the benefit of any anticipated merger-generated
efficiencies,196 and may be requested by the parties as an alternative to risking
prohibition of the merger altogether or to limit the duration of the clearance
process. The EU imposes remedies on the merger proposals ten times more
often than prohibiting them.197
The process of formulating and agreeing to merger remedies involves detailed
negotiations with the parties.198 Because of the on-going monitoring required
where remedies are behavioural, European regulators, as with most other
regulators, have expressed a clear preference for structural remedies.199 The
DG-COMP provides parties with guidance on formulating appropriate merger
remedies,200 normally through state of play meetings, which may occur during
Phase I and Phase II of an investigation.201
195
196
197
198
199
200
201
The Court of Justice has unlimited jurisdiction to review decisions whereby the Commission
has fixed a fine or periodic payments; it may cancel, reduce or increase the fine or periodic
payment imposed: EUMR article 8(4).
See generally Davies and Lyons, above n 175.
Ibid x and at 1-3, observing that statistically, between 1990 and 2006, only 0.6% of cases
have been prohibited by the Commission entirely (and there has been only one prohibition
since 2001) but 7 per cent have involved merger remedies: commitments from the merger
parties to remove specific competition concerns raised by the Commission. See also
Davies and Lyons, above n 175, 1.
European Commission, Commission Notice on Remedies Acceptable, above n 181, 1-27,
para 15. Compare Davies and Lyons, above n 175, 43. See generally OECD, Merger
Remedies (Best Practice Roundtable on Competition Policy, DAF/COMP(2004)21, 23
December 2004) and ICN, Merger Remedies Review Project (Merger Working Group,
Analytical Framework Subgroup, June 2005).
Directorate General of Competition, Best Practices, above n 186, para 41.
Ibid para 40. See also European Commission, Commission Notice on Remedies
Acceptable, above n 181, 1-27.
Chapter4|Page172
4.3 Voluntary notification regimes

Most OECD countries that do not require PMN have in place procedures for the
voluntary notification of mergers prior to completion. This is designed to ensure
parties are able to obtain an opinion about the legality of their proposed merger
prior to consummation, rather than risk a potentially costly legal battle postconsummation. It also provides regulators with an opportunity to review, and if
necessary block, potentially harmful mergers prior to consummation. These
jurisdictions may also evaluate mergers prior to consummation that they detect
through their own market investigations or as a result of notification by interested
third parties. These countries, however, represent a small minority within the
OECD; only Australia, New Zealand and the United Kingdom202 have opted for a
voluntary system of pre-merger review.
Despite the voluntary nature of notification in these jurisdictions, the vast majority
of significant mergers are notified to the authorities by the parties, who then
voluntarily refrain from consummating their merger until they receive an opinion
from the regulator.203 When combined with notification from third parties, very
few mergers having the potential to contravene substantive law fail to be fully
investigated by competition law authorities prior to consummation. Thus, while
202
203
Chile, admitted in 2010, also operates a voluntary system. In 1992 the Cooney Committee
recommended a mandatory pre-notification scheme be introduced in Australia, but the
recommendation never came to fruition: Commonwealth of Australia, Mergers, Monopolies
and Acquisitions: Adequacy of Existing Legislative Controls (Senate Standing Committee on
Legal and Constitutional Affairs, Canberra, 1991) (Cooney Report) recommendations 5&6
at xiv; 55-76. A more recent inquiry into Australias competition law regime found no support
for the introduction of a mandatory notification system of merger notification and none was
recommended: Trade Practices Act Review Committee, Review of the Competition Law
Provisions of the Trade Practices Act (Commonwealth of Australia, January 2003) 60-61
(Dawson Report). The Dawson Report noted that the replacement of the informal process
with a compulsory, formal notification of mergers would greatly increase the regulatory
burden both on corporations proposing to merge and on the ACCC (at 61).
See, eg, Stephen Corones, The Strategic Approach to Merger Enforcement by the ACCC
(1998) 26 Australian Business Law Review 64, 67 and ACCC, The ACCC's Approach to
Mergers: A Statistical Summary (1998) 27. See also Chander Shekhar and Philip Williams,
'Should the Pre-Notification of Mergers Be Compulsory in Australia?' (2004) 37 The
Australian Economic Review 382 at 385.
Chapter4|Page173
less formal than the jurisdictions imposing compulsory notification requirements,

pre-merger notification is effectively the norm in both Australia and New
Zealand.204 This is perhaps a result of the potentially high penalties both
monetary205 and in the form of divestiture that may result from a subsequent
challenge, combined with the reputation of the authorities as willing to vigorously
pursue those mergers which raise anti-competitive concerns and are not
notified.206 The fact that the vast majority of mergers voluntarily notified do not
raise competition concerns, suggests parties are exceedingly cautious about
notifying the authorities despite the voluntariness of the regime.207
4.3.1 Australia
Australia adopts a quasi-administrative approach to merger regulation. Although
not imposing a mandatory notification regime, in Australia parties may voluntarily
notify the ACCC of their proposed merger. As in the US, the ACCC does not
have power to prevent a merger proceeding without first obtaining an injunction
from a court. However, unlike the US, Australian regulators are now able to
provide formal clearance which protects parties from subsequent legal
challenge.208 Clearance may also be provided subject to conditions or may be
refused entirely. The parties may appeal a decision of the ACCC to the ACT.
Consummating a merger following a denial of clearance does not contravene the
law unless the merger contravenes the substantive law (or unless court
enforceable undertakings have been given).
204
205
206
207
208
Also the UK, but to a lesser extent given the overriding jurisdiction of the EU in many cases.
The penalties for contravening the substantive merger law in Australia can exceed $10m,
depending on the turnover of the parties involved or value of benefit obtained through the
unlawful conduct: Trade Practices Act 1974 (Cth), s 76(1A).
See Shekhar and Williams, above n 203, 385.
Dawson Report, above n 202, 46. See also ACCC, Exports and the Trade Practices Act:
Guideline to the Commission's Approach to Mergers, Acquisitions and other Collaborative
Arrangements that Aim to Enhance Exports and the International Competitiveness of
Australian Industry (October 1997) 6 and Julie Brebner, 'The Relevance of Import
Competition to Merger Assessment in Australia' (2002) 10 Competition and Consumer Law
Journal 119, 127-129.
See generally ACCC, Formal Merger Review Process Guidelines (June 2008).
Chapter4|Page174
Although parties are not required to notify Australian authorities about a proposed
merger, they frequently do so in order to obtain an opinion about its legality.209
There are now two options for a party seeking such advice: (1) they can request
an informal review from the ACCC (the informal clearance procedure) or (2) they
can seek formal clearance (the formal clearance procedure). Under the former,
even if the ACCC raises no competition concerns, the merger may be
subsequently challenged either by the ACCC or interested third parties. Under
the latter approach a clearance from the ACCC provides parties with immunity
from any subsequently legal challenge to that merger, within the timeframe and
on the conditions stipulated.210
Despite the greater certainty available with the formal clearance option, no party
has yet elected to pursue this option, which came into operation in 2007. The
informal clearance option, on the other hand, continues to thrive, at least in part
because of its greater flexibility.211
The ACCC encourages firms to notify them of mergers (formally or informally)
when both the products of the merger parties are either substitutes or
complements and the merged firm will have a post-merger market share of
greater than 20 per cent in the relevant market/s.212
209
210
211
212
See Corones, The Strategic Approach to Merger Enforcement by the ACCC, above n 203,
67; ACCC, The ACCC's Approach to Mergers, above n 203, 27; SFE Corporation Limited,
Public Submission 92, Trade Practices Act Review 2002, 11; Australia and New Zealand
Banking Group Limited (ANZ), Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 91, Trade Practices Act Review 2002, 4.
Trade Practices Act 1974 (Cth) s 95AC(2).
There are a number of possible explanations for the lack of success of the formal merger
clearance system. See generally, Poddar, above n 165.
ACCC, Merger Guidelines (November 2008) 9 (para 2.9)
Chapter4|Page175
FIGURE 4.4 AUSTRALIAN ADMINISTRATIVE AND JUDICIAL

The informal clearance process

The ACCCs informal process is now well established. There is no fee
associated with utilizing this process and pursing this option does not prevent
parties from subsequently applying via the formal process if they wish to obtain
greater certainty.213 In practice, however, it is this process, rather than the
formal process, that is adopted by parties wishing to notify the ACCC of their
merger.
It is clear that a large proportion of mergers are notified to the ACCC, even where
they have little or no prospect of contravening the substantive law; statistically,
only about four to five per cent of mergers notified raise competition concerns;
213
There would appear to be nothing stopping a party seeking advice under the informal
system and, if concerns were raised or increased certainty required, then seeking a formal
clearance under this legislative system.
Chapter4|Page176
this is relatively consistent with jurisdictions that operate mandatory regimes.214

For mergers that do not raise concerns, a grant of informal clearance means the
parties can proceed with confidence that the merger will not be challenged.
Although the clearance has no force in law, with the result that there is nothing to
prevent the ACCC215 or interested third parties216 subsequently opposing the
merger,217 in practice this is likely to happen only if relevant information was not
disclosed to the ACCC or aspects of the merger have changed since
notification.218
Where informal notice is provided to the ACCC of a proposed merger, the ACCC
may grant an informal clearance, refuse clearance, or grant clearance to the
214
215
216
217
218
Dawson Report, above n 202, 46. See also ACCC, Exports and the TPA, above n 207, 6
and Brebner, above n 207, 127-129. Big business (in particular) has observed that these
statistics will not include mergers not notified (or notified but abandoned prior to a decision
by the ACCC) because the parties, while believing that their conduct will not SLC, abandon
the merger rather than risk an adverse informal finding by the ACCC, nor will they include
proposed mergers so likely to SLC that the parties abandon the proposal. In response,
former ACCC Chairman, Prof Allan Fels has doubted whether there are any, or at least
many, such cases, claiming that he does do not regard Australian CEOs as shrinking violets
afraid to sound out the regulator about possible mergers: Allan Fels, Persistent Myths
Ignore the Reality of ACCC Action, Australian Financial Review, 21 November 2002. In any
event, it should also be observed that these statistics also will not include mergers so
unlikely to SLC that they are not notified to the ACCC for clearance.
This is also the case in the US in relation to the formal process; it is not a substantive
clearance but rather a clearance to merge that is given the merger itself will still be
subject to the substantive law and may be challenged in court.
Third parties are not able to seek an injunction to prevent a merger proceeding (s 80(1A)
TPA), but may nevertheless challenge a merger that has proceeded and obtain declaratory
relief, orders for divestiture or damages. While there is nothing in law preventing third
parties taking action, in practice third parties may not have sufficient access to market
information or sufficient financial resources to enable them to effectively bring an action; as
a result, no third party has ever brought an action for a declaration that a merger is unlawful
under s 50 of the TPA, even where they might have considerable insentive to do so.
See, for example, TPC v Santos Ltd (1992) 38 FCR 382 where the ACCC initially indicated it
would not object to a proposal but subsequently brought an action for an injunction to
prevent the merger proceeding, having formed the view it was likely to create a position of
dominance.
In practice the ACCC has only ever challenged a merger that it has informally cleared where
relevant market information was withheld.
Chapter4|Page177
parties subject to them accepting enforceable undertakings (merger remedies)

designed to alleviate the anti-competitive concerns held by the ACCC.219
Business is generally happy with the operation of the informal merger clearance
process,220 including the speed at which the ACCC provide their decisions,221
even if it may be less certain than a formal clearance process. The last major
review of the merger laws suggested that parties did not want to be subjected to
a mandatory notification regime222 and their continued preference for the informal
process,223 despite the availability of a more certain formal process, also
219
220
221
222
223
These undertakings are legally binding and, if breached, the ACCC may enforce them in the
courts. Parties have shown a general willingness to provide the undertakings requested by
the Commission, with almost 50% of all mergers opposed between mid-1993 and mid-2001
being resolved in this way: between 1 July 1993 and 30 June 2001, of the 87 mergers
opposed, 42 (just over 48%) were resolved by way of undertakings given by the parties.
This figure appears to be rising. In the 2000-2001 financial year, of 13 mergers opposed, 10
were resolved by way of enforceable undertakings: ACCC, ACCC Annual Report (20002001).
Submissions to the Dawson Review generally expressed satisfaction with the informal
clearance system: see for example: United Energy, Submission to the Review of the
Practices Act Review 2002, 7, ANZ, above n 209, 5, Fair Trading Coalition (A Coalition of
Small Business for Trade Practices Act Reform), Submission to the Review of the
Practices Act Review 2002, 35 (the Australian merger regime is one of the fastest and least
cumbersome of those jurisdictions having merger control), Department of Agriculture,
Fisheries and Forestry, Submission to the Review of the Competition Provisions of the
Trade Practices Act 1974, Public Submission 120, Trade Practices Act Review 2002, 21,
AAPT Limited, Submission to the Review of the Competition Provisions of the Trade
Practices Act 1974, Public Submission 160, Trade Practices Act Review 2002, 14.
Some submissions expressed dissatisfaction at the time frame for clearance and suggested
the ACCC regularly exceeded the time frames they set for themselves. See, for example,
United Energy, above n 220, 7.
See, for example, Law Council of Australia, which examined the cost and inefficiency
experienced in other jurisdictions having a mandatory notification system (including the
United States and the European Union): Law Council of Australia, Supplementary
Public Submission 196, Trade Practices Act Review 2002, 14-17.
The ACCC reviewed approximately 542 mergers between 1 January 2007 and 1 February
2009, none of which were notified through the formal clearance process and none of which
sought authorisation from the ACT: Poddar, above n 165.
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suggests parties prefer the flexibility of the established informal system over the
rigidity of a formal option, even if that option would result in greater certainty.224
The Merger Review Process Guidelines (Process Guidelines) 2006225 do not
prescribe any particular information requirements, but encourage parties to
provide the following information:
background information about the parties
the structure of the market, including any relevant information about other
major market participants
the commercial rationale for the merger
an analysis of the proposed acquisition in terms of the merger factors set

out in subs. 50(3) of the Act226
an analysis of any other relevant factors relating to the competitive

implications of the merger. 227
Although the ACCC has statutory information gathering powers,228 where

additional information is required, it will normally first be requested from the
parties or interested third parties229 and it is only rarely that the ACCC resorts to
its legislative information gathering powers in relation to merger review.
Despite the fact that the informal process has no legislative backing and therefore
is not subject to any enforceable time frames, the ACCC has provided indicative
time frames for review, which vary depending on the complexity of the merger.230
224
225
226
227
228
229
230
See further Poddar, above n 165.

These supplement the substantive Merger Guidelines 2008, discussed in chapter 3 at
section 3.3.1 and provide guidance on the informal merger review process.
These are the statutory factors to be considered when determining whether a merger will
substantially lessen competition.
ACCC, Formal Merger Review Process Guidelines (June 2008), para 4.94
Trade Practices Act 1974 (Cth) section 155.
ACCC, Merger Review Process Guidelines (July 2006), para 4.102.
ACCC, Merger Review Process Guidelines (July 2006), paras 4.42-4.59. A number of
submissions to the Dawson Review discussed the time and procedures associated with
informal clearance: see, for example: SFE Corporation Limited, above n 209, 5 & 9;
International Banks and Securities Association of Australia (IBSA), Submission to the
Chapter4|Page179
The Process Guidelines provide for an initial two-eight week assessment.231 For
complex mergers a proposed timeline will be included on a public register,
including key milestone dates in the assessment process. During this time the
ACCC makes market inquiries to determine whether or not they will investigate
further.
Where, following an initial investigation, the ACCC reaches the view that a
merger does raise competition concerns requiring further investigation, parties
will be invited to provide a response to these concerns within a specified time
(normally one week).232 This is not required by legislation, but acknowledging the
extent to which parties rely on the informal merger process, it is designed to
increase the transparency of the informal review process and to enable the
ACCC to obtain further information about the proposed merger. 233
If competition concerns arise during the initial time-frame and the ACCC decides
to investigate, a statement of issues and public competition assessment will be
published and a secondary timeframe established.234 The statement of issues
will outline:
(a) issues unlikely to pose competition concerns
(b) issues that may raise concerns requiring further analysis; and
(c) issues of concern these are issues that would, on existing information,
support a finding that the transaction could represent a significant threat
231
232
233
234
93, Trade Practices Act Review 2002, 7 (claiming ACCC regularly exceeds the time frames
it sets for itself); United Energy, above n 220, 7. For a more detailed history of the clearance
process in Australia see Law Council of Australia, above n 222, 13-14.
ACCC, Merger Review Process Guidelines (July 2006). For matters that do not require
market inquiries, the review will normally be considered and decided within two-three weeks
(para 4.47). Where market inquiries are needed a decision will normally be taken within six
to eight weeks (para 4.51). The timeline begins when the ACCC receives sufficient details
of a proposed acquisition from the merger parties to start the review (para 4.45).
ACCC, Merger Review Process Guidelines (July 2006), para 4.61.
Merger Review Process Guidelines (Guidelines) 2006, para 4.60. They appear to have
been successful at increasing transparency: Poddar, above n 165, 278.
ACCC, Merger Review Process Guidelines (Guidelines) 2006, para 4.76.
Chapter4|Page180
to competition and could represent a significant threat to competition and

as such is likely to breach s 50 of the Act.235
These issues will be published on the ACCCs website for comment by all
interested parties. 236 Merger parties are given the opportunity to submit a public
reply after the publication of the statement of issues.237 The Statement of Issues
also provides merging parties with an early indication of the ACCCs views and
may enable them to explore avenues for resolving the ACCCs concerns before a
final decision is reached. These options might include the provision of
enforceable undertakings;238 the ACCC has expressed a strong preference for
structural rather than behavioural undertakings in relation to mergers.239
The length and scope of the secondary timeline will depend on a number of
factors, including the nature and complexity of the merger, the market inquiry
results, the completeness of the information that has been provided by merger
parties and the potential for the merger parties to address outstanding
competition issues through amendments to the proposed acquisition or suitable
undertakings, but will normally be completed within 12 weeks from the start of the
public review process.240
Although not required to do so by legislation, the ACCC provides reasons for its
decisions, following a decision to reject a merger or clear it subject to enforceable
undertakings, or where the merger is cleared but raises important issues or
where otherwise requested by the parties.241 The ACCC will do this through the
235
236
237
238
239
240
241
ACCC, Merger Review Process Guidelines (Guidelines) 2006, para 4.64

Trade Practices Act 1974 (Cth), s 87B TPA; Merger Review Process Guidelines (Guidelines)
2006, para 4.66.
The ACCC may publish these on its website: Merger Review Process Guidelines
(Guidelines) 2006, para 4.69-4.70.
ACCC, Merger Review Process Guidelines (July 2006) para 4.67.
ACCC, Merger Guidelines (November 2008) para 11.
The ACCC is not required to provide reasons for its informal clearance decision, but it does
publish an informal register which has become more sophisticated in recent years, following
recommendations from the Dawson Committee: Dawson Report, above n 202, 69. In their
Chapter4|Page181
release of a public competition assessment242 which details the ACCCs

analysis of various markets and associated merger and competition issues.243
This will normally be issued within two weeks of a decision, but may take longer
in the case of complex mergers. 244 The ACCC will maintain confidentiality
obligations throughout the process. 245
For proposed mergers that raise competition concerns which cannot be alleviated
by the provision of enforceable undertakings, a refusal of clearance from the
ACCC leaves the parties with four options. First, they may proceed and risk
almost inevitable challenge by the ACCC which, if successful, is likely to result in
an injunction if obtained prior to merger, or divestiture if subsequent to merger, as
well as substantive pecuniary penalties.246 Second, they might seek formal
clearance which would be subject to an appeal to the ACT. Third, they may seek
a declaration from the Federal Court that a merger will not SLC.247 Finally, if
merging parties believe their merger will generate such public benefits that it
ought to be allowed to proceed notwithstanding the anticompetitive
242
243
244
245
246
247
Report, the Committee recommended that the ACCC be required to provide reasons for
their decision in some cases. Specifically, adequate reasons should be provided where
informal clearance is denied, or cleared subject to the parties providing enforceable
undertakings and where the parties request reasons. See also ACCC, ACCC to Publish
Reasons for its Merger Decisions (Media Release 238/03, 12 November 2003). Currently
the ACCC, Merger Review Process Guidelines (July 2006) paras 4.84-4.88 set out the
circumstances in which the ACCC will provide reasons for its decision making, referred to as
public competition assessments.
ACCC, Merger Review Process Guidelines (July 2006) para 4.87. In addition to enhancing
transparency and accountability the ACCC hopes these public assessments will provide
merging parties and advisers with a better understanding of the ACCCs approach to
merger proposals. (para 4.86)
Trade Practices Act 1974 (Cth) s 76(1A)(b).
This is likely to be expensive and there is not an automatic right to such declaration.
However, it is likely that if the merger is notified and the ACCC indicates it will challenge the
merger then this would provide the basis for seeking such declaration. See Australian Gas
Light Company v ACCC (No 3) [2003] FCA 1525. However, it remains unclear whether the
Federal Court will exercise its jurisdiction to provide declaratory relief where the parties have
the option of seeking formal clearance and appealing to the ACT; the AGL case was
decided before there was the option for formal clearance.
Chapter4|Page182
consequences, parties may seek authorization.248 This is separate from the

clearance process, the latter focussing solely on the competitive consequences
of a proposed merger.
Formal clearance process
Since 2007249 parties have had the option of seeking formal clearance for a
merger which, if granted provides them with protection from subsequent legal
challenge250 from either the regulator or interested third parties. The merging
parties may appeal to the ACT if they are unhappy with the decision of the
ACCC,251 but third parties have no right to appeal the ACCCs decision.252 The
new voluntary formal merger clearance process exists side by side with the
ACCCs informal clearance process.
The voluntary nature of this process is designed to ensure both parties and the
ACCC do not suffer the costs and other administrative burdens associated with a
compulsory notification system while retaining key benefits of certainty and
transparency.253
Application must be made using a specified form254 and a fee of $25,000 is
payable.255 Clearance cannot be granted for a merger that has been
248
249
250
251
252
253
254
255
TPA, ss 88(9) and 90(9). See also Maureen Brunt, The Use of Economic Evidence in
Antitrust Litigation: Australia (1986) 14 Australian Business Law Review 261, 265.
The Trade Practices Legislation Amendment Act (No 1) 2006 came into operation on 1
January 2007. Until 2007 the ACCC operated only the voluntary informal clearance system
for merger proponents.
This implements Dawson Report recommendation 2.2.1: Dawson Report, above n 202, 70.
Trade Practices Act 1974 (Cth), s 111.
The Dawson Committee acknowledged that this process would effectively remove the rights
of interested third parties to challenge a merger once clearance is given, but believed this
could be addressed by requiring the ACCC to engage in appropriate consultation with
interested third parties: Dawson Report, above n 202, 64.
This is also consistent with current practice in New Zealand: see Dawson Report, above n
202, 62.
Trade Practices Regulations 1974 (Cth), Form O.
Trade Practices Regulations 1974 (Cth), Schedule 1B, item 11. This figure may be altered
by regulation.
Chapter4|Page183
consummated256 and parties who make an application for formal clearance must
undertake not to make the proposed acquisition while the application is being
considered by the ACCC257 or, on appeal, by the ACT.258 Formal merger review
process guidelines have been published to assist parties in interpreting these
requirements.259
The ACCC has 40 days to review a proposal and make a decision. This may be
extended only at the request of the applicant. If no decision is given within 40
days clearance is deemed refused.260 An ACCC clearance determination will
either:261
Grant clearance
Grant clearance subject to conditions; or
Refuse clearance
The clearance may be limited to a specified period, which will ordinarily not
exceed six months.262 Provision is also made for modifying or revoking
clearances if certain conditions are met.263
The merger proponents (not third parties) then have the opportunity to appeal
within 14 days to the ACT which has 30 days to review the material and reach a
decision whether to clear a merger, refuse clearance or provide a conditional
clearance.264 The decision of the ACT is final.
256
257
258
259
260
261
262
263
264
Trade Practices Act 1974 (Cth) s 95AN(2)

Trade Practices Regulations 1974 (Cth), Form O.
Trade Practices Regulations 1974 (Cth), Form W.
ACCC, Formal Merger Review Process Guidelines (June 2008).
Trade Practices Act 1974 (Cth) s 95AO(1). See also Dawson Report, above n 202, 70
(recommendation 2.2.3).
Trade Practices Act 1974 (Cth) ss 95AM and 95AP.
ACCC, Formal Merger Review Process Guidelines (June 2008) para 3.115.
Trade Practices Act 1974 (Cth), ss 95AR and 95AS.
Trade Practices Act 1974 (Cth), s 111.
Chapter4|Page184
Early fears that the introduction of a parallel formal notification procedure would
effectively mean the end of the informal system in Australia, and the benefits
associated with that process, have not been realised.265 There may be a number
of explanations for this,266 key among them include familiarity with the existing
system and the increased complexity and cost associated with the formal
notification requirements267 and in this respect it has been compared with the
ECs onerous notification form.268 Strict time frames might also give rise to the
perception that mergers are more likely to be rejected under the formal system.269
In addition, as with the most other mandatory jurisdictions, if there is an error in
the filing of a notification under the formal clearance process, the notification may
be declared invalid, resulting in additional delay and uncertainty.270
Authorization
As discussed in chapter three, where parties can demonstrate that, despite the
likely anti-competitive consequences of their merger, the merger would result in
such benefit to the public it should be allowed to take place271 they may apply
directly to the ACT for authorization to consummate their merger. The process
requires formal application to be made on a set form272 and payment of a
$25,000 application fee273 and is rarely pursued by merging parties.274
265
266
267
268
269
270
271
272
273
Graeme Samuel, Balancing the Competing Pressures (Speech delivered at the National
Press Club, 12 November 2003) 8-9.
See further Poddar, above n 165, 278, who claims that the continued popularity of the
informal notification process is driven by the benefits of, and familiarity with, the process;
improved transparency post-Dawson; combined with a relative lack of familiarity with the
formal merger review and authorisation procedures. Additionally, the final form that the
formal merger review procedure has taken appears to discourage formal clearance
applications.
See, eg, Poddar, above n 165, 279-281.
Poddar, above n 165, 279.
Samuel, above n 265, 10.
See Trade Practices Act 1974 (Cth) ss 95AZH(1).
Trade Practices Regulations 1974 (Cth) Form S.
Trade Practices Regulations 1974 (Cth), Schedule 1B, item 13.
Chapter4|Page185
4.3.2 United Kingdom

Notification of mergers is voluntary under the UK regime and OFT Guidelines
expressly state that the fact that a merger has not been notified does not
negatively affect the OFTs substantive evaluation of the competitive effects of a
merger.275 However, as in Australia, parties frequently choose to notify the
regulator.276 Even where parties do not notify the OFT (and often even when
they do) the OFT will investigate a merger based on its own market intelligence
or following a third party complaint.277 The OFT may also investigate completed
mergers for up to four months after completion. 278 Parties choosing to notify the
OFT of their proposed merger may do so through informal advice, pre-notification
discussions, statutory voluntary pre-notification (sign a merger notice) and
informal submissions.279
As in the US, the UK operates two administrative bodies. However, unlike the
position in the US, their jurisdiction in relation to mergers is complimentary rather
than concurrent. The OFT is responsible for obtaining information about
mergers, including receiving notifications.280 It conducts a review of those
mergers anticipated or completed and it refers any which it believes may
result in a substantial lessening of competition in a UK market to the Competition
Commission for further investigation. The OFT also must advise the Secretary of
274
275
276
277
278
279
280
There have been no authorisation applications since the introduction of new procedures in
2007.
Office of Fair Trading, Mergers Jurisdictional and Procedural Guidance (OFT527, June
2009) para 4.2.
United Kingdom, Merger Notification and Procedures Template: United Kingdom (2
February 2006), International Competition Network, 1(A).
2009) para 4.15.
2009) para 3.3.
2009) para 4.26.
2009) para 4.8.
Chapter4|Page186
State on any merger which might fall within the scope of the public interest or the
special public interest provisions of the Act. 281
FIGURE 4.5 UNITED KINGDOM ADMINISTRATIVE AND JUDICIAL
There are a number of ways that merging parties may notify the regulator of a
proposed merger. First, they might provide informal advice where they wish to
obtain advice or opinion about a merger which has not yet been made public.282
Second, they might engage in pre-notification discussions if they intend to
subsequently notify the OFT of a merger.283 Third, and most commonly, they
may make informal submissions. Although there is no set timetable, when an
informal submission is made the OFT will aim to reach a decision within 40
281
282
283
2009) para 1.5. See also Barry J Rodger and Angus MacCulloch, Competition Law and
Policy in the EC and UK (4th ed, 2009) 325.
2009) paras 4.28-4.41.
2009) paras 4.42-4.48.
Chapter4|Page187
days.284 Finally, parties might make a formal statutory pre-notification using a

merger notice.285 This option is not available for completed mergers or mergers
not yet made public. Where the formal statutory form is used the merger may be
considered by the OFT within 20 working days, with a maximum extension of 10
working days at the OFTs discretion286 and a fee is payable. The short time
frame means that formal statutory notification is not suitable for mergers that
raise material competition concerns.287
Where the OFT determines that there is a relevant merger situation that has
resulted, or may be expected to result, in a substantial lessening of
competition,288 the matter will be referred to the Competition Commission for
further investigation. To constitute a relevant merger situation the merger must
involve turnover in the UK of more than 70 million (turnover test) or, as a result
of the merger the enterprises would supply or acquire at least 25 per cent of all
the particular goods or services of the kind both companies previously supplied in
the UK, or a substantial part of the UK (share of supply test).289
The Competition Commission is an independent non-governmental body
consisting of members and a staff secretariat with expertise in competition
matters. 290 In addition to making determinations on mergers that are referred to
284
285
286
287
288
289
290
2009) paras 4.49-4.51; 4.63-4.70.
2009) paras 4.49-4.51; 4.52-4.62. See also Rodger and MacCulloch, above n 281,325-326.
2009) para 4.52.
2009) para 4.54.
2009) para 9.7.
2009) para 3.4. See also Rodger and MacCulloch, above n 281, 316-317.
2009) para 1.11. The Competition Commission replaced the Monopolies and Mergers
Commission (MMC) on 1 April 1999. For a discussion of the history of the MMC and
development of the current merger laws and processes see Rodger and MacCulloch, above
n 281, 308-312.
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it by the OFT, the CC makes recommendations to the Secretary of State on

matters referred to it under the public interest regime.291
The Secretary of State has a role in setting merger fees and jurisdictional
thresholds and may also intervene for mergers that do not qualify on normal
jurisdictional tests, such as defence, newspaper or broadcasting mergers which
are considered under a special public interest regime. 292

4.4.1 Introduction
In this section the various procedural approaches will be analysed to determine
which is the most suitable for supporting the substantive law in achieving the goal
of protecting or enhancing global modern consumer welfare. This involves an
assessment of which process best facilitates the prevention of mergers which
would interfere with this goal, taking into consideration the social and economic
welfare costs and benefits associated with implementing and enforcing the
regulatory requirements.
The effectiveness of procedural regulation of mergers, while dependent on the
substantive law, is arguably more important than the substantive law. The latter
will be most effective at deterring and preventing anti-competitive mergers where
appropriate procedural mechanisms are in place to detect, prevent or unravel
mergers which contravene the substantive laws.293 The substantive law absent
291
292
293
2009) para 1.13-1.15.
2009) para 1.15.
In addition to detecting anti-competitive mergers, an active merger policy has the benefit of
deterring those mergers. See generally Jo Seldeslachts, Joseph A Clougherty and Pedro
Pita Barros, 'Settle for Now but Block for Tomorrow: The Deterrence Effects of Merger Policy
Tools' (2009) 52 Journal of Law and Economics 607 who conclude (at 631) that blocking
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enforcement is analogous to an unloaded gun it provides meaningful

deterrence only to the extent that the targets mistakenly believe it to be loaded.
Effective enforcement procedures add bullets to the gun, enabling enforcement
agencies to provide both genuine deterrence and effective remedies for
infringement. Once armed with effective weapons, care must be taken to wield it
in an appropriate manner. Too many bullets fired in the wrong direction (to
mergers that do not and are not likely to SLC) may lead to over-deterrence and
prevent society enjoying the benefits of efficiencies that would otherwise be
obtained from those mergers; conversely, failure to fire bullets at appropriate
targets (those mergers likely to SLC) will diminish the effectiveness of the
enforcement weapon.
All competition authorities, whether imposing mandatory PMN requirements or
not, recognize the benefits of detecting potentially anti-competitive mergers at an
early stage so as to prevent the economic and social harm from structural change
that a merger might otherwise bring about. The desirability of preventing anticompetitive mergers justifies the regulatory intrusion into efficient as well as anticompetitive mergers and the associated costs.294
To be effective, the cost of PMN (financial and otherwise) must be less than the
cost occasioned by not having such a system. To be considered optimal, as well
as effective, it must achieve its goals of detection and prevention at the least
possible cost to society.295
This is neither a simple matter to achieve or assess, and is further complicated by
the varied nature of economies around the globe and the increase in the number
of mergers subjected to multiple regulatory responses. For example, the different
294
295
mergers is effective in deterring future mergers (although negotiated settlements are

ineffective in deterring such mergers).
See, for example, European Commission, Mergers Overview, European Commission,
Competition <http://ec.europa.eu/comm/competition/mergers/overview_en.html> at 21
September 2007.
See chapter 2, above.
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scale and concentration of domestic markets, even amongst OECD countries,

means that it is possible even probable that the cost-benefit balance for each
might be different.296
In addition, the optimal procedural approach might differ depending on whether a
merger affects only local, regional or international markets, in particular because
the average cost per jurisdiction notified both for regulators reviewing a
transnational merger and for parties filing multiple notifications will almost
certainly be lower in such cases,297 even where the total cost of compliance will
be higher as a result of the multiple filings. 298
Consequently, this analysis is divided into three parts. First, an assessment is
made of the relative merits of each broad procedural approach to merger
regulation at a national level. Second, a determination is made about whether or
not there is a single optimal approach for national regulators. Finally, an
assessment is made of whether a different approach is required for transnational
mergers in order to obtain the same or superior welfare outcomes.
The traditional case for PMN rests on the desire for authorities to have the
opportunity to investigate mergers prior to consummation and was first formally
adopted in the US in 1976 at a time when mergers were predominantly local in
nature and there were no other mandatory notification regimes that might multiply
the regulatory burden for parties. At the time, it represented an apparently fair
and sensible mechanism by which the authorities could avoid the structural
296
297
298
See generally, Michal S Gal, 'Market Conditions Under the Magnifying Glass: The Effects of
Market Size on Optimal Competition Policy' (2002) 50 American Journal of Comparative Law
303, Michal Gal, 'The Effects of Smallness and Remoteness on Competition Law - The Case
of New Zealand' (2007) 14 Competition and Consumer Law Journal 292 and Michal S Gal,
Competition Policy for Small Market Economies (2003).
The cost to the first notified or most affected jurisdiction might remain static or potentially
even increase if it engages in cooperative discussions and information sharing with other
interested regulators.
The cost to merging parties will increase, although normally not proportionately to the
number of jurisdictions involved. See chapter 8.
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damage caused by anti-competitive mergers and there is no doubt that PMN

regimes have had a profound affect on the enforcement of merger laws.299
Since that time, however, both the volume and range of transnational mergers
has dramatically increased and the number of regimes imposing such
requirements (currently in excess of seventy300) continues to expand. In
addition, informational requirements have increased and grown in complexity,
owing in part to the development of digital technologies301 as well as to advances
in economic analysis. As a consequence, the administrative time burdens on
business and authorities have burgeoned, arguably beyond the optimal level to
achieve the initial goals.302 At the very least, the cost-benefit equilibrium has
been disrupted by these developments and, as a result, a clear tension has
emerged between the regulatory costs associated with PMN and the cost to
society of allowing some anti-competitive mergers to proceed undetected.
4.4.2 Options for merger regulation
Regulators charged with enforcing and regulating merger laws have three broad
choices in relation to notification:
No pre-merger notification
Voluntary pre-merger notification
Mandatory pre-merger notification
In addition, regulators might adopt a hybrid approach involving two or more of

these choices. Most frequently this takes the form of a mandatory PMN
299
300
301
302
See generally Baer, above n 32.

See Chongwoo and Shekhar, above n 17, 1, ICN, Merger Notification Filing Fees, above n
162, 2 and Chris Noonan, The Emerging Principles of International Competition Law (2008)
62.
See Sims, Jones and Hollman, above n 15, 62, observing that the average number of
electronic pages gathered form a merging party for the transactions we have worked on in
the 2006-08 time period was over 6 million pages.
See chapter 8.
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combined with a voluntary PMN303 or no PMN304 for those mergers falling outside
the scope of the mandatory system.
4.4.3 No merger notification
Within the OECD only Luxembourg has no available notification regime, although
firms in that country are subject to the EUMR when relevant thresholds are met.
Consequently, most transnational mergers which do raise competition concerns
will still be subject to at least one formal notification regime.
A refusal to adopt any mechanism for mandatory or voluntary notification of
mergers does not deprive regulators of the power to intervene to prevent or
disband a merger contravening substantive law, but requires the authorities
themselves to identify and investigate such mergers or proposed mergers.
The key benefits of eliminating a PMN process are:
Avoidance by parties of the cost and delay associated with notification,

particularly for those mergers raising no anti-competitive concerns.305
Avoidance by regulators of the cost of investigating many of the mergers

that raise no competitive concerns.
There are, however, a number of important detriments:
Reduced ability on the part of regulators to identify and prevent anticompetitive mergers in their incipiency.
303
304
305
For example, in Canada voluntary formal notification is available where mandatory

notification thresholds are not met (although significant fees mean this option is rarely used).
Other countries permitting voluntary notification where mandatory thresholds are not met
include Ireland and Korea.
For example, the United States.
For those that do raise competition concerns, the likelihood that interim injunctive relief
would be sought might result in a pre-merger review process that is equally or more costly
than the existing process.
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Increased investigatory costs associated with identifying and prosecuting

potentially anti-competitive mergers.
The increased likelihood that anti-competitive mergers will proceed and

affect structural change.
Increased likelihood of post-merger litigation.
Reduction in legal certainty for parties.306
Increased risk that the threat of post-merger litigation may deter procompetitive (as well as anti-competitive) mergers.
The primary and perhaps only justification for not providing parties with an
option for notification is the resource cost associated with administering a review
process and, possibly, reluctance on the part of regulators to give definitive
advice on the legality of a merger before witnessing its effects.
The biggest drawbacks of eliminating an option for PMN are that it places the
onus on the regulators to monitor the markets for potentially anti-competitive
mergers and may not provide parties with an opportunity to obtain advice about
the legality of their merger in advance, thereby risking subsequent litigation and
possible divestiture. This risk, especially where the relevant authority has a
history of vigorous pursuit of anti-competitive mergers post-consummation, may
result in over-deterrence.
In the absence of mandatory PMN requirements, it is inevitable that some anticompetitive mergers will take place and parties have strong incentives for
speedily and surreptitiously consummating suspect mergers and then protracting
306
This has been the experience in the US, where the bulk of case law relating to mergers
derives from those mergers which do not meet mandatory notification thresholds. The
number of mergers falling outside the scope of the HSR notification thresholds has
increased in recent years: see Bell, above n 33, 69: Ironically, when it is a close call
whether the agencies will challenge a transaction, the parties and their antitrust counsellors
have less information and greater uncertainty and are therefore worse off when the
value of the transaction is low.
Chapter4|Page194
the ensuing litigation.307 Prior to the introduction of mandatory PMN in the US,
the experience was that the majority of problematic mergers were not detected in
sufficient time to seek appropriate preliminary relief and that post-merger relief
generally proved unsatisfactory, 308 with one US commentator suggesting that
prior to the introduction of mandatory PMN, close to 70 percent of the
problematic mergers were not detected in time to seek preliminary relief.309
This problem might be less acute in smaller, concentrated domestic markets
where it will be more difficult for any merger of competitive consequence to
complete undetected. Where that is the case, the risk of anti-competitive
mergers proceeding and causing structural harm might be so small that it cannot
justify the costs associated with establishing a formal notification process (even if
only informal). It will, however, be rare that a domestic market is so concentrated
that the risk of non-detection is so small as to remove the need or desire for any
form of PMN system. Even where authorities might have detected a merger in
the absence of mandatory PMN, this detection and preliminary investigation will
generally require greater expenditure and often a degree of speculation to
obtain the same information that the parties have at their disposal. For any
individual merger, since notification provides the regulator with vast amount of
information about the proposed merger, it seems reasonable to assume that the
cost of review is lower than the cost of investigating a merger that was not
notified.310
In addition, although the risk of non-detection may be relatively small in such a
market, the consequences associated with failing to detect and prevent
anticompetitive mergers will be considerably higher. Concentrated markets are
naturally less able to absorb and correct anti-competitive structural harm than are
307
308
309
310
Baer, above n 32, 828.

See, eg, Federal Trade Commission and Department of Justice, Hart-Scott-Rodino Annual
Report, above n 69, 19.
Chongwoo and Shekhar, above n 17, 9.
Chapter4|Page195
competitive markets, increasing the importance of early detection and

prevention.311
The risk that the absence of a formal PMN system will result in more anticompetitive mergers going undetected, or being detected only after harmful
structural change has occurred, is such that it can not be considered optimal
regulatory approach, even (and perhaps especially) in small economies where
detection might otherwise occur in most cases.
4.4.4 Mandatory pre-merger notification
Mandatory PMN regimes require that parties notify regulators of their proposed
merger prior to consummation and, in most cases, require that closure be
deferred until the merger has been reviewed and cleared by the regulators. The
requirement for mandatory PMN is contingent on the proposed merger exceeding
set monetary and/or jurisdictional thresholds (the trigger).
Mandatory PMN is designed to identify and facilitate the review of mergers
raising potentially anti-competitive concerns before structural harm to the market
occurs. Prevention or pre-consummation modification of mergers likely to SLC is
appropriately considered by the authorities more desirable and effective than
post-merger litigation and remedies. It is not surprising, as a result, that this
option is appealing to regulators and has been adopted by most OECD countries.
The key benefits of mandatory PMN include:
The ability to identify most anti-competitive mergers prior to

consummation.
The opportunity it provides regulators to prevent or modify through

negotiated remedies potentially anti-competitive mergers prior to
consummation.
311
See, eg, Gal, Competition Policy for Small Market Economies, above n 296,195.
Chapter4|Page196
The increased certainty it gives to parties regarding the legality of their

merger.
The incentives it provides parties to comply with regulatory requests for

information.
The key detriments include
The cost to merging parties associated with compliance.
The delay of closure which might prevent early realisation of merger

efficiencies and, in some cases, may result in the abandonment of procompetitive mergers.
The cost to regulators of reviewing merger notifications, particularly where

the merger notified raises little or no anti-competitive concerns.312
The leveraging power it gives to regulators to extract information from

parties.313
Identification of anti-competitive mergers

The primary justification for any system of mandatory PMN lies in its ability to
identify, in advance of consummation,314 mergers that might generate anticompetitive consequences, facilitating the prevention or modification of those
mergers in their incipiency. This objective of early identification appears to have
been accomplished, in that there is strong evidence that the mandatory systems
have proven effective in identifying most anti-competitive mergers prior to
consummation.315 There is, arguably, an increased importance for mandatory
312
313
314
315
In some cases this will be offset by fees to the parties.

This may be either a benefit or a detriment depending on how this power is used by
regulators. See, eg, Sunshine and Seward, above n 31, 185, who claim that the FTC and
DOJ staffs are skilled at recognizing when the parties are unwilling to litigate and often
leverage that skill to obtain favourable negotiated remedies through consent decrees.
See, eg, Frederick G Hilmer, Mark Rayner and Geoffrey Taperell, National Competition
Policy (Report by the Independent Committee of Inquiry, Commonwealth of Australia, 25
August 1993) (Hilmer Report) 83.
See Federal Trade Commission and Department of Justice, Hart-Scott-Rodino Annual
Report, above n 69, 18-19. See also Baer, above n 32, 831, Shekhar and Williams, above n
Chapter4|Page197
PMN as a tool for identifying potentially anti-competitive mergers in todays

dynamic, and increasingly globalized, economy, which has experienced a
tremendous growth in merger activity in the last few decades.316 Conversely,
technological improvements in the monitoring and dissemination of information
might make detection more likely than it was when mandatory PMN was first
introduced in the mid-1970s.
The effectiveness of PMN will depend on the suitability of thresholds designed to
capture anti-competitive mergers. It is clearly possible to identify all anticompetitive mergers (assuming compliance with notification laws) by requiring all
mergers to be notified. However, this is appropriately considered to be unduly
burdensome for parties to small transactions whose mergers raise no competition
concerns as well as for regulators. Consequently, thresholds have been
developed in all jurisdictions operating mandatory PMN regimes which are
targeted at the identification of mergers likely to raise competition concerns.
Identifying the appropriate criteria to be used in determining which mergers
should be notified is, however, a difficult task. In an effort to ensure thresholds
are objectively determinable by merging parties, they are invariably and
perhaps unavoidably couched in monetary terms which pay little or no regard to
the specific circumstances of the transaction.317 Consequently, often whether
notification is required will depend entirely on the size of the transaction rather
than its potential effects on competition.
While there will, in many cases, be a correlation between size and potential effect
on competition, this is not invariably the case. Consequently, these crude
316
317
203, 384 and W Blumenthal, Introductory Note (1997) 65 Antitrust Law Journal 813.
Compare Bell, above n 33, observing that since the increase in notification thresholds in
2001 an increasing number of potentially anti-competitive mergers have fallen below the
thresholds.
Baer, above n 32, 826. Baer continues: In fiscal year 1996 a total of 3,087 reportable
transactions were filed In fiscal year 1979, first full year of reporting under the pre-merger
rules, only 861 transactions were filed. (footnotes omitted).
See, eg, Pfunder, above n 25, 905. See also Shekhar and Williams, above n 203, 385.
Chapter4|Page198
thresholds will inevitably be both under-inclusive and over-inclusive. They will be

under-inclusive because they will ignore small but competitively significant
transactions318 and they will be over-inclusive because, in order to capture most
anti-competitive mergers, they will also necessarily capture a high proportion of
mergers unlikely to cause competitive harm.
There is a clear preference among law-makers and regulators for overinclusiveness, evidenced by the fact that only a very small proportion of mergers
notified under PMN raise any significant concerns for regulators.319 In most
jurisdictions with mandatory PMN regimes less than 5% of reported transactions
are subject to second, or detailed, review,320 and even less are found to warrant
injunctive relief. This is the case even after many jurisdictions have conducted
reviews in recent years resulting in an increase in threshold levels for
notification.321 The corollary is that 95% or more of notified mergers raise no
competition concerns, yet are subjected to the expense and inconvenience of
formal notification requirements.
318
319
320
321
In the US, in particular, there is clear evidence that a number of mergers raising competition
concerns fall outside the scope of this threshold, with more than one third of all mergers
challenged in the Courts in the US in the 2008 fiscal year falling below notification
thresholds: see Timothy P Daniel, 'Whither Merger Review? Looking Forward While Looking
Back' (August 2009) The Antitrust Source 1, 3 (noting that in that year eleven mergers were
litigated and four involved mergers falling below the notification threshold). See also Federal
Trade Commission, Performance and Accountability Report: Fiscal Year 2004 (2004) 44,
noting that the FTC now devotes more attention to the identification of unreported, usually
consummated, mergers that could harm consumers. See generally Bell, above n 33.
In the US between 1998 and 2001 only approximately 2.4% of the thousands of mergers
notified each year receive requests for stage 2 reviews: Davies, Merger Control 2003, above
n 174, 12. See also ICPAC Final Report, above n 12, 4.
See, for example, Pfunder, above n 25.
See, eg, ICN, Setting Notification Thresholds, above n 13, 7. See also Szentesi, above n 6,
noting the recent increase in size of transaction thresholds in Canada.
Chapter4|Page199
Prevention of anti-competitive mergers

The purpose of identification is to block or modify mergers that would otherwise
proceed and cause anti-competitive structural harm to the relevant market; thus,
the core benefit of identification through PMN lies in the prevention of anticompetitive market structures.322
Although preventing unlawful anti-competitive harm is always to be preferred over
allowing it to occur and then seeking remedial orders, this is particularly important
in the case of mergers because of the difficulties associated with obtaining
effective post-merger remedies for anti-competitive mergers occasioning
structural harm.323 It is, therefore, not surprising that the primary justification
advanced for requiring pre-merger notification is to ensure that authorities have
the opportunity to prevent conduct that could bring about significant and
detrimental structural change to a market.324
322
323
324
See, eg, Shekhar and Williams, above n 203, 383-384.

See, eg, Commonwealth of Australia, Mergers, Takeovers and Monopolies: Profiting from
Competition (House of Representatives Standing Committee on Legal and Constitutional
Affairs, Canberra, May 1989) (Griffiths Report) 22. There is a significant body of evidence
suggesting that post-consummation merger remedies are almost always unsatisfactory in
restoring the competitive market conditions that existed prior to the merger: see, eg,
Kenneth G Elzinga, 'The Antimerger Law: Pyrrhic Victories?' (1969) 12 Journal of Law and
Economics 43; Jonathan Green and Gianandrea Staffiero, 'Economics of Merger Control' in
The 2007 Handbook of Competition Economics: Global Competition Review Special Report
(2007) 8 and Ariel Ezrachi, Limitations on the Extraterritorial Reach of the European Merger
Regulation [2001] ECLR 137, 139 ( mergers are very difficult to disentangle). Compare
Joe Sims and Deborah P Herman, 'Twenty Years of Hart-Scott-Rodino Merger Enforcement:
The Effect of Twenty Years of Hart-Scott-Rodino On Merger Practice: A Case Study In The
Law of Unintended Consequences Applied To Antitrust Legislation' (1997) 65 Antitrust Law
Journal 865 and J William Rowley, Omar K Wakil and A Neil Campbell, 'Streamlining
International Merger Control' (Paper presented at the EC Merger Control 10th Anniversary
Conference, Brussels, 14 September 2000) 8 who question whether pre-merger notification
is needed because it is only in a very limited number of cases that 'it will ... be difficult or
impossible to remedy a merger satisfactorily after it is consummated.
See, eg, Sims and Herman, above n 323, 825-863, Blumenthal, above n 315, 813-823,
Ezrachi, above n 323, 139, Whish, above n 10, 806, Gencor Ltd v Commission (T-102/96)
[1999] ECR II-753, para 106, Manfred Neumann, Competition Policy: History, Theory and
Practice (2001) 114 and Chongwoo and Shekhar, above n 17, 1.
Chapter4|Page200
Inadequacy of post-merger remedies was the catalyst driving the development of

mandatory PMN in the US:
The poster child of the legislative debate was the tortured litigation history of
United States v El Paso natural Gas Co involved the governments postacquisition challenge [of the merger] After seven years of litigation the
Supreme Court ruled for the government and ordered divestiture without delay.
. Divestiture took an additional ten years, meaning that it took a total of
seventeen years before the government could cure an anticompetitive
acquisition. The case went to the Supreme Court so many times some people
lost count. It was estimated that El Paso derived profits of $10 million for every
year it retained the illegally acquired company. All of this took place in an effort
to enforce Section 7 of the Clayton Act, a statute whose purpose was to stop
anticompetitive acts in their incipiency. 325
Although divestiture in that case was successful it came at an enormous cost:

While there is no tally of the total cost it ran into many millions, employed
hundreds of lawyers, accountants and others, consumed great quantities of the
scarce resources of our courts, and left a noncompetitive market structure in the
gas industry in the west for a decade after that market structure had been
declared unlawful by our highest court. Another incalculable, but very significant
cost was the substantial loss of time and talents of key El Paso executives from
the important jobs of running a major utility and developing new sources of
energy supplies in a time of growing energy shortages because of the inordinate
demands made upon them in the defense of this antitrust proceeding. 326
In addition to taking a long time, post merger remedies often prove ineffective.327
In cases where the agencies failed to win a preliminary injunction, but ultimately
obtained a divestiture order after protracted litigation, so much time had passed
that there often was such a significant scrambling of the business, employees,
325
326
327
Baer, above n 32, 826-827.

The Antitrust Improvements Act of 1975: Hearings Before the Subcomm. on Antitrust and
Monopoly of the Senate Judiciary Comm. on S. 1284, 94th Congress, 1st Session 66 (1975)
428 (statement of David K Watkiss), quoted in Baer, above n 32, 828. See also Baer, above
n 32, 829-830.
In Elzinga, above n 323, 51-51, Elzinga concludes that 90 percent of the cases in his study
resulted in relief that was either unsuccessful or deficient (quoted in Baer, above n 32,
831).
Chapter4|Page201
and customers of the merged companies that the victory was, in the words of
Congress, Pyrrhic.328
Although the view that post-consummation remedies are always, or almost

always, unsatisfactory is not unanimously held,329 it remains the dominant view
and enjoys significant evidentiary support as well as the benefit of being
intuitively correct; following integration of corporate assets and structure, the task
of effectively unravelling these changes, commonly analogised as unscrambling
the eggs, will be difficult and disruptive to those involved, even if it can effectively
put an end to the anti-competitive harm occasioned by the merger.330
Negotiated remedies
In most countries operating PMN regimes it will be possible, in appropriate cases,
for parties to negotiate with the regulators for remedies designed to alleviate anticompetitive concerns prior to the consummation of the merger. This is more
advantageous to parties (at least in most cases) than having a merger
successfully (or even unsuccessfully) challenged by the regulator, in that it
involves much less disruption to corporate structure than a subsequent
divestiture order. By providing parties with the opportunity to negotiate with the
regulator before the merger is consummated,331 negotiated remedies can help to
avoid costly litigation. Moreover, the negotiation may result in an outcome with
higher social welfare by conditionally permitting a largely efficient merger that
might otherwise have been prohibited.332
328
329
330
331
332
William J Baer and Ronald C Redcay, Solving Competition Problems in Merger Control: The
Requirements for an Effective Divestiture Remedy (2001) 69 George Washington Law
Review 915, 917.
See, eg, Green and Staffiero, above n 323, 8 and Rowley, Wakil and Campbell, above n
323, 8.
See generally Richard Burnley, 'An Appropriate Jurisdictional Trigger for the EC Merger
Regulation and the Question of Decentralisation' (2002) 25 World Competition 263, 276.
Chongwoo and Shekhar, above n 17, 3 (footnote omitted).
Some claim that this is the main rationale for, and the potential benefit of, compulsory
notification: Chongwoo and Shekhar, above n 17, 3 (footnote omitted). See generally Baer
and Redcay, above n 328.
Chapter4|Page202
Although often beneficial, the availability of negotiated remedies may also be

detrimental if inappropriately used by regulators to leverage remedial outcomes
which do more than what the substantive law would require.333 This problem is
exacerbated by the fact that in most jurisdictions operating formal PMN regimes,
no substantial body of case law existing to assist parties in assessing the merits
of any possible remedy under consideration. The precedent that has developed
to guide parties is, therefore, largely derived from administrative or quasi-judicial
rulings of the regular.
However, while this leveraging power is often criticised, there are a number of
factors suggesting it might not be as harmful as is sometimes suggested. First,
parties are in almost all cases free to pursue litigation on the substantive law (or,
in the EU, to appeal) should they wish to do so. Second, negotiated outcomes
are a common feature of the law (eg criminal) and may be more desirable than
either blocking a merger, clearing an anti-competitive merger or proceeding to full
litigation.334
Certainty
The vast majority of mergers subjected to notification requirements are at no risk
of infringing substantive laws. The ability of mergers to simultaneously generate
welfare and reduce it means that, in many cases, firms will not have a clearly
formed view about whether their proposed merger will or will not be found to
contravene the substantive law. In this way, obtaining advance clearance makes
sense not only for the regulators who have an interest in preventing anticompetitive mergers, but also for the parties, who risk enormous transactional
333
334
Some argue that mandatory pre-merger notification has, at least in the US, removed
antitrust law relating to mergers from the courts and transferred it to regulatory agencies
who use the power they have gained to improperly extract concessions from applicants.
Shekhar and Williams, above n 203, 384 citing Sims and Herman, above n 323.
See, eg, Baer, above n 32, 840.
Chapter4|Page203
and possibly divestiture costs associated with a negative post-merger ruling or

even successful post-merger litigation.335
Mandatory PMN can provide parties with near or absolute certainty that their
merger will not be challenged.336 Although in some jurisdictions mergers might
be challenged even if the regulators raise no concerns following notification,337 in
most cases parties whose mergers are not challenged during the notification
period can proceed with confidence that they will not subsequently be
challenged.
Arguably, mandatory PMN also provides greater certainty about the timing of
outcomes, at least where the PMN regime includes strict deadlines for the
regulators.338 This may assist with business planning, both for the parties
themselves and interested third parties.339 However, this benefit should not to be
overstated; while for mergers raising limited or no competition concerns this
might hold true, for those subjected to detailed investigation, particularly in
multiple jurisdictions, this level of certainty regarding timing is considerably
diminished.
Conversely, parties to mergers that do not meet mandatory PMN triggers, but
which nevertheless have the potential to significantly impact on competition, are
frequently left without any opportunity to obtain legal certainty about the validity of
their merger prior to closure.
335
336
337
338
339
See, for example, Burnley, above n 330, 276.

Pre-merger evaluation might also provide those parties to efficient mergers with a beneficial
certainty for future planning that might be seen to be worth the cost in time and money that
comes with pre-evaluation.
See, eg, Consolidated Gold Fields v Anglo-American Corp 698 F Supp 487 (SDNY 1988),
as discussed in Noonan, above n 300, 182, in which a merger which had been cleared by a
number of regulators was subsequently blocked by a US private party action.
This also facilitates business planning and faster resolution of challenged acquisitions
reduces uncertainty for third parties who deal with the merging parties as well as the parties
themselves: Baer, above n 32, 840.
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Incentive for cooperation

Mandatory PMN regimes provide parties with greater incentive to act quickly in
providing a regulator with requested information. This is because parties are
discouraged from using delaying tactics which prevent the starting of the waiting
period clock, which in most cases will not run until parties have complied with
the regulators information requirements. Consequently, advocates of a
mandatory system claim that, as a direct result of mandatory PMN, the agencies
get cooperation from the parties rarely seen in a post-acquisition investigation.340
Conversely, regulators, although subject to presumptive timelines in most
jurisdictions, may have less incentive to investigate quickly than they would have
had when mergers were not subject to mandatory notification and waiting
periods.341
Financial cost to parties and regulators
The biggest drawbacks of a mandatory system lies in the extensive cost and the
delays inherent in it application. A mandatory PMN places the onus on the party
holding the relevant information to divulge it rather than requiring regulators to
seek it out. This has considerable advantages for the regulators and, at least for
those mergers raising concerns, represents a more suitable allocation of
responsibility. However, the level of information required in some jurisdictions and
additional costs in the form of notification fees and delay often significantly
increase the cost of merging and so must not be imposed lightly.
For those mergers that do raise competition concerns transaction costs are
increased considerably through compliance with onerous information requests342
340
341
342

For example, in the United States there has been public criticism of the breadth of HSR
second requests (in particular, 15 USC 18a(e)(l)): see,eg, Pfunder, above n 25.
Chapter4|Page205
and delay occasioned by that compliance.343 While some of those costs might be
justified for those mergers raising anti-competitive concerns (and might be less
than the cost of inevitable litigation and possible subsequent divestiture), the vast
majority of mergers notified do not raise competitive concerns, yet still incur
reviewing costs of parties and regulators.
This has been mitigated in many jurisdictions by an increase in the availability of
early termination procedures344 and the use of stage 1 screening applications345
which impose less demands for information and thus less compliance costs
than for those mergers likely to raise concerns. However, base information
requirements are often still considerable so that, although the review period might
be shortened in such cases, the time and expense associated with preparing the
notification might still be substantial. At least some of the cost may be
unavoidable, given the increasing complexity of merger analysis, stemming in
part from greater recognition of economic principles and analysis.346 In
particular, accurate market definition, while crucial to any assessment of likely
competitive impact, requires a great deal of data collection and interpretation to
ensure this accuracy. 347
Consequently, notification costs are necessarily significant, particularly in those
jurisdictions requiring payment of notification fees, regardless of the prospect the
merger has for contravening the substantive laws.
343
344
345
346
347
See, eg, Hilmer Report, above n 314, 83 and Baer, above n 32, 841.
In some jurisdictions early termination requests, which allow parties to consummate a
merger despite the stipulated period of delay not having passed, is available. For example,
in the US in the 2008 fiscal year, of 1,726 transactions notified, 1,385 included requests for
early termination and 1,021 of those requests were granted: Federal Trade Commission and
Department of Justice, Hart-Scott-Rodino Annual Report, above n 69, Appendix A.
For example, Canada has recently moved to a US-style two stage merger review process:
Szentesi, above n 6. This replaces the previous short form/long form option for notification.
Global Economy (2006) 74-75.
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Costs are also incurred by parties who are not subject to the notification
requirements in investigating whether or not they have crossed the necessary
thresholds,348 a task parties take very seriously given that most mandatory
regimes impose substantial fines for failure to comply with the notification
provisions even if failure to notify is unintentional.349
Cost of Delay
In most cases PMN will delay consummation of a merger. This will not always be
the case; in most jurisdictions PMN is permitted once good faith intent to merge is
expressed so that, especially where mergers can be cleared at the early stages,
the notification may not actually further delay the conclusion of the merger.
However, in the majority of cases there will be some level of delay that directly
results from the PMN process and this will almost certainly be the case where
investigations proceed to a second stage.350
Delay will prevent the realisation of merger efficiencies and in some cases might
also allow speculators and rival bidders to cash in on the entrepreneurial insight
of the notifying firm, while it awaits clearance from the regulator.351
348
349
350
351
For example, in the US the FTC report that they have responded to thousands of telephone
calls seeking information concerning the reportability of transactions : Federal Trade
Commission and Department of Justice, Hart-Scott-Rodino Annual Report, above n 69, 2.
Shekhar and Williams, above n 203, 385.
See, eg, Shekhar and Williams, above n 203, 387.
Chongwoo and Shekhar, above n 17, 1.
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4.4.5 Voluntary pre-merger notification

Voluntary PMN regimes share the same broad objectives as mandatory
notification and can achieve similar results.352
Identification
The key disadvantage of a voluntary system is that it is self-selecting and, as a
consequence, merging parties who fear that their merger might infringe the
substantive law might have an incentive to refrain from notifying in the hope that
they can merge undetected the so called midnight merger. Paradoxically, the
self-selecting nature of voluntary notification is also one of its key strengths,
making it more likely to target those mergers raising competition concerns,
regardless of transaction size, and (potentially) eliminating the cost and
inconvenience of mandatory review for those mergers raising no such concerns.
Empirical evidence suggests that, provided the incentives for notifying potentially
anti-competitive mergers are sufficiently high,353 a voluntary notification regime
can result in most problematic mergers being notified, or otherwise detected,
without imposing onerous obligations on those mergers that do not raise anticompetitive concerns.354
In Australia, for example, the strength of incentives for notification are considered
so great that some have gone so far as to classify the system as one of quasi-
352
353
354
In the OECD there are only three examples of voluntary systems to study for comparison
and most empirical research into the efficiency of notification regimes pre-supposes that the
regime will be mandatory (now four with the addition of Chile). As a result, there is a
paucity of theoretical studies that analyze the optimal merger notification policy [normally]
pre-merger notification is assumed compulsory: Chongwoo and Shekhar, above n 17, 5.
For example, where the regulator has developed a strong reputation for imposing heavy
costs on parties that fail to notify such mergers: Shekhar and Williams, above n 203, 383384.
In this respect, empirical evidence suggests that mergers notified pursuant to a voluntarily
regime are more likely to be objected to by regulators, supporting the view that the voluntary
notification system allows the parties to self-sort the potentially problematic proposals.:
Shekhar and Williams, above n 203, 385 and 387.
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compulsory notification,355 in which, despite the absence of mandatory

notification, the ACCC learns of all problematical mergers either through
voluntary notification or through other sources.356
There are broadly three circumstances in which parties may rationally choose not
to notify under a voluntary regime. The first is where their merger has very low
probability of infringing substantive law. This does not threaten the maintenance
of competitive market structure and enables parties to avoid notification costs and
delay without any serious risk of legal sanction for breach.357 Consequently, it
should be of no concern to policy makers; indeed, it is in relation to these
mergers that the voluntary regimes have the most advantage over mandatory
regimes, eliminating unnecessary review costs for parties and regulators.
The second is where they believe the regulator will object, but that a court would
not find them guilty of breach. 358 In such a case, although the merger may raise
competition concerns, it is likely that notification will only delay inevitable
litigation. However, if there is no mechanism in place to prevent consummation
prior to court evaluation of the mergers legality, it may result in anti-competitive
structural harm, the possibility of which is a concern for competition policy. The
benefit of a mandatory regime to regulators in such cases is that it provides them
with an opportunity to gather the evidence often necessary to obtain interim
injunctions to prevent anticipated anti-competitive harm until the issue has been
resolved in the courts. However, the decision of parties not to notify in favour of
litigation is not, by its nature, inappropriate. Provided injunctive relief can prevent
structural damage until litigation is complete, it ensures that parties can make
use, at an early stage, of their right to a full review by the courts without the
additional cost and delay associated with mandatory notification and, although
355
356
357
358

Shekhar and Williams, above n 203, 384-385, noting that the ACCC is a well-resourced and
vigorous litigant.
See, eg, Shekhar and Williams, above n 203, 385 and Chongwoo and Shekhar, above n 17,
2-3.
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obtaining such evidence may prove more difficult in a voluntary system, that is
not justification in itself for imposing the costs and delays associated with a
mandatory system.
The third circumstances in which parties may choose not to notify their merger is
where they believe their merger will be challenged successfully by the regulator,
but hope that the merger will go undetected for a sufficient period of time359 that
the profit and other benefits derived from asset (including intellectual property)
integration and structural change will outweigh any subsequent cost arising from
divestiture or other remedial or even punitive orders against them.
As noted above, it is this risk that provides the greatest justification for PMN.
Where midnight mergers are involved, in which structural change occurs quickly
and surreptitiously in order to deliberately evade detection and the possibility of
early effective remedial action, there will be serious concerns about the probable
anti-competitive consequences and, in the absence of any review mechanism
available to the regulators prior to consummation, their ability to identify and
obtain the necessary evidence to successfully apply for interim relief will be
severely curtailed.
It is, therefore, not surprising that the key criticism levelled at voluntary regimes is
that, because of their self-selecting nature, they do not adequately capture those
firms who consummate a midnight merger in the hope that they will either not be
detected or that, by the time they are detected, the merger will be too difficult to
break apart effectively and any penalty will be outweighed by gains brought about
prior to the imposition of merger remedies.
If it could be demonstrated that, as a consequence of a voluntary PMN system, a
significant numbers of midnight mergers occasioning anti-competitive structural
damage were likely to take place, this might suggest it was ineffective in
359
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achieving primary goals of detection and prevention of anti-competitive mergers.

However, while some incentive may remain for midnight mergers, there is no
evidence that they currently pose any statistically significant problem in Australia
or other OECD regimes currently operating a voluntary notification system,360 with
midnight mergers now occurring only very rarely.361
Provided the risk of midnight mergers remains low, an occasional midnight
merger consummated in an attempt to avoid pre-merger evaluation by the
regulators might even be advantageous, by giving the regulator the opportunity to
develop or reinforce a reputation as being tough on parties who fail to notify.362
The effectiveness of voluntary notification regimes (as with mandatory regimes)
in identifying anti-competitive mergers will depend on market conditions,
regulatory culture and the effectiveness of post-merger litigation. Voluntary
notification regimes are likely to prove most effective in identifying anticompetitive mergers in their incipiency where
The domestic market is small and characterised by concentrated market

structures which make it more difficult for mergers to complete
undetected.
The regulatory culture is such that parties are aware that anti-competitive
mergers that are not notified will be vigorously pursued through litigation.
The substantive laws, their application by the courts and the available.
remedies are such that parties know that where anti-competitive mergers
360
361
362
See, eg, Chongwoo and Shekhar, above n 17, 3, Allan Fels and J Walker, Merger Policy
and Practice (1994) 4th Quarter Australian Economic Review 96-100 and Business Council
of Australia, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Towards Prosperity, Public Submission 71, Trade Practices Act Review 2002,
77. The most recent midnight merger case was ACCC v Pioneer International Ltd (1996)
(unreported) which led to a negotiated penalty of $4.8m confirmed by the Federal Court:
Shekhar and Williams, above n 203, 385. The best known midnight merger case in
Australia was Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) ATPR
40-876 which was subsequently found to contravene the act and led to orders of divestiture.
Chapter4|Page211
proceed to litigation they are likely to find themselves subject to significant

penalties.
The effectiveness of voluntary systems in larger and less concentrated markets is
less clear and likely to remain so because of the lack of opportunity for
development of empirical data, as a result of the fact that larger economies have
typically adopted mandatory PMN systems. There is some evidence that
midnight mergers did pose a problem in US before the introduction of mandatory
notification regime.363 This may be reflective, in part, of the size of the US
economy, which results in a much larger volume of merger activity than that
occurring in the regimes currently operating a voluntary notification scheme. It
might also reflect on the timing of the studies. The US has operated a mandatory
regime since 1976 and, as a consequence, any empirical data dealing with the
consequences of the absence of mandatory PMN regime is outdated and is not
necessarily reflective of the conditions prevailing today. Developments in
information technology and detection of mergers through other means, such as
filings with other regulators, may mean that, should mandatory notification be
removed, firms might have greater incentives to notify rather than risk detection.
However, even if identification of mergers has been enhanced through
technological developments of the past three decades, the consequences of
failing to learn about a merger in a timely manner might still be considerable; that
is, the problem of obtaining sufficient information to obtain injunctive relief so as
to prevent a scrambling of the eggs which cannot be effectively wound back by
any subsequent successful court action, still remains. Unless there is some
means by which a regulator suspicious of a potentially anti-competitive merger
can gather the necessary information to make an informed argument for
preliminary injunctive relief, then the risk of midnight mergers resulting in anticompetitive consequences may remain high.
363
See especially Baer, above n 32, 828-829. Baer claims that almost 70 percent of
problematic mergers were not detected in time to seek preliminary relief.
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The fact that parties rarely seek to merge undetected in existing voluntary
regimes provides some evidence that it may be possible to identify and block
most anti-competitive mergers in the absence of mandatory PMN, even in large
and diverse markets. Consequently, while it appears intuitive that mandatory
PMN will be better able to achieve the key objective of identifying most anticompetitive mergers prior to consummation than a voluntary system, the extent to
which this is the case in practice is open to considerable debate and may depend
on idiosyncratic market characteristics and regulatory culture not easily tested in
those jurisdictions where mandatory notification regimes have operated for some
time.
Negotiated remedies
Negotiated remedies, which may avoid costly litigation and result in an outcome
with higher social welfare364 is not a benefit unique to mandatory notification. It is
clear that voluntary notification systems, where supported by formal powers of
the regulators to extract binding undertakings from notifying parties, can achieve
similar results. Indeed, the possibility of negotiated remedies might encourage
notification in a voluntary system because parties might prefer to the opportunity
for a negotiated settlement to costly legal battles. 365
As with mandatory notification, there is a fear that regulators may seek to extract
concessions not essential to addressing competitive concerns. In Australia, for
example, concern has been expressed that undertakings are accepted that are
not strictly needed to avoid a substantial lessening of competition but rather go to
enhancing competition, or deal with a market other than that in which the
competitive concern exists.366 For both mandatory and voluntary PMN there is
364
365
366
Chongwoo and Shekhar, above n 17, 2-3.

Ibid 3. See also Business Council of Australia, above n 361, 77. Between 1996 and 2001,
73 per cent of the objections raised by the ACCC were resolved through negotiated
remedies: Shekhar and Williams, above n 203, 388. See also Chongwoo and Shekhar,
above n 17, 3 and 10.
See Business Council of Australia, above n 361, 78.
Chapter4|Page213
legitimate concern that merger law has been removed from the courts and the
power effectively, if not legally, transferred to the regulators.367 It is, however,
likely that this problem is less acute in a voluntary system in which the regulator
has no authority to delay a merger through the use or abuse of waiting
periods and where parties are free to proceed immediately to litigation if they
wish to challenge the ACCC view368 (or anticipated view) about the legality of
their merger. It can also be mitigated in part by a requirement for regulators to
produce reasons for its decisions to accept negotiated remedies,369 enhancing
the transparency of the process and thereby minimising risk of inappropriate use
of regulatory discretion.
Certainty
As with mandatory notification, voluntary notification may provide increased
certainty for the parties. While some mandatory regimes provide a guarantee
against legal action once a merger is cleared, this is not true of all such
regimes.370 The same is true of voluntary regimes. In both mandatory and
voluntary regimes, failure of the regulators to take action to block the merger
immediately following a review of notification, can provide parties with nearcertainty that the merger will not subsequently be challenged. In addition, it is
possible to tailor a voluntary notification system in such a way as to provide this
certainty if parties believe that a non-binding regulatory opinion is insufficient.
For example, in both Australia and New Zealand parties may opt for a formal
review which provides certainty against subsequent litigation and, in Australia,
367
368
369
370
For example, there has been concern expressed that the ACCC may seek to prevent any
lessening of competition through the extraction of court-enforceable undertakings before
clearing a merger: see, eg, Business Council of Australia, above n 361, 78. See also
Shekhar and Williams, above n 203, 385 referring to Philip L Williams and G Woodbridge,
Antitrust merger policy: Lessons from the Australian Experience (2004) in T Ito and AO
Krueger (eds) Governance, Regulation, and Privatization in the Asia-Pacific Region.
See, eg, Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525.
Concerns about overreach with undertakings has become less vocal since the ACCC began
producing more detailed reasons for its decisions in merger cases which involve the
provision of such undertakings.
For example, the United States.
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there is an opportunity for parties, following an adverse opinion of the regulator,

to seek a declaration from the Court that their merger does not infringe
substantive laws.371 The latter option has only been pursued on one occasion in
Australia and the formal notification option has not yet been utilized, suggesting
that there is either no significant lack of certainty inherent in the system, or that it
is sufficiently low that parties would prefer to proceed with an element of
uncertainty than to incur the costs and delay inevitably associated with acquiring
full and binding legal certainty.
The other element of certainty about which voluntary regimes are sometimes
criticised is that relating to the time for review. Mandatory systems, it may be
argued, operate under strict timelines so that parties can have some certainty
about the time for which their merger will be delayed. However, even if accepted
that mandatory systems do offer some certainty in this respect and there is
significant evidence to suggest that this is not always the case, because of the
technical compliance requirements in some countries which stop the clock and
enable regulators to re-start review periods or enable them to request additional
time periods it does not necessarily follow that voluntary regimes, by their
nature, will offer less certainty. The existing voluntary regimes all operate under
either binding or non-binding presumptive time frames372 and those deadlines are
generally met. Where formal voluntary systems operate then the deadlines are
legislatively backed.
There would not appear to be any reason for favoring a mandatory system over a
voluntary one (or vice-versa) on grounds of certainty.
371
372
See, eg, Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525.
See appendix 1.
Chapter4|Page215
Costs
Voluntary systems are arguably less costly both to parties and regulators.373
Where voluntary regimes are accompanied by a recommendation to notify
where mergers exceed certain thresholds, and this recommendation is strictly
adheared to by business, then the costs imposed by a voluntary PMN system
may approach that of mandatory PMN. However, a voluntary PMN system does
allow parties to opt not to incur notification costs where it is clear that their merger
even if large in financial size will clearly not raise competition concerns.374 It
will also remove the risk of fines for failure to adhere to mandatory PMN
requirements and may reduce some of the costs of delay and uncertainty which
might attach to strict up-front information requirements and the threat of having a
form declared invalid due to error or omission.
From the perspective of regulators, although there might be some additional
costs in monitoring the market, it is not clear that this cost is significantly higher
than those operating mandatory regimes who continue to monitor markets for
those mergers falling below its presumptive thresholds,375 especially where the
incentives for notification of such mergers are high.
It would appear that voluntary notification by the parties can, at least where
market conditions facilitate identification of most anti-competitive mergers through
self-selection, provide substantially the same results as a mandatory notification
regime at significantly less cost.
373
374
375
There is some research which suggests that voluntary PMN may advance the same benefits
as those attributable to mandatory PMN, but at less cost to regulators and parties, although
current literature provides little guidance in how merger-related costs and welfare
benefits may be measured: Chongwoo and Shekhar, above n 17, 25.
See Chongwoo and Shekhar, above n 17, 5 and 18.
Federal Trade Commission, Performance and Accountability Report: Fiscal Year 2004
(2004) 44.
Chapter4|Page216
Transparency
A criticism frequently levelled at voluntary regimes is their reduced transparency
vis--vis mandatory regimes.376 Whenever a notification falls outside the normal
administrative or court structure, particularly if it lacks legislative support, as is the
case with Australias informal merger notification process, these concerns are
likely to arise. This problem is not, however, unique to voluntary regimes. It is
also a problem with mandatory regimes in those jurisdictions, such as the US, in
which reasons are not required to be provided by the regulators.377 Some
voluntary regimes are, in fact, clearly more transparent than some of their
mandatory counterparts. For example, in New Zealand, while voluntary, the
system of notification is established by legislation and reasons are required to be
provided.378 Similarly, Australias formal system, backed by legislation, includes
binding transparency requirements.379 Even under Australias informal system,
the regulators have, following some criticism of its transparency and calls for
substantial380 or detailed381 reasons to be provided,382 developed Guidelines
376
377
378
379
380
381
382
See, eg, submissions made to the Dawson Report, above n 202.

In this respect Daniel observes that in the US press releases and occasional statements by
the regulators where mergers were challenged, remedied or cleared is the only source of
information on the agencies merger enforcement practices and priorities. He also
observes that, even where second requests are issued, only a subset generate public
information and, in particular, information is not readily available for merger investigations
that were viewed byt eh investigating agencies as relatively close calls but ultimately
closed: Daniel, above n 318, 3.
Commerce Act 1986 (NZ) s 66 and s 68(3). Reasons are provided publicly via an online
register.
See, for example Trade Practices Act 1974 (Australia) s 95AM.
Business Council of Australia, above n 361, 12; Australian Bankers Association,
Public Submission 118, Trade Practices Act Review 2002, 2; Minerals Council of Australia,
Public Submission 178, Trade Practices Act Review 2002, 5.
ANZ, above n 209, 6; Telstra, Submission to the Review of the Competition Provisions of the
Trade Practices Act 1974, Public Submission 117, Trade Practices Act Review 2002, 90, 91;
ANZ, above n 209, 13.
Some suggested a more detailed list of what should be contained in any published reasons:
see P Armitage, Submission to the Review of the Competition Provisions of the Trade
Practices Act 1974, Public Submission 128, Trade Practices Act Review 2002, 2 and
Chapter4|Page217
pursuant to which self-imposed transparency requirements are set out and

adhered to,383 both throughout the process of investigation and through the
provision of reasons for the regulators decision.384 The provision of detailed
reasons for decisions where a merger is opposed or subject to remedies has
aided in the development of precedent to ensure greater certainty and
consistency.385
It is, therefore, difficult to substantiate a claim that transparency is a concern
unique to voluntary regimes or that voluntary notification systems are less likely
to be transparent than their mandatory counterparts. In either case, the
legislation or regulatory practice supporting the notification will dictate the level of
transparency of the PMN process.
4.4.6 Hybrid PMN
Mandatory and voluntary notification, or the absence of any notification option,
are frequently presented as independent alternatives. In practice, however, most
systems comprise a hybrid of two or more of these alternatives. This is true of all
mandatory regimes which stipulate a threshold below which mergers are not
required to be notified. Those mergers remain subject to the substantive law and
parties may wish to voluntarily notify the merger to seek advice about its legality.
In some jurisdictions this is possible (giving rise to a mandatory/voluntary hybrid);
in others, most notably the US, it is not possible to voluntarily notify mergers and
obtain an opinion about their legality if they do not reach the legislative
383
384
385
Clayton Utz, Submission to the Review of the Competition Provisions of the Trade Practices
Act 1974, Public Submission 168, Trade Practices Act Review 2002, 1-2.
This occurs in all cases where the ACCC opposes the merger or approves it only subject to
the provision of merger remedies and in some cases where a merger is cleared.
This was one of the reasons advanced in submissions to the Dawson Inquiry for the
inclusion of such a requirement: National Farmers Federation, Submission to the Review of
the Competition Provisions of the Trade Practices Act 1974, Public Submission 53, Trade
Practices Act Review 2002, 21; ANZ, above n 209, 6; AAPT Limited, above n 220, 14. See
also Poddar, above n 165, 278.
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thresholds386 (giving rise to a mandatory/no notification option hybrid).

Divestiture orders for mergers falling within this category are not uncommon387
and have led to calls for a notification option to be available to them.388
Some voluntary regimes may also require mandatory notification of certain types
of merger,389 or mergers in particular industries and therefore might also be
described as hybrid regimes.
For mandatory PMN regimes, there are clear advantages of a hybrid approach
that incorporates a voluntary notification option. This may increase review costs
for agencies, at least where notification fees are not imposed, but would increase
certainty for those mergers falling below the thresholds and might enable
thresholds for mandatory PMN to be increased, in exchange for increased
incentives to voluntarily notify smaller but potentially anti-competitive mergers.
Such an approach should capture a broader range of anti-competitive mergers,
as illustrated in Figure 4.6 below.
386
387
388
389
See, eg, Bell, above n 33.

See, eg, Federal Trade Commission (US), JC Penney to Divest 161 Drug Stores in the
Carolinas to Settle FTC Antitrust Chargs Over Acquisitions of Eckerd and Certain Rite Aid
Stores (Press Release, 9 December 1996) and Department of Justice (US), Justice
Department Reaches Settlement with Microsemi Corp: Divestiture Will Restore Competition
in Markets for Semiconductor Devices Used in Critical Military and Space Applications
(Press Release, 20 August 2009).
Bell, above n 33.
This is currently being mooted as an option in Australia: see Treasury, Creeping
Acquisitions The Way Forward (Discussion Paper, Assistant Treasurer and Minister of
Competition Policy and Consumer Affairs, 11 June 2009).
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FIGURE 4.6 A HYBRID APPROACH TO PRE-MERGER

NOTIFICATION 390
A hybrid approach incorporating mandatory and voluntary elements is likely to

capture mergers falling both within the blue and green ranges, capturing more
anti-competitive mergers than either regime in isolation. While for existing
voluntary regimes the addition of a mandatory requirement may increase cost
considerably, for mandatory regimes the additional costs associated with a
second tier voluntary option would appear less significant and are likely to
produce more optimal results. In particular, the absence of any notification option
for parties falling below the threshold is difficult to justify, both in terms of
identifying potentially problematic mergers and in providing certainty for parties.
390
Note that the proportions represented in the diagram are illustrative only. The proportion of
mergers captured by either regime will vary depending on the threshold levels set for
notification (whether mandatory or voluntary) and the notification incentives for parties. It
also overrepresents the proportion of problematic mergers compared with the total number
of mergers completed.
Chapter4|Page220
Failure to provide such an option also raises significant fairness and equity
issues, by allowing big mergers the opportunity to obtain a view about their
legality and a forum for negotiated remedies, while denying this opportunity to
smaller mergers which might nevertheless infringe substantive laws.
4.4.7 Is there an optimal national approach suitable for all OECD
countries?
If all OECD countries were similarly geographically located, were equal in size
and concentration and had identical administrative and court structures,
combined with commensurate regulatory enthusiasm for enforcement, it may be
possible to identify a single optimal approach.
The position is less clear when consideration is made of existing differences,
particularly in relation to market size, concentration and geographic position.
This different scale and concentration of domestic markets, even amongst OECD
countries, means that it is possible even probable that the cost-benefit
balance for each might be different. In very large economies with thousands of
large mergers every year,391 it may be easier for companies to evade timely
detection. This will, however, be mitigated to a degree by the fact that larger and
more diverse economies are likely to be more capable of absorbing the welfare
costs of anti-competitive mergers and/or self-correcting within a reasonable time
frame than is the case in smaller and more concentrated economies. This might
suggest that in larger economies higher notification thresholds, designed to
capture only the most large-scale mergers likely to result in economic harm that
cannot be corrected in the short to medium term, might be optimal.
391
For example, iIn the US 2007-2008 fiscal year 1,726 mergers were notified (page 1) with a
dollar value of more than $1.3 trillion: Federal Trade Commission and Department of
Justice, Hart-Scott-Rodino Annual Report, above n 69, 5. Compare, for example, Poland an
Portual in which177 and 68 mergers were concluded in 2008 respectively: John Davies (ed),
Merger Control 2010: The International Regulation of Mergers and Joint Ventures in 64
Jurisdictions Worldwide, Getting the Deal Through (2009).
Chapter4|Page221
Conversely, in smaller or more concentrated economies, it is likely to be more

difficult for parties to consummate and give effect to an anti-competitive merger
undetected. As a result, the absence of a mandatory PMN regime is likely to
occasion less cost to society because anti-competitive mergers are likely to be
detected notwithstanding that absence. In this respect it is, perhaps, not
surprising that it is predominantly smaller economies that have chosen to adopt
voluntary regimes.392 However, the consequences for failing to detect even a few
mergers might be more serious in those economies because of the reduced
ability for those markets to absorb anti-competitive mergers or self-correct
following anti-competitive structural change. Substantively, this might result in a
preference for risking type I over type II errors. Procedurally the consequences
are less obvious; provided, however, the risk of detection is sufficiently high, a
mandatory regime may not be necessary to achieve the primary goal of detection
and prevention.
The variables are clearly numerous and depend on the market structure of the
jurisdiction involved. The established reputation of regulators and courts also
influences the behaviour of parties under a mandatory or voluntary regime.
At a practical level, however, even if an optimal system could be identified, the
political will to affect change to the existing regimes may be lacking in most
countries. Most mandatory regimes assume that mandatory notification is
necessary to achieve relevant objectives, a position often advanced vigorously by
regulators so that, at least where such regimes are well entrenched, as in the US,
Canada and the EU, it is unlikely that they will be prepared, in the short to
medium term, to fundamentally alter the existing procedural approach. The same
392
Although the UK economy is quite big, the EU regime captures many of the mergers that
might otherwise have been notified to UK authorities, thereby effectively limiting the size of
their economy for purposes of pre-merger notification.
Chapter4|Page222
is true of those countries operating voluntary regimes, who are currently satisfied
with the outcomes of such an approach.393
Given market and regulatory diversity, there would not appear to be a single
superior or optimal - regime applicable to all OECD jurisdictions or that, even if
such approach could be identified, the political will would exist to advance its
implementation. It may, however, be possible to identify certain core principles
applicable in each jurisdiction, in particular the importance of early clearance
processes where mandatory regimes are adopted and these principles will be
discussed further in Part V.
4.4.8 Is a different approach needed for transnational mergers?
The optimal procedural approach might differ depending on whether a merger
affects only local, regional or international markets. Where mergers are likely to
impact on multiple markets, multiple notification filings are generally required with
associated cost implications. Although jurisdictional nexus requirements are
increasingly being introduced or refined in an attempt to ensure that only those
mergers with the potential to significantly affect domestic competition are
captured,394 they still normally take the form of monetary thresholds, with the
result that many mergers unlikely to have an adverse effect on competition must
nevertheless be notified in multiple jurisdictions. The cost and delay implication of
multiple notifications may necessitate a different procedural approach to achieve
the optimal outcome than for purely domestic assessments.
It is clear that transnational mergers raise additional procedural complexities,
both for parties and regulators. Although procedurally, for transnational mergers
393
394
For example, no significant push for a switch to mandatory pre-merger notification was
made during the most recent review of Australias merger laws, including by the regulator
itself: see generally Dawson Report, above n 202, chapter 2 and Julie Clarke, The Dawson
Report and Merger Regulation (2003) 8 Deakin Law Review 245.
For example, many jurisdictions have altered their threshold reuirements to incorporate
domestic turnover requirements in line with ICN recommendations in recent years. See
generally Davies, Merger Control 2010, above n 392.
Chapter4|Page223
the average review cost to individual regulators should decrease as a result of

the sharing of information,395 the cost to merging parties will increase, although
normally not proportionately, as the number of reviewing jurisdictions increase.396
In addition to direct costs, indirect costs, including time spent working on the
merger and, in particular, delay and the uncertainty, will significantly increase
where a merger has transnational implications.397
The diverse effects of some mergers in multiple national markets will also have
an impact on the ability to effectively negotiate remedies, at least without
cooperation between regulating states, especially where, for example, the optimal
remedy to address competitive concerns in country A would involve commitments
made in country B.
Despite the challenges for parties and regulators associated with multiple filings,
it is likely that, domestically, the optimal merger regime will remain the same
regardless of the territorial scope of the mergers effect. It is also impractical, and
likely to lead to greater uncertainty398 for nations to apply different systems to
mergers having transnational effects and, at a purely national level, there is no
apparent justification for treating mergers, which also have an impact in other
countries, differently from those having only national impact. The substantive
analysis will be the same and, although transnational mergers might necessitate
395
396
397
398
interested regulators. Although there are costs associated with sharing information between
regulators, these are outweighed by the costs savings achieved through information sharing.
This will be explored in detail in chapter 8.
See chapter 2
D Daniel Sokol, 'Monopolists Without Borders: The Institutional Challenge of International
Antitrust in a Gilded Age' (Research Paper No 1034, University of Wisconsin Legal Studies,
2007) 60-61.
If different procedural requirements were stipulated for purely national as distinct from
transnational mergers, then unless the line was very clearly drawn, it may give rise to
uncertainty about which procedure is to be adopted; this is the case in the EU, to a degree,
but it does not involve each nation applying different tests, but rather imposes a supranational authority on mergers reaching certain targets. This still generates uncertainty, but
does not involve different national treatment.
Chapter4|Page224
additional considerations, such as those relating to international comity, the

approach taken to substantive merger analysis should remain consistent
regardless of the scope of the anticipated competitive effect.
4.4.9 Conclusion
The objective of procedural regulation is to facilitate the identification and
prevention of mergers which might contravene substantive law399 and to do so at
the least cost to parties and regulators and at a cost to society not exceeding the
cost of allowing the anti-competitive merger to proceed.400
Notification, whether voluntary or mandatory,401 can achieve a number of benefits
for regulators, merging parties and the pubic and as a result there is a clear and
appropriate interest in both authorities and merging parties having at least the
option of reviewing a merger or having a merger reviewed prior to
consummation. Effective PMN saves the time and cost associated with detecting
potentially anti-competitive mergers and avoids the significant problems
associated with trying to rectify structural market changes through post-merger
divestiture orders.402 It also provides parties with increased certainty and
flexibility and, where appropriate, facilitates the negotiation of appropriate merger
remedies.403
These benefits must be balanced against the significant costs, for parties and
regulators, of PMN.404
399
400
401
402
403
404
See, eg, Hilmer Report, above n 314, 83.

See chapter 2, para 2.5.3.
Many of the benefits and detriments of mandatory notification hold true for voluntary, with
some claiming voluntary merger notification does work and may achieve objectives
similar to those achieved by compulsory systems at much lower costs to the parties as well
as to the regulator : Chongwoo and Shekhar, above n 17, 5.
See generally, Elzinga, above n 323, 43-79.
This might also constitute a detriment in that it can give the authorities a great deal of
leveraging power.
See generally Sokol, above n 398, 60.
Chapter4|Page225
For mergers that do raise potential competition concerns, it is appropriate that the
parties be required to alert regulators of their potentially unlawful transaction and
to supply them with information they need to effectively evaluate mergers.
However, this must be counterbalanced by the need to protect the majority of
pro-competitive mergers from the wasted economic expenditure and delay
occasioned by compliance with the procedural laws.
The absence of any option for the parties to notify authorities and obtain premerger advice deprives parties of the benefits of certainty associated with
notification regimes and eliminates the negotiation option that might otherwise
be open to notifying parties.405 For these reasons it should be rejected.
This leaves the option of voluntary, mandatory or hybrid approaches to premerger regulation.
Neither mandatory nor voluntary is inherently superior in
achieving certainty, fairness, transparency or in facilitating negotiated remedies.

The key points of distinction are identification, cost and delay. Comparing the
efficacy of mandatory and voluntary regimes in achieving this objective is not a
simple task; in the OECD there are only three examples of voluntary systems to
study for comparison and most empirical research into the efficiency of
notification regimes pre-supposes that the regime will be mandatory.406
In terms of identification, it is clear that, at least in appropriate market conditions,
with the support of a strong regulator, a voluntary regime can identify most
mergers raising anti-competitive concerns without the cost associated with
compulsory notification.407 It is also likely that they will catch some additional
mergers than a mandatory system which is dependent on a monetary
threshold.408
405
406
407
408

See, eg, Chongwoo and Shekhar, above n 17, 5.
Ibid 2-3.
Chapter4|Page226
A mandatory regime can, where thresholds are set at appropriate levels, also
result in the identification of most anti-competitive mergers. The absence of any
empirical evidence from larger economies makes it difficult to make an accurate
assessment of the likely consequences for identification of removing mandatory
pre-merger notification requirements.409
When evaluating the effectiveness of the mandatory or voluntary PMN regimes, a
key question is whether the premerger requirements are reasonably necessary
in light of the agencies' merger enforcement responsibilities and the consumer
benefit that is produced.410 In this respect, it is notable that only a very small
minority of notifiable mergers proceed to a second stage assessment in the US
with only 41 of 1,726 reported transactions evaluated in this way in the fiscal year
2008.411 Even less are challenged412 and, of those that are, the majority are
resolved by consent decree.413 This does not factor in the deterrent value of
mandatory notification which, if removed, might result in some additional mergers
concluded in the hope of evading timely detection. It also says little about the
level of anti-competitive detriment prevented through the prevention or
application of effective merger remedies in those cases that were challenged. It
409
410
411
412
413
Although the evidence that does exist from the US of the period before notification was
mandatory suggests that there may be a risk of significant levels of anti-competitive merger
activity going undetected and causing harm which subsequent court action is unlikely to be
able to effectively correct, that data is not current and not necessarily indicative of what a
system without such mandatory obligations would achieve (or fail to achieve) today.
Notwithstanding the absence of such data, some claim that there is a general consensus
that the mandatory PMN systems in the US and Europe work reasonably well: Chongwoo
and Shekhar, above n 17. See also Baer, above n 32, 834, claiming that there is no doubt
that consumers are better off with premerger notification.
Federal Trade Commission and Department of Justice, Hart-Scott-Rodino Annual Report,
above n 69, 2. See also Federal Trade Commission, Performance and Accountability
Report: Fiscal Year 2004 (2004).
In fiscal year 2008 the Antitrust Division of DOJ challenged 16 mergers leading to 15
consent decrees and one transaction that was restructured after the Division informed the
parties of its antitrust concerns relating to the transaction and the Federal Trade
Commission challenged 21 transactions, leading to 13 consent orders, two administrative
complaints, of which one was also litigated in federal court, and six abandoned or
restructured transactions.
Ibid.
Chapter4|Page227
does, however, suggest that a vast number of competitively harmless mergers

are subjected to notification requirements at significant cost.
In addition to capturing many of the mergers that do raise competition concerns
and many that do not, mandatory notification systems that operate on a monetary
threshold basis will miss some mergers that do raise concerns because they fall
below the relevant thresholds. This does not mean that they will go undetected,
either prior to or following consummation, but their detection will not be facilitated
by the notification process. In the US, in particular, there is clear evidence that a
number of mergers raising competition concerns fall outside the scope of this
threshold, with more than one third of all mergers challenged in the courts in the
US in the 2008 fiscal year falling below notification thresholds.414 Parties to those
mergers, while risking substantive infringement and significant penalties and
divestiture orders, have no option to seek advice from the regulators about the
substantive legality of their merger415 and are therefore also denied the
opportunity to negotiate remedies prior to consummation.
Finally, the absence of any ability to notify leaves it in the hands of regulators to
identify, investigate and prevent mergers at an early stage and is likely to result in
substantially less anti-competitive mergers being identified.
It is likely that a hybrid approach consisting of both mandatory notification and a
voluntary option, will capture the most anti-competitive mergers.416
There does not, however, appear to be a single approach that can be considered
optimal in all jurisdictions. The different nature of the markets involved large,
small, concentrated, diverse and, in the case of the EU, multinational may
necessitate different optimal approaches. Unfortunately, however, most
jurisdictions have, when adopting mandatory regimes, done so without reference
414
415
416
See Daniel, above n 318, 1. Eleven mergers were litigated and four involved mergers falling
below the notification threshold.
See generally Bell, above n 33.
See figure 4.6, above.
Chapter4|Page228
to the size or nature of their economy or regulatory culture. Particular market

conditions and regulatory powers, support and reputation will all affect the
suitability of an approach to PMN. Consequently, a mandatory PMN process
may still be optimal incurring less regulatory detection resources and
preventing or deterring greater volumes of anticompetitive mergers for larger
markets, although lack of any current empirical evidence makes it difficult to be
too confident about drawing that conclusion. Mandatory PMN regimes should,
however, only be implemented in large markets where the risk of anti-competitive
mergers going undetected is high and, where a mandatory option is adopted, it
must impose only minimal cost and inconvenience on the great proportion of
notifiable mergers raising no anti-competitive concerns. In particular, there should
be a mechanism in place for the quick evaluation and approval of these mergers.
Mandatory PMN regimes should also provide a voluntary mechanism for those
parties whose proposed mergers fall below the relevant thresholds but who wish
to obtain regulatory opinion about the legality of their mergers. This option may
not only capture a wider range of anti-competitive mergers, but allows small but
significant mergers to obtain the same benefits of certainty and access to
negotiated outcomes enjoyed by their larger counterparts.
Conversely, it is clear that, at least under some market conditions, a voluntary
system can be effective in achieving the core objectives of merger regulation417
and the cost savings, particularly to those parties whose mergers pose no
competitive concerns, inherent in a voluntary system418 make it a preferred option
in appropriate market conditions.419
417
418
419
For example, in Australia in 2001, 154 merger proposals were considered by the ACCC.
The majority of mergers considered were notified by the parties rather than initiated by the
ACCC (and the proportion of self-reported transactions is growing): Shekhar and Williams,
above n 203, 387 ( in particular, Figure 1) and 384. See also Chongwoo and Shekhar,
above n 17, 24.
See ibid 4.
Chapter4|Page229
Consequently, in smaller and/or more concentrated, economies in which

significant mergers are unlikely to go undetected and in which the regulatory
reaction to consummation of anti-competitive mergers is such that it provides
adequate deterrence for most merging parties, the costs of mandatory
notification, particularly for those parties whose mergers are unlikely to raise
competition concerns, cannot be justified. Where those conditions prevail, as in
Australia and New Zealand, a voluntary system could be considered optimal, at
least where recommended thresholds are set at an appropriate level.
Whatever the relevant optimal notification regime for the domestic market
involved, it is appears clear that, at a national level, the same regime should
operate for both national and transnational mergers. The complications and
expense of multiple filing and additional delay are not relevant to issues of
identification and assessment nationally, but require transnational cooperation in
order to rationalise the process.
Chapter4|Page230
Chapter 5
The Extraterritorial application of domestic laws
5.1 Introduction
As a result of the globalization of markets, merging parties, assets and influence
now frequently extend beyond the territorial reach of a single state.1 Importantly,
in relation to economic law, the market effects of conduct might be felt in one or
more countries beyond that in which the parties are located or the relevant
physical conduct took place. In the context of merger law, the effect of any
merger-generated increases in market power are more likely than ever to
reverberate beyond the country in which the merger was concluded or in which
the corporate parties are headquartered. It is for this reason that, in the absence
of any supranational regulatory body or multinational treaty governing
transnational mergers, many countries now seek to assert their laws over
mergers affecting their markets, regardless of the location of the parties or the
physical conduct.
The term extraterritoriality, although lacking precise definition, generally refers to
the application by one country of their laws to activity occurring outside their
territorial borders.2 The extent to which countries are willing or able to apply their
competition laws in this ways varies considerably; some countries, like the US,
See further Brendan Sweeney, Combating Foreign Anti-Competitive Conduct: What Role
for Extraterritorialism? (2007) 8 Melbourne Journal of International Law 35, 36.
Although there is no universally accepted definition, it is commonly expressed as those
occasions where domestic law is sought to be applied and enforced against conduct that
occurs outside the territorial boundaries of the state: Sweeney, Combating Foreign AntiCompetitive Conduct, above n 1, 41. See also Andrew Guzman, 'Is International Antitrust
Possible?' (1998) 73 New York University Law Review 1501, 1506. Utton defines
extraterritoriality as the claim made by certain countries (in particular the USA) that their
antitrust laws can be applied in their jurisdiction even though the alleged infringement has
taken place in another jurisdiction: Michael A Utton, International Competition Policy:
Maintaining Open Markets in the Global Economy (2006) 93.
Chapter5|Page231
apply their laws to conduct occurring in foreign states liberally, while others either
choose not to apply their laws in that way or lack the ability to do so effectively.3
It is in the context of mergers that the consequence of extraterritorial application
of competition laws is most acute. This is because, where asserted, the
extraterritorial application of merger laws normally involves imposing ex ante
notification requirements on foreign corporations, often backed by threats of
financial penalty for non-compliance and the possibility of substantive remedies,
including divestiture, should it be determined that the merger will offend local law.
The increasing number of jurisdictions imposing ex ante merger review
requirements, combined with the global nature of many mergers, means that
mergers are increasingly attracting multiple regulatory responses, many of which
rely on some form of extraterritorial jurisdictional claim.
The extent to which such obligations and rulings are recognised in public
international law and are respected by other countries will be an important
consideration when exploring options for greater harmonisation or cooperation.
Importantly, overlapping and competing unilateral claims over the same conduct
will inevitably generate conflict between regulators and uncertainty and increased
compliance costs for the firms involved. Although conflicts between regulators
have been rare in practice, where they have occurred, they have caused
considerable political tension and the increasing number of regimes adopting ex
ante merger review, combined with the increasingly global nature of most
markets, suggests that the risk of such conflicts occurring in the future is likely to
increase. In this respect, it has been argued that extraterritorial application of
merger laws infringes on the sovereignty of other nations. The scope for conflict
is more acute in relation to mergers than it is in relation to many other forms of
anti-competitive conduct because of the scope for mergers to simultaneously
enhance efficiencies while reducing competition. Thus, for example, a merger in
country B, which might reduce welfare in country A, might simultaneously
See, eg, Guzman, Is International Antitrust Possible, above n 2, 1508.
Chapter5|Page232
increase welfare in country B. In this case, if country A applies their laws

extraterritorially to block the merger, country B will be deprived of mergergenerated welfare gains.4 This conflict of interest has resulted in some countries
implementing retaliatory measures against certain extraterritorial encroachments
on activity occurring within their state.
This chapter will examine the recognised and asserted grounds for the
extraterritorial operation of competition laws generally and the relevance of this to
the application of national substantive and procedural requirements relating to
mergers. It will begin by assessing the notion of sovereignty and the traditional
concept of territorial jurisdiction. This will be followed by a discussion of the
application of extraterritorial jurisdiction, including the still controversial effects
doctrine, and the measures taken by some states to counter what they consider
to be unlawful intervention in their national affairs. Next, an assessment of the
potential for conflict in the application of laws extraterritorially will be undertaken,
including case studies of the conflict generated by some transnational mergers.
Finally, an evaluation of the appropriate scope of extraterritorial claims for merger
law and procedure will be made. Issues of comity and cooperation, which might
influence the way in which laws are applied extraterritorially in practice, will be
assessed in detail in chapters 6 and 7.
5.2 National Sovereignty

Extraterritorial jurisdictional claims are frequently criticised as impeding on the
sovereignty of the nation state in which the conduct occurred.5 While the idea
of national sovereignty is generally well understood in daily discourse, legally it
4
5
See ibid 1516-1518.

As will be discussed below, the concept of sovereignty has been highlighted by politicians in
a number of high profile cases in which concern was expressed at the extraterritorial
application of foreign merger laws.
Chapter5|Page233
has been described as an elastic concept,6 the scope of which remains the
subject of debate among public international lawyers.7
For purposes of this analysis, it is sufficient to observe that national sovereignty
is a privilege accorded only to nation states8 (and not, for example, international
organisations or supranational bodies), pursuant to which each nation retains the
ability to impose duties and confer rights9 within its territory. This ability is not
absolute, but is subject to principles of public international law10 and may also be
partially relinquished, permanently or temporarily, and conditionally or
unconditionally, by a nation without ceasing to be classified as a sovereign
nation.11 This is most clearly demonstrated by the countries that make up the
EU; while deferring to supranational laws in some cases, and thereby
relinquishing some of their sovereign power, each country retains its individual
national sovereignty.12
Jurisdiction has long been considered an aspect of sovereignty13and submissive
to it,14 in that it was thought that jurisdiction could not validly extend beyond the
territorial reaches of a sovereign state without encroaching upon the sovereignty
of another.15 It is clear that the bounds of sovereignty were, historically, couched
in physical, territorial terms. Consequently, where one country attempts to extend
6
7
8
9
10
11
12
13
14
15
Maher M Dabbah, The Internationalisation of Antitrust Policy (2003) 143.

As a result, it has been opined that the shifting definition of sovereignty is an unstable
foundation upon which to build a body of choice-of-law scholarship: Andrew T Guzman,
Choice of Law: New Foundations (2001-2002) 90 Georgetown Law Journal 883, 885.
Dabbah, above n 6, 144.
Ibid 145.
These principles impose some restrictions on a nations sovereignty: see, eg, ibid 145.
Dabbah, above n 6, 145.
Ibid.
Federick A Mann, The Doctrine of Jurisdiction in International Law, 111 Recueil Des Cours
1, 30 (1964-I) as cited in Hannah L Buxbaum, Territory, Territoriality, and the Resolution of
Jurisdictional Conflict (2009) 57 The American Journal of Comparative Law 631, 632,
observing that the connection between jurisdiction and sovereignty is, up to a point,
obvious, inevitable, and almost platitudinous, for to the extent of its sovereignty a State
necessarily has jurisdiction.
See, eg, Mann, above n 13, 632.
Ibid.
Chapter5|Page234
its laws or duties to activity occurring within another country, it may be

expected that the second country might experience some concern that their
sovereign rights are being infringed.
It is also clear, however, that jurisdictional claims have, for some time now,
extended beyond traditional notions of territorial sovereignty. This raises
questions about the extent to which asserting jurisdiction over conduct that
occurs outside a nations sovereign territory, but which has an impact within that
sovereign territory (whether physical, economic or otherwise) is a valid exercise
of national sovereignty and, if it is, the extent to which it is permissible to
encroach on, or overlap with, the sovereign jurisdiction of another state. These
questions are of particular importance in relation to economic-based law,
including merger laws, because of the possibility and in many cases the
likelihood that transactions will have transnational consequences.
5.3 Territoriality
The principle of territoriality describes the situation in which a countrys laws
apply only to national activity.16 It is clear from the foregoing discussion that this
principle derives directly from traditional notions of national sovereignty; in this
respect, the right to impose laws on activity occurring within national borders has
been described as the essence of national sovereignty and has long served as
the basis for rules on legislative, or prescriptive, jurisdiction.17 Consequently, no
jurisdictional concerns arise when states (or regions) seek to police mergers that
occur wholly or partly within their own territory.18
16
17
18
Guzman, Is International Antitrust Possible, above n 2, 1506.

Buxbaum, above n 13, 632.
See generally Elizabeth Jardine, 'Extraterritorial Enforcement of Australian Antitrust
Legislation: Australian Meat Holdings Pty. Limited & Ors v. Trade Practices Commission'
(1990) 12 Sydney Law Review 652, 659. See also SS Lotus (France v. Turkey) P.C.I.J.
Ser.A., No. 10 (1927) (SS Lotus).
Chapter5|Page235
Traditionally, competition laws were applied within the confines of the territoriality
principle. This was exemplified by the US Supreme Court decision in American
Banana Co v United Fruit Co19 in which Justice Oliver Wendell Holmes observed
that 'the general and almost universal rule is that the character of an act as lawful
or unlawful must be determined wholly by the law of the country where the act is
done',20 and expressly rejected any claim that the law could be extended to
conduct occurring in another country.21 The reach of domestic competition law
was, therefore, considered coextensive with the geographic territory of the
country.22
The strict territorial approach was also adopted in the UK until as recently as
1999,23 which, at least in principle, required that there be some territorial
connection between either the acting persons or their acts and the British
territory24 before they could be the subject of British legal interference.
Although recognised exceptions to this narrow principle exist and new claims to
the extraterritorial reach of competition laws have emerged, the starting point for
the application of merger laws, as with other laws, will be whether or not the
physical conduct the merger or merger agreement took place within the
territory of the sovereign state asserting jurisdiction. If it did, there will be no
question of that state having internationally recognised power to apply its laws
and regulations.
19
20
21
22
23
24
213 US 347 (1909) (American Banana). See generally Guzman, Is International Antitrust
Possible, above n 2, 1506.
American Banana, 356. See also John Gibeaut, 'Sherman Goes Abroad: Landmark
Decision OKs International Antitrust Prosecution' (July 1997) ABA Journal 42, 43.
American Banana, 356. See also Guzman, Is International Antitrust Possible, above n 2,
1506.
Guzman, Is International Antitrust Possible, above n 2, 1506. See also William S Dodge,
An Economic Defense of Concurrent Antitrust Jurisdiction (2003) 38 Texas International
Law Journal 27, 27.
Jrgen Basedow, Competition Policy in a Globalized Economy: from Extraterritorial
Application to Harmonization in Manfred Neumann and Jrgen Weigand (eds), The
International Handbook of Competition (2004) 323.
Basedow, above n 23, 323.
Chapter5|Page236
Related to the territoriality principle is the 'domicile' principle, pursuant to which a

country may exert jurisdiction over persons ordinarily domiciled in their country,
even if not citizens. This is sometimes referred to as pseudo-territoriality25 and
is still relied upon by some OECD states in formulating jurisdictional criteria for
the enforcement of their merger laws. Thus, for example, in Canada pre-merger
notification requirements are not triggered unless the transaction involves an
operating business in Canada.26 Similarly, in Australia, the merger prohibitions
are extended to conduct occurring outside Australia, engaged in by bodies
corporate carrying on business within Australia27 or by persons ordinarily resident
within Australia.28 In many jurisdictions, this principle is also used to capture
conduct by a company incorporated in a foreign state where a subsidiary is
established within the state asserting jurisdiction.29 However, while sometimes
invoked to justify a jurisdictional claim, the majority of OECD states now require
25
26
27
28
29
Ibid.
Neil Campbell and Mark Opashinov, Canada, in John Davies (ed), Merger Control 2009:
The International Regulation of Mergers and Joint Ventures in 64 Jurisdictions Worldwide,
Getting the Deal Through (2008) 81.
Trade Practices Act 1974 (Cth) s 5. The degree of conduct necessary to satisfy this
requirement where no subsidiary is involved remains unsettled. See, eg, David Meltz, 'The
Extraterritorial Operation of the Trade Practices Act - A Time For Reappraisal?' (1996) 4
Trade Practices Law Journal 185, 188, Thiel v Federal Commissioner of Taxation (1990)
171 CLR 338 and Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164 per
Gibbs J at 178. It is unclear whether a foreign companys whole ownership in an Australian
subsidiary will amount to carrying on business by the parent company, although current
authority suggests that it does not. In Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34
FCR 31 an American company's ownership of an Australian subsidiary, which evidence
established acted as the American company's agent for limited purposes, was held
insufficient to establish the 'carrying on business' requirement, although it may simply be a
question of degree. See also Amalgamated Wireless (Australasia) Ltd v McDonnell Douglas
Corp (1987) 77 ALR 537 which determined that the question of whether a foreign company
that establishes a subsidiary in Australia will be caught by the extraterritorial application of
the Act will depend upon the degree of involvement that the parent company has with the
subsidiary. Note, however, that the Court in TPC v Gillette Co (No 1) (1993) 45 FCR 366,
decided more recently, took a stricter line, being unwilling to pierce the corporate veil.
The phrase, 'persons ordinarily resident in Australia' has received little by way of judicial
scrutiny. Meltz argues that the provision should be limited to those persons who maintain a
'physical presence other than as a traveller or on a casual basis': Meltz, above n 27, 188.
Basedow, above n 23, 323. See also Imperial Chemical Industries Ltd v Commission, Case
48/49 [1972] ECR 619, 662.
Chapter5|Page237
(in law if not in practice) no physical presence within the territory in order to
trigger local jurisdictional claims.30
5.3 Extraterritoriality
Exclusive reliance on the territoriality principle wedded in traditional concepts of
national sovereignty was appropriate at the time of American Banana, when most
mergers had only domestic implications. It is not surprising, however, that as
markets have expanded beyond domestic shores, the inadequacies of exclusive
reliance on territorial jurisdiction has become evident and the importance of
seeking extraterritorial solutions to mergers having transnational effects has been
sought and implemented to various degrees. In todays interconnected economy,
it has been observed
national policy cannot be fully implemented without transnational repercussions.
In such a world, tidy circles demarcating national jurisdiction, even based on an
expanded concept of territoriality, become either impossible or meaningless.31
Extraterritoriality, in this context, refers to the ability of a country to govern

activity in foreign countries32 and the last few decades have witnessed a
significant increase in the number of countries that have been prepared to apply
their economic laws including competition laws to conduct engaged in outside
their territorial boundaries.33
Although in most jurisdictions there is a presumption that statutes do not have
extraterritorial jurisdiction unless such an intention is clearly manifest in the
30
31
32
33
Only Canada and Ireland expressly require this and it may be an implicit requirement in
Australia, Mexico and the UK, although a technical reading of those laws would not seem to
require such a nexus.
Anne-Marie Slaughter and David T Zaring, 'Extraterritoriality in a Globalized World' (Working
Paper, 1997) 1.
See, eg, Guzman, Is International Antitrust Possible, above n 2, 1524 fn 58.
Chapter5|Page238
relevant legislation,34 in relation to merger laws and, in particular, notification

requirements, this intention is usually clearly expressed or is otherwise easily
inferred from the nature of notification threshold requirements.35
Extraterritorial jurisdiction in the context of competition laws may be broadly
divided into two categories; those traditionally recognised as justifiable
exceptions to the territorial principle in international law and the effects doctrine,
which now forms the basis for the application of most mandatory PMN regimes.
5.3.1 Traditional application of domestic laws extraterritorially
The traditionally recognised basis for extraterritorial application of laws most
relevant to competition law include the principles of objective territoriality,
nationality and protective jurisdiction. Application of these principles in the
context of merger and competition laws typically do not raise any significant
sovereignty concerns.
Objective Territorial Jurisdiction
The principle of objective territoriality,36 which refers to the right of a country to
assert jurisdiction over conduct initiated abroad and completed within the
jurisdiction, has been widely recognised in the context of criminal law.37 The
discretion to apply law in this way is not, however, unfettered and will probably
34
35
36
37
See Slaughter and Zaring, above n 31, 5. In US Supreme Court, Chief Justice Rehnquist
stated that it was a long-standing principle of American law that legislation of Congress,
unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the
United States: EEOC v Arabian American Oil Co 499 US 244, 248 (1991), quoting Foley
Bros Inc v Filardo 336 US 281, 285 (1949). In Australia, for example, the TPA, through s
50A and section 5 manifest a clear intention that, in appropriate circumstances, the merger
provisions should operate extraterritorially: R v Jameson [1896] 2 QB 425; Meyer Heine Pty
Limited v The China Navigation Company Ltd (1965-1966) 115 CLR 10.
The Court in United States v Aluminum Co of America, 148 F 2d 416 (2nd Cir, 1945), and
subsequent decisions, have found, with relative ease, that the reference to commerce with
'foreign nations' in the Sherman Act evidences a governmental intention that the Sherman
Act have extraterritorial application. The Clayton Act contains a similar phrase.
S S Lotus (France v. Turkey), PCIJ Reports, Series A. No. 10 (7 September 1927).
Peter Muchlinski, Multinational Enterprises and the Law (1999) 125.
Chapter5|Page239
depend on the level of connection between the acts and the territory involved.38
In the case of competition laws, it may be invoked by states where, for example,
anti-competitive agreements take place in one country but are given effect to in
another. Some have labelled this an effects principle in disguise, 39 but in
practice it is narrower than a pure effects test which requires no physical conduct
to take place in the home state.40 In the context of mergers, it may be used to
justify regulation of mergers in other countries which would result in the
acquisition of a controlling interest in a local company.41
Nationality jurisdiction
The 'nationality' principle recognises that a country has the right to claim
jurisdiction over actions of its nationals, even where they occur entirely outside
their territory. It is important in the context of mergers because adherence to the
doctrine may hinder the ability of national actors to move offshore to escape
obligations incumbent upon them as citizens.42 Although relatively
uncontroversial in relation to individuals,43 the position is more complex when
involving corporate entities. While mergers occurring outside the country in
38
39
40
41
42
43
Ibid.
Basedow, above n 23, 323. See also Wood Pulp [1985] 3 CMLR 474.
See, eg, Buxbaum, above n 13, 639. Griffin observes that [c]ountless law journals have
dealt with the differences between the principle of objective territorial jurisdiction described
in the Lotus decision and the effects doctrine announced in the Alcoa decision. [footnotes
omitted]: Joseph P Griffin, Foreign Governmental Reactions to US Assertions of
Extraterritorial Jurisdiction (1998) 6 George Mason Law Review 505, 511 and see fn 30.
For example, in Australia section 50A extends the merger provisions of s 50 of the TPA to
acquisitions occurring wholly outside Australia which result in the acquisition by a person of
a controlling interest in an Australian body corporate. For a discussion of these provisions
see: Robertson Wright, 'Aspects of the Extraterritorial Application of Sections 50 and 50A of
the Trade Practices Act' (1992) 20 Australian Business Law Review 152; B McLaughlin, 'The
Present Application of Section 50 and Section 50A of the Trade Practices Act 1974 to
Overseas Mergers: Defective in Design?' (1995) 3 Trade Practices Law Journal 18. This is
limited by the requirement of a substantial lessening of competition in a market, defined for
the purposes of this provision as 'a substantial market for goods or services in Australia, in a
State or in a Territory': TPA s 50A(9). There is a sparcity of authority in Australia on this
aspect of the TPA has, which may suggest it has been 'under-appreciated and underutilised': Meltz, above n 27, 186.
Slaughter and Zaring, above n 31, 7.
See, eg, Griffin, above n 40, 515.
Chapter5|Page240
which one or more of the corporate entities is incorporated will be subject to the
law of the country in which it was incorporated,44 it is not clear whether a country
can, consistent with public international law, assert jurisdiction over a company
incorporated in another country where some of the directors are nationals or
where it has subsidiaries operating in the home country.45 In this respect the EU
has based some claims to extraterritoriality on what has become known as the
economic entity doctrine.46 The economic entity doctrine, also known as the
doctrine of the "group economic unit"47 or the "single economic entity theory",48
provides that, for the purposes of the application of competition laws, the EU can
go beyond the facade of separate legal identities of parent and subsidiary
companies and view them as a single economic entity where the subsidiary is
under the effective control of its parent company. Thus, when a subsidiary, under
the effective control of another company or companies, performs an act in the EU
it will be deemed to be performing actions which are equally those of its
controllers regardless of where the controllers are located or incorporated.49
This doctrine was endorsed by the then Court of First Instance in Imperial
44
45
46
47
48
49
See, eg, Trade Practices Act 1974 (Cth) s 5, which extends the Australian merger
prohibitions to conduct occurring outside Australia, engaged in 'by bodies corporate
incorporated within Australia or by Australian citizens '.
Griffin, above n 40, 515. In relation to subsidiaries, it is suggested that, at least in practice, if
not recognised in international law, a state will have jurisdiction over companies
incorporated outside their territory where they are subsidiaries of companies incorporated
within their territory. Conversely, it is likely that, pursuant to this principle, a home state
could require the parent company to order its overseas subsidiaries to act in compliance
with home country laws, by reason of the nationality of the parent company as the principal
shareholder in the foreign subsidiary: Muchlinski, above n 37, 124.
See D G Goyder, EC Competition Law (2nd ed, 1993) 461-462.
See EC Competition Law (2nd ed, 1993) 462.
See J D Banks, 'The Development of the Concept of Extraterritoriality under European
Merger Law and its Effectiveness under the Merger Regulation following the
Boeing/McDonnell Douglas Decision 1997' [1998] European Competition Law Review 306.
Ibid. For the purpose of determining whether a subsidiary is under the control of another,
'the size of the shareholding, the representation on the board of directors of the subsidiary,
the ability to influence the latter's affairs and actual evidence of attempts to do so will be
relevant': see Richard Whish, Competition Law (2nd ed, 1989) 388. See also Boaz Barack,
The Application of the Competition Rules (Antitrust Law) of the European Economic
Community to Enterprises and Arrangements External To The Common Market (1981) 307.
Chapter5|Page241
Chemical Industries Ltd v EC Commission (Dyestuffs).50 Subsequent cases have

relied upon the doctrine and it is now an established part of EU law.51 However,
the Court has been criticised in its approach by emphasising the ability of a
parent company to control a subsidiary regardless of whether that control was
actually exercised for the actions in question52 and has also been criticised for
failing to acknowledge the distinction between parent and subsidiary
companies.53 US assertions of jurisdiction over subsidiaries operating abroad
where controlled by a US parent have been similarly challenged.54
Protective jurisdiction
It is generally recognised that a state has the right to exercise extraterritorial
jurisdiction over acts done abroad which adversely affect the vital interests of the
regulating state. 55 This doctrine is, however, normally invoked in the context of
national security56 and it is unlikely that the mere protection of economic
advantage on the part of the regulating state, at the expense of the target state57
would be accepted as valid in international legal jurisprudence.
50
51
52
53
54
55
56
57
Case 48/49 [1972] ECR 619. In this case three companies were held to have participated in
illegal price fixing through subsidiary companies located in the European Union and under
their control. The Court went beyond the faade of separate legal identities, holding that 'in
reality each parent and subsidiary formed one economic entity': Whish, above n 49, 387.
See Europemballage Corporation and Continental Can Co Inc v Commission, Case 6/72
[1973] CMLR 199 and Metro-SB-Grobmarkte GmbH & Co KG (United Kingdom Intervening)
v EC Commission (SABA GmbH and Germany Intervening) (no 2) Case 74/84 [1987] CMLR
118, discussed in Whish, above n 49, 388.
See generally Banks, above n 48.
Griffin, above n 40, 515.
Muchlinski, above n 37, 124.
Michele Giannino, International Cooperation and the Regulation of Transnational Mergers (D
Phil Thesis, Queen Mary College of University of London, 2006) 21.
Muchlinski, above n 37, 125.
Chapter5|Page242
5.3.2 The effects doctrine

Most contentious has been the assertion of jurisdictional claims based solely on
effects felt within the asserting jurisdiction.58 The question is whether country C,
in which neither companies A nor B reside or hold assets, but whose own
economic interests may be affected by a merger between A and B, has a right to
intervene in a merger proposal between them. In relation to competition law and
merger law in particular, the predominant view is that they can, provided the
predicted effect in the asserting jurisdiction is sufficiently pronounced.
Although the first legislation in this respect was the German Law Against
Restrictions of Competition 1957,59 it has been its application by the US and,
more recently, the EU, that has provided the principal source of controversy.60
For this reason the history of the development of the effects doctrine in these
jurisdictions will be examined.
Development of the doctrine in the US
The effects doctrine was first, (in)famously, expressly adopted by the US Court
of Appeals in the Second Circuit decision of United States v Aluminum Co of
America (Alcoa)61 which applied US antitrust laws to activities of non-nationals
abroad where this produced anti-competitive effects within the USA. 62
58
59
60
61
62
See, eg, Chris Noonan, The Emerging Principles of International Competition Law (2008) 34, who observes that the effects doctrine generated the first wave of controversy
surrounding the internationalisation of competition law, but that this focus has evolved into
one more generally concerned with managing overlapping jurisdiction.
See Basedow, above n 23, 324.
148 F 2d 416 (2d Cir 1945) (Alcoa). See also Buxbaum, above n 13, 632 for a discussion
of the US development of the effects doctrine.
In this case an action was brought against foreign companies who had allegedly engaged in
conduct which contravened the provision of the Sherman Act: see Muchlinski, above n 37,
129. See further discussion of the development of extraterritorial jurisdiction in the US in
Dodge, above n 22 and Richard W Beckler and Matthew H Kirtland, Extraterritorial
Application of US Antitrust Law: What Is a Direct, Substantial, and Reasonably Foreseeable
Chapter5|Page243
Despite the actions in that case occurring outside US borders, the Court
considered that it had jurisdiction because the conduct was intended to and did,
in fact, have economic effects in the US.63
This 'effects doctrine'64 was, at least initially, said to be based upon the 'objective
territorial principle',65 established in SS Lotus.66 However, as noted above, this
internationally recognised principle requires a fundamental portion of the conduct
to have taken place in the country claiming jurisdiction. Alcoa imposed no such
limitation and, in applying this effects doctrine to conduct taking place in a foreign
nation, by foreign nationals, the Court created a considerably more expansive
principle67 which, it has been argued, signalled a move from absolute
territorialism to radical extraterritorialism68 and triggered a period of aggressive
ET enforcement in the US:69
At its high point, the doctrine permitted application of US antitrust laws to an
alleged conspiracy in restraint of trade between a Japanese parent company and
its US subsidiary operating in Indonesia with regard to an agreement to ship logs
to Japan.70
63
64
65
66
67
68
69
70
Effect Under the Foreign Trade Antitrust Improvements Act? (2003) 38 Texas International
Law Journal 11.
United States v Aluminum Co of America, 148 F 2d 416 (2nd Cir, 1945) 444.
It is also referred to as the 'intended effects test' to highlight the fact that effects must not
only be felt in the US, but must have been intended to effect the US, though courts have
'paid little, if any, attention to interest': Spencer Weber Waller, International Trade and US
Antitrust Law (1997) 4-5.
Aidan Robertson and Marie Demetriou, '"But that was in Another Country ...": The
Extraterritorial Application of US Antitrust Laws in the US Supreme Court' (1994) 43
International and Comparative Law Quarterly 417, 418.
SS Lotus (France v Turkey) PCIJ Ser A, No. 10 (1927)
Compare Daniel J Gifford and E Thomas Sullivan, 'Can International Antitrust be Saved for
the Post-Boeing Merger World? A Proposal to Minimize International Conflict and to Rescue
Antitrust from Misuse' (2000) 45 Antitrust Bulletin 55.
Slaughter and Zaring, above n 31, 3-4. The case referred to was Industrial Investment
th
Development Corp v Mitsui & Co 671 F 2d 876 (5 Cir, 1982).
Chapter5|Page244
The application of this effects doctrine was met internationally with widespread
criticism71 and claims that it was inconsistent 'with the principle of sovereignty of
nations',72 some arguing that it was indicative of a US commitment more to
power than to law.73
Possibly as a result of the critical reaction to the Alcoa effects doctrine from other
states, the Ninth Circuit in Timberlane Lumber Co v Bank of America74 observed
that at some point the interests of the United States are too weak and the
foreign harmony incentive for restraint too strong to justify an extraterritorial
assertion of jurisdiction.75 In place of the rigid effects test in Alcoa, the Court
established in its place a two-pronged 'jurisdictional rule of reason', or a
'balancing test',76 pursuant to which jurisdiction was initially established in the
same manner as in Alcoa but, as a matter of comity77 and fairness,78 a further
balancing exercise was then conducted to determine whether jurisdiction should
be exercised in the particular case,79 including consideration of the relative
significance of effects on the US as compared with those elsewhere.80
71
72
73
74
75
76
77
78
79
See generally Edward T Swaine, 'The Local Law of Global Antitrust' (2001) 43 William and
Mary Law Review <http://ssrn.com/abstract=277232> at 22 January 2010.
Robertson and Demetriou, above n 65, 418.
549 F2d 597 (9th Cir 1976) (Timberlane).
Timberlane at 609. See also Waller, fn. 9 at 4-5. [student paper]
See generally chapter 6.
Buxbaum, above n 13, 646
Note that uncertainty surrounds whether the balancing exercise formed part of the
jurisdictional analysis or a separate discretionary consideration to be applied only after the
jurisdictional requirements have been satisfied under the effects doctrine. It is suggested
the latter view is accurate: see Commonwealth of Australia, Australia-United States'
Relations: the Extraterritorial Application of United States Laws (Joint Committee on Foreign
Affairs and Defence, Canberra, 1983) 19; Warren Pengilley, Extraterritorial Effects of United
States Commercial and Antitrust Legislation: a View From "Down Under" (Occasional Paper
No 7, Transnational Corporations Research Project, University of Sydney 1984) 16; John
Byron Sandage, 'Forum Non Conveniens and the Extraterritorial Application of United States
Antitrust Law' (1985) 94 Yale Law Journal 1693,1700; Roger P Alford, 'The Extraterritorial
Application of Antitrust Laws: A Postscript on Hartford Fire Insurance Co. v. California'
(1993) 34 Virginia Journal of International Law 213, 216. For the opposing view see: John A
Trenor, 'Jurisdiction and the Extraterritorial Application of Antitrust laws after Hartford Fire'
Chapter5|Page245
The decision in this case reflected the high point of US thinking about how
extraterritorial regulation might be limited in response to jurisdictional conflict81
and, arguably, mitigated the extent to which the effects doctrine, as articulated in
Alcoa, could encroach upon the sovereignty of other nations.82
However, despite this apparent 'watering down' of the effects doctrine through a
consideration of the interests of foreign nations, these tests still engendered
criticism on the basis that they invoked considerations arguably more suited to
politicians and diplomats than to the judiciary83 and were also criticised as
inadequate because, after conducting a balancing analysis, those courts which
applied the test 'almost invariably found the balance tipped in favour of
jurisdiction.'84 As a result, use of the world balancing was criticised as giving
an unwarranted impression of objectivity to the process,85 with a suggestion
made that it could more appropriately be termed the thinking about some
relevant factors approach.86 In addition, the tests were not universally adopted
within the US87 and, significantly, did not receive Supreme Court endorsement.
80
81
82
83
84
85
86
87
(1995) 62 University of Chicago Law Review 1583, 1595. See also Robertson and
Demetriou, above n 65, 421.
Timberlane Lumber Co v Bank of America, 549 F 2d 597 (9th Cir, 1976) 614.
This position was adopted and expanded by the Third Circuit in Mannington Mills Inc v
Congoleum Corp, 595 F 2d 1287 (3rd Cir, 1979). Robertson and Demetriou, above n 65,
419. See also Slaughter and Zaring, above n 31, 4, fn 9. See also Commonwealth of
Australia, above n 79, 19.
See, eg, Timothy L Anderson, 'Extraterritorial Application of National Antitrust Laws: The
Need for More Uniform Regulation' (1992) 38 Wayne Law Review 1579, 1580; Robert
Cannon, 'Laker Airways and the Courts: A New Method of Blocking the Extraterritorial
Application of US Antitrust Laws' (1985) 7 Journal of Comparative Business and Capital
Market Law 63, 69. See also Laker Airways Ltd v Sabena, Belgian World Airlines, 731 F 2d
909 (DC Cir, 1984).
Alford, above n 79, 216, who further claims that courts 'will simply assert the primacy of U.S.
interests under the guise of the neutral rule of reason'.
A V Lowe, The Problems of Extraterritorial Jurisdiction: Economic Sovereignty and the
Search for a Solution (1985) 34 International and Comparative Law Quarterly 724, 730.
Lowe, above n 85, 730.
In Laker Airways Ltd v Sabena, Belgian World Airlines, 731 F 2d 909 (DC Cir, 1984) 950-52
the DC Circuit expressly rejected the balancing approach. The Second Circuit also rejected
the Timberlane approach: National Bank of Canada v. Interbank Card Ass'n, 666 F 2d 6 (2d
Chapter5|Page246
Importantly, one of the most (in)famous instance of extraterritorial application of

US competition laws occurred after the Timberlane decision; the Westinghouse
Uraniam litigation.88 In response to an embargo placed upon enriching certain
foreign uranium within the US, foreign producers reached an informal agreement
a supplier cartel - with the approval of their governments in Australia, Canada,
South Africa and the UK,89 designed to stabalise the market outside the US. As a
result of the agreement, Westinghouse Electric Corporation could not supply the
uranium it had contracted to supply90 and brought action in the US alleging that
the supplier cartel contravened the Sherman Act. Despite the fact that the cartel
members had been denied access to the American market under protectionist
American legislation91 and the fact that the cartel was lawful and had government
approval in the states in which the conduct occurred, the conduct was held to be
subject to US laws, 92 the Court finding that not only did it have subject-matter
jurisdiction, but that it was appropriate to use it in this case.93 In relation to
Timberlane, the Court held that there was nothing in that case inconsistent with
its decision to confer jurisdiction pursuant to the Alcoa test. The Court went
further and criticised the interference by the governments of Australia, Canada,
South Africa and the United Kingdom, who had each filed briefs as amici curiae,
88
89
90
91
92
93
Cir 1981); Dominicus Americana Bohio v Gulf & Western Industries Inc, 473 F Supp 680,
688 (SDNY 1979). The Seventh Circuit continued to apply the Alcoa intended effects test: In
re Uranium Antitrust Litigation, 617 F 2d 1248 (7th Cir 1980). However, the Third, Fifth, and
Tenth Circuits adopted the Timberlane analysis to varying degrees: Mannington Mills Inc v
Congoleum Corp, 595 F 2d 1287 (3rd Cir, 1979); Industrial Investment Development Corp v
Mitsui & Co 671 F 2d 876 (5th Cir, 1982) and Montreal Trading Ltd v Amax Inc, 661 F 2d
864 (10th Cir 1982), where the Court, following the Timberlane test, determined that
jurisdiction would be unjustified (at 869).
In re Uranium Antitrust Litigation, 617 F.2d 1248 (7th Cir, 1980)
Lowe, above n 85, 725.
Ibid.
Ibid.
Ibid.
In re Uranium Antitrust Litigation, 617 F.2d 1248 (7th Cir, 1980).
Chapter5|Page247
and claimed to have been shocked that the governments of the defaulters have
subserviently presented for them their case against the exercise of jurisdiction.94
The effects doctrine was given statutory force in the US in 1982 with the passage
of the Foreign Trade Antitrust Improvements Act,95 providing for the
extraterritorial application of the Sherman Act to conduct having a 'direct,
substantial, and reasonably foreseeable effect' on US commerce.96 However,
this does not apply to mergers or import commerce and the meaning of direct,
substantially and reasonably foreseeable has proven uncertain.97 In addition,
despite this 'codification of the effects doctrine',98 many courts continued to apply
principles of international comity for determining whether they should exercise
jurisdiction over foreign defendants in the particular case99 and this was the
approach adopted in the Third Restatement of Foreign Relations Law100 which
incorporated comity considerations into the elements necessary for the
establishment of jurisdiction.101 It provided that conduct intended to, and in fact
having, significant effects within the US gave rise to jurisdiction where the
exercise of jurisdiction was 'reasonable'102 and then set out a balancing of
interests test to be considered when determining reasonableness for this
purpose, including, amongst other things, a consideration of '[t]he extent to which
another State may have an interest in regulating the activity [and] the likelihood of
94
95
96
97
98
99
100
101
102
In re Uranium Antitrust Litigation, 617 F.2d 1248 (7th Cir, 1980). See also Noonan, above n
58, 5, noting sovereignty concerns raised by Canada in relation to this case.
15 USC 6(a) and 45(a)(3).
15 USC 6(a). See discussion in Beckler and Kirtland, above n 62.
Beckler and Kirtland, above n 62, 14-15
Alford, above n 79, 217.
Ibid. Thus, courts still retained wide powers to determine the 'scope of their jurisdiction'
(Cannon, above n 83, 68) and the legislation ultimately did little to clarify the existing
uncertain and unsatisfactory state of the law.
Third Restatement of Foreign Relations Law (1987). However, the Third Restatement does
not have legislative force enjoyed by the FTAIA.
Third Restatement of Foreign Relations Law (1987) 402.
Third Restatement of Foreign Relations Law (1987) 402. Note, however, the
reasonableness requirement is not absolute and only directs that the court should defer
jurisdiction to a foreign state where the exercise of jurisdiction is found to be unreasonable:
403(3).
Chapter5|Page248
conflict with regulation by another State.'103 Despite adoption this balancing test
in the Restatement, courts did not apply it with vigour, either deferring to the
Timberlane-type analysis104 or simply failing to engage in a balancing test
analysis at all.105
The most authoritative enunciation of the procedure to be adopted in considering
whether US courts could and should exercise jurisdiction in international antitrust
disputes came with the Supreme Court decision in Hartford Fire Insurance Co. v.
California,106 which constituted the first Supreme Court case to apply US antitrust
laws to conduct occurring entirely outside the US 'based solely on its intended
effects' within the US.107 The case involved an alleged violation of 1 of the
Sherman Act by London reinsurance companies acting outside the US. The laws
of the United Kingdom permitted the acts in question and, as a result, the District
Court dismissed claims on the basis of international comity, finding that 'the
evidence of conflict between [US] antitrust laws and English law and policy [was]
substantial'.108 However, the Ninth Circuit reversed this decision, holding that 'the
principle of international comity was no bar to exercising jurisdiction',109 despite
103
104
105
106
107
108
109
Third Restatement of Foreign Relations Law (1987) 403.

See, eg, Star-Kist Foods, Inc v P J Rhodes & Co, 769 F 2d 1393 (9th Cir 1985).
See, eg, Rivendell Forest Products, Ltd v Canadian Forest Products, Ltd, 810 F Supp 1116
(D Colo 1993). See also Waller, above n 64, 5-11.
509 US 764 (1993).
Larry Kramer, 'Extraterrritorial Application of American Law after the Insurance Antitrust
Case: A Reply to Professors' (1995) 89 American Journal of International Law 750, 752.
See also discussion in Guzman, Is International Antitrust Possible, above n 2,1532-1533.
The case invoked scathing criticism that it has undone the work done by the Circuit Courts in
Timberlane and Mannington, in respect of international comity considerations: see, eg, Mary
Catherine Pelini, 'The Extraterritorial Jurisdiction Analysis in Light of Hartford Fire Insurance
Co. v. California: How Peripheral Has the International Comity Notion Become?' (1994) 55
Ohio State Law Journal 477, 478.
See Pelini, above n 107, 480 and Hartford Fire Insurance v California, 509 US 764 (1993).
Alford, above n 79, 217-18.
Chapter5|Page249
acknowledging that application of US laws would 'lead to significant conflict with

English law and policy'.110
The Supreme Court, in a narrow 5-4 majority,111 broadly defined the Act's
extraterritorial scope, finding that it was well established 'that the Sherman Act
applies to foreign conduct that was meant to produce and did in fact produce
some substantial effect in the United States',112 while narrowly confining the
circumstances in which international comity would result in the Court declining to
exercise jurisdiction.113 In particular, the majority considered that the only
substantial question to be answered in considering international comity was
whether there was 'a true conflict between domestic and foreign law'.114 In this
case there was held to be no true conflict, despite evidence that British
Parliament had 'established a comprehensive regulatory regime over the London
reinsurance market, and that the conduct alleged here was perfectly consistent
with British law and policy'. No conflict exists, the Court held, where a person
subject to regulation by two states can comply with the laws of both.115
Thus, for a 'true conflict' to exist it must be impossible for a person to comply with
the laws of both States and, as British law did not require the defendants to act in
a manner proscribed by US law, no conflict was said to exist.116 The Court,
110
111
112
113
114
115
116
Alford, above n 79, 217-218. This added credence to the claims that the 'rule of reason' test
is merely a guise and the courts will rarely consider that the interests of other nations will
outweigh those of their own.
Judgment delivered by Justice Souter, with the Chief Justice and Justices White, Blackmun,
and Stevens joining in the opinion.
Hartford Fire Insurance v California, 509 US 764 (1993).
Waller, above n 64, 5-16.
Given that that was the only 'substantive' question over in a potentially groundbreaking
decision, it is interesting to note that only a mere paragraph was devoted to it. In fact, a total
of five paragraphs were devoted to the entire issue of the extraterritorial application of the
Sherman Act.
Justice Souter, quoting from The Third Restatement on Foreign Investment Law (1987)
403(3), comment e. 25. Note, however, that the minority suggests that in applying the test
in this way '[t]he Court has completely misinterpreted [403(3)]': Hartford Fire Insurance v
California, 509 US 764 (1993). See also Continental Ore Co v Union Carbide & Carbon
Corp, 370 US 690 (1962) 706-707.
Alford, above n 79, 219.
Chapter5|Page250
therefore, determined there was 'no need to address other considerations that
might inform a decision to refrain from the exercise of jurisdiction on the grounds
of international comity.'117 This reasoning has been validly criticised as conflating
comity with the doctrine of foreign sovereign compulsion.118
The strong dissent119 in Hartford Fire was highly critical of the majority's
reasoning, describing their 'true conflict' approach as a breathtaking broad
proposition, which contradicts the many cases [and which] will bring the
Sherman Act and other laws into sharp and unnecessary conflict with the
legitimate interests of other countries ...'120 and would have declined to exercise
jurisdiction, reasoning that it was 'unimaginable that an assertion of legislative
jurisdiction by the US would be considered reasonable'121 in the circumstances.
It is clear that the advances made by Timberlane and subsequent cases to the
consideration of foreign interests when asserting extraterritorial jurisdiction were
short lived,122 Swaine observing that attempts to practice judicial self-restraint in
this respect fell off the wagon in Hartford.123 The potential scope of Hartford Fire
may, however, have been limited, slightly, by the Supreme Court in F Hoffman-La
Roche Ltd v Empagran124 which held that private damages claims could not be
117
118
119
120
121
122
123
124
This passage suggests that, even if there is a 'true conflict', courts will engage in a form of
balancing exercise which may well lead to the application of US jurisdiction in any event.
Buxbaum, above n 13, 650. See further Lowe, above n 85, 738.
Justice Scalia delivered the opinion of the minority on this issue. Justices O'connor,
Kennedy, and Thomas joined in his Honour's opinion.
Hartford Fire Insurance v California, 509 US 764 (1993). See also Alford, above n 79, 224;
Kramer, above n 107, 756 fn 34. This approach has since generally been applied in lower
courts. See, eg, Trugman-Nash, Inc, et al v New Zealand Dairy Board, 942 F Supp 905
(SDNY 1996) and Metro Industries, Inc v Sammi Corp, 82 F 3d 839 (9th Cir 1996) (Metro)
and United States v Nippon Paper Industries Co. Ltd 109 F 3d 1 in which the First Circuit
court adopted and expanded the Hartford test in relation to criminal contraventions. See also
Waller, above n 64, 5-18 and Gibeaut, above n 20, 42-43.
Hartford Fire Insurance v California, 509 US 764 (1993) para 2922.
See, eg, Buxbaum, above n 13, 650.
Swaine, Local Law of Global Antitrust, above n 71, 3.
542 US 155 (2004).
Chapter5|Page251
made in respect of conduct that had effect only outside the US,125 on the basis
that the Sherman Act must be read to avoid unreasonable interference with the
sovereign authority of other nations.126 However, although the Court appeared
more prepared to consider legitimate sovereign interests of other states,127 it did
not overrule Hartford Fire.128 Consequently, the effects doctrine, with only a very
limited true conflict consideration of foreign laws, remains firmly embedded in
US competition law.
Development of effects doctrine in Europe
Although the European Courts have been reluctant to find jurisdiction based
solely on economic effect, the EC has, on a number of occasions, beginning with
Wood Pulp,129 adopted an effects test when asserting jurisdiction in competition
law matters in circumstances where there is an intended and actual (or likely)
economic effect felt within the EU.130
The General Court, while not expressly endorsing the effects doctrine,131
preferring to rely on what it refers to as implementation rather than effects,132
has not ruled against it and has suggested it could be receptive to the doctrine:133
125
126
127
128
129
130
131
Mark S Popofsky, Extraterritoriality in US Jurisprudence Chapter 97, 2417 in ABA Section

of Antitrust Law, Issues in Competition Law and Policy (2008) Volume III, 2435-2436.
As quoted in Popofsky, above n 125, 2443 and 2435-2436. See also Kathryn McMahon,
'Developing Countries and International Competition Law and Policy' (Research Paper No
2009/11, Warwick School of Law, 2009) 24-30.
Ibid.
Re Wood Pulp, OJ [1985] L 85/1; [1985] 3 CMLR 474. This was the first that could be
explained only on the basis of the effects doctrine. See further Whish, above n 49, 388
See, eg, Valentine Korah, An Introductory Guide to EEC Competition Law and Practice (4th
ed, 1990) 50 and Whish, above n 49, 388 fn 12.
On appeal from the Commission's decision in Wood Pulp, despite the extensive arguments
regarding the effects doctrine advanced by the Advocate General, the Court concluded that
it was possible to reach the same conclusion without the need to apply the effects doctrine.
Instead, they applied the traditional territorial theory, holding that if a contract made by nonnationals outside the common market is implemented within it, the Commission is
competent. (Korah, above n 130, 50. See also Whish, above n 49, 389) This made
recourse to an effects doctrine unnecessary in this case.
Chapter5|Page252
In the context of the EUMR, it is clear that it has frequently been applied to
mergers outside the EU134 and the then Court of First Instance in Gencor v
Commission,135 although not explicity adopting the effects doctrine136 upheld a
decision of the EC which
prohibited a merger between two South African undertakings on the basis that it
would have created a dominant duopoly in the platinum and rhodium markets,
as a result of which effective competition would be significantly impeded in the
common market.137
The Court observed that the merger exceeded turnover thresholds set out in the
EUMR and that, although the EUMR required parties to have substantial
operations in the [EU], they could be comprised as sales and not necessarily
production.138 This conclusion, they held, was consistent with public international
law where it is foreseeable that a proposed concentration will have an immediate
and substantial effect in the [EU]. 139
More recently, when reviewing its merger regulations, the EU concluded that
turnover thresholds represent the most efficient formulation for the jurisdictional
criterion of the [EUMR]. 140
Consequently, regardless of the precise terms in which the General Court
chooses to couch their jurisdictional claims in respect of the EUMR, it is clear that
132
133
134
135
136
137
138
139
140
Griffin, above n 40, 512. Griffin also observes (at 513) that the practical differences between
effects and implementation would appear slight and it has been observed that they often
produce similar outcomes.
See Whish, above n 49, 388; Beguelin Import Co v GL Import Export SA, Case 22/71 [1971]
ECR 949, [1972] CMLR 81; Walrave and Koch v Association Union Cycliste Internationale,
Case 36/74 [1974] ECR 1405; [1975] 1 CMLR 320 and Beguelin Import Co v GL Import
Export SA, Case 22/71, [1971] ECR 949, [1972] CMLR 81, para 11. See also Griffin, above
n 40, 511.
See, eg, Richard Whish, Competition Law (6th ed, 2009) 478.
Cast T-102/96 [1999] ECR II-753, [1999] 4 CMLR 971
See Whish (2009), above n 133, 478.
Ibid 483.
Ibid.
Ibid.
Richard Burnley, An Appropriate Jurisdictional Trigger for the EC Merger Regulation and
the Question of Decentralisation (2002) 25 World Competition 263, 271.
Chapter5|Page253
in practice it is applied upon similar criteria to that adopted by the US effects

doctrine.141
Germany
Germany was the first state to expressly adopt an effects based approach to
jurisdiction in competition law matters. The Law Against Restraints on
Competition provides that it applies to all restraints of competition having an
effect within the territorial scope of this Act, even if they are caused outside the
territorial scope of this act.142 Consequently, not only does the Act expressly
provide for prescriptive jurisdiction in cases where the effects are felt within
Germany, the only basis for jurisdiction is where such effects are present; thus,
anti-competitive conduct occurring within German territory but having only
external effect, would not be prohibited. Although the Act itself is silent on the
degree to which effects must be felt in Germany before jurisdiction will be
asserted, various court decisions have imposed a requirement that the
connection be substantial; in particular, in relation to mergers, it has been held
that the effect of a planned merger on local competitive conditions must be
direct and substantial in order to justify the application of German law. 143
Although German laws are constitutionally prevented from violating customary
international law,144 it is generally accepted that jurisdiction [655] based on
effects within Germany satisfied international law. 145
Where the application of German competition law to conduct occurring abroad
would involve conflict with foreign regulatory interests,146 German case law has
141
142
143
144
145
See, eg, Griffin, above n 40, 513.

Law Against Restraints on Competition (Germany) 130(2) as quoted in Buxbaum, above n
13, 640-642. For a slightly different translation see Bundeskartellamt Translation,
<http://www.bundeskartellamt.de/wEnglisch/index_alt.php> accessed 16 September 2009:
This Act shall apply to all restraints of competition having an effect within the scope of
application of this Act, also if they were caused outside the scope of application of this Act.
See discussion in Buxbaum, above n 13, 641
Ibid 654-655.
Chapter5|Page254
adopted the non-intervention principle, holding that international law affirmatively

required some form of interest balancing: that the governmental interests of the
regulating state will suffice to justify the exercise of jurisdiction, unless the
governmental interests of the foreign state significantly outweigh them.147 This
issue arose in the case of Synthetic Rubber,148 where a German court was
required to consider the issue of a merger which had adverse domestic effects in
Germany, but which predominantly impacted non-German interest:
The case arose out of a proposed acquisition involving the French subsidiaries of
two multinational corporations. The proposed merger was lawful in France and
approved by the French government; the German Federal Cartel Office (FCO)
nevertheless barred it on the basis of adverse domestic effects. The FCO had
admitted that the mergers center of gravity lay outside Germany, however, and
the court turned to the question whether the [German law] should apply when the
principal impact of the acquisition would be felt abroad. Referring to the rule of
non-intervention, it held that international law required reasonable forum
contacts in order to support the exercise of jurisdiction. Noting that the FCOs bar
would prevent the merger from occurring, and would therefore make itself felt in
an-[658]-other country, it held that international law prohibited legislative
jurisdiction in the case despite the planned transactions effects in Germany it
took into account the comparative strength of the transactions connections with
another nation.149
Similarly, in the Cigarettes case150 the FCO barred an acquisition by a US

company of a stake in a British company. The British company had a German
subsidiary with whom the US company competed and the FCO considered that
the merger would strengthen market dominance within Germany. On appeal the
Court again considered the doctrine of non-intervention and held that the FCO
had improperly blocked the transaction:
146
147
148
149
150
Ibid 655.
Buxbaum, above n 13, 657, quoting from Karl Meessen, Vlkerrechtliche Grundstze Des
Internationalen Kartellrechts (1975), 227.
KG 26 Nov 1980, WuW/E OLG 2411.
Buxbaum, above n 13, 657-658.
FC, 24 Feb 1982, WuW/E BkartA 1943 (1983), as citied in Buxbaum, above n 13, 658, fn
134.
Chapter5|Page255
[A]lthough the transaction as a whole clearly presented reasonable links to the

German forum, applying German law to bar the entire foreign acquisition would
nevertheless violate international law if a narrower application of that law, limited
to the domestic effects, was possible.151
It is clear that although German law permits a jurisdictional claim based on

effects, the Courts will, in practice, place more emphasis on issues of foreign
interests and the strength of jurisdictional nexus beyond mere financial ties than
is the case in the US and EU.
5.4 Limits on extraterritorial application

There are two primary ways in which assertions of jurisdiction may be limited in
practice. The first is where the country involved is relatively small and/or
otherwise lacks the ability to enforce its extraterritorial jurisdictional claims on the
companies involved. This will most frequently be the case where the parties
involved in the transaction do not have offices or assets within the asserting
jurisdiction.
The second is where the home country of the parties involved has enacted
legislation designed to hinder or prevent enforcement or to otherwise employ
retaliatory measures designed to reverse the impact of an extraterritorial
application of competition laws. These normally take the form of blocking or
clawback legislation.
5.4.1 Natural limits on power
The ability of a country to effectively impose its laws extraterritorially through an
effects doctrine is dependent on its ability to enforce its laws and obligations
against the parties involved. In the absence of assets or parties within the state
of the asserting jurisdiction, a claim dependent on extraterritorial jurisdiction
151
Buxbaum, above n 13, 658 (footnotes omitted).
Chapter5|Page256
requires coercive power for its enforcement, and that remains within the exclusive
purview of state actors.152
Such difficulties are, however, mitigated where the parties involved, although
located or doing business externally, hold assets or conduct commerce within the
country asserting jurisdiction. In such cases, the country asserting jurisdiction
can exercise significant leverage over the business.153
Consequently, the degree to which extraterritorial enforcement can occur
effectively will often depend on the degree to which the offending parties have
dealings (or wish to have dealings) in the asserting state: a country will have
limited sanctions against foreign companies which own few assets or do little
trade in the country concerned, whereas a company with substantial assets will
take very seriously the threat of extraterritorial antitrust action.154
The practical limitations on enforcement of judgments extraterritorially also
means that it is often only large regulators who will, in practice, have the power to
effectively apply their merger laws extraterritorially.155
This creates an uneven playing field for extraterritorial jurisdiction; if only large
nations can, in practice, enforce their laws extraterritorially, smaller nations who
are nonetheless adversely affected by a merger in a manner contravening their
substantive laws may have the desire and recognised authority to challenge
it, but lack the clout to enforce its judgments. This, however, is not an argument
against the validity or appropriateness of extraterritorial application per se, but
merely a practical limitation. Although it might be desirable, given recognition of
152
153
154
155
See generally Buxbaum, above n 13, 672.

Guzman, above n 2, 1507.
See, eg, Brendan Sweeney, 'Global Competition: Searching for a Rational Basis for Global
Competition Rules' (2008) 30 Sydney Law Review 209 noting that extraterritorial application
of competition laws is a solution realistically open to only a relatively small number of the
most powerful nations. See also Dodge, above n 22, 38 and OECD Committee on
Competition Law and Policy, 'CLP Report on Positive Comity' (Report No
DAFFE/CLP(99)/19, May 1999) 4.
Chapter5|Page257
extraterritorial subject-matter jurisdiction, for nations to negotiate conventions to

enforce each others regulatory laws and judgments as a way of overcoming such
limitations,156 the absence of such existing agreement does not provide
convincing grounds for denying the application of law extraterritorially.
5.4.2 Blocking and clawback legislation
Many jurisdictions initially rejected US attempts to assert the effects doctrine as
a basis for extraterritorial jurisdiction in competition law matters.157 The UK, in
particular, repeatedly expressed the view that the pure effects doctrine has no
basis recognized in international law.158 Viscount Dilhorne in Rio Tinto Zinc Corp
v Westinghouse Electric Corp159 stated, in this respect:
For many years now the United States has sought to exercise jurisdiction over
foreigners in respect of acts done outside the jurisdiction of that country. This is
not in accordance with international law and has led to legislation on the part of
other states, including the United Kingdom, designed to protect their nationals
from criminal proceedings in foreign courts where the claims to jurisdiction by
those courts are excessive and constitute an invasion of sovereignty.160
Because of the importance of territorialism for the enforcement of extraterritorial

jurisdiction claims, states hostile to its application in this way have been able, at
times, to invoke retaliatory measures designed to block or reverse the effects of
156
157
158
159
160
Dodge, above n 22, 38.

Meltz, above n 27, 188. Meltz relies upon E Sykes and M Pryles, Australian Private
International Law (3rd edn, 1991) 456 to support this view. It has been observed that 'there
have been five diplomatic protests of US antitrust cases for every instance of express
diplomatic support, and three blocking statutes for every cooperation agreement': PCF Pettit
and CJD Styles. 'The International Response to the Extraterritorial Application of United
States Antitrust Laws' (1982) 37 The Business Lawyer 697 at 699. See also Lowe, above n
85, 727 and Noonan, above n 58, 4-5.
[1978] 1 All ER 434, 460 (House of Lords)
Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] 1 All ER 434, 460 (House of Lords)
Chapter5|Page258
such extraterritorial application, including blocking' and 'claw-back' legislation,

which have been adopted by more than a dozen states.161
One way in which blocking legislation achieves this is by creating a true conflict
of the kind thought necessary to invoke comity considerations in Hartford Fire.162
Blocking legislation can also hinder the establishment of an antitrust suit against
a foreign party, by restricting the extent to which domestic litigants can obtain
evidence abroad to assist local proceedings163 by making such production
unlawful in certain circumstances.164 Blocking legislation can also restrict the
ability of a party to enforce judgments in foreign territories.165 These measures
may effectively preclude a party from entering into litigation at first instance by
preventing them obtaining the necessary documentary evidence with which to
proceed, or by deterring action where a favourable judgment would be rendered
of no effect.166
Claw-back legislation, on the other hand, is designed to undo the damage done
by the otherwise effective extraterritorial application of competition laws.167 This
form of counter-measure operates by allowing a party, held liable for competition
161
162
163
164
165
166
167
Australia, Belgium, Canada, Denmark, Finland, France, Germany, Italy, The Netherlands,
New Zealand, Norway, The Philippines, Sweden, and the United Kingdom have all enacted
this kind of legislation: Pengilley, above n 79, 40. See also Lowe, above n 85, 727,
observing that at least 16 states had enacted laws designed to neutralise the extraterritorial
reach of foreign legislation: he addition to those noted by Pengilley he lists South Africa and
Switzerland. See Commonwealth of Australia, above n 79, Appendix IX, Jardine, above n
18, 662 and Pettit and Styles, above n 157, 699.
Griffin, above n 40, 519-520.
Pettit, fn. 67 at 699.
See Protection of Trading Interests Act 1980 (UK). See also Neuhaus, fn. 72 for a
discussion of this Act.
See Protection of Trading Interests Act 1980 (UK), s. 5.
See, for example, Australia Meat Holdings Pty. Limited v. Trade Practices Commission
(1989) ATPR 41-512.
This type of legislation may have the effect of preventing an action being initiated if the
prospective plaintiff considers that any successful judgment will simply be undone in due
course. See generally Joseph Neuhaus, 'Power to Reverse Foreign Judgments: The British
Clawback Statute Under International Law' (1981) 81 Columbia Law Review 1097 at 1102;
Pengilley, above n 79, 45 and Anthony J Caroll, 'The Extraterritorial Enforcement of US
Antitrust Laws and Retaliatory Legislation in the United Kingdom and Australia' (1983?) 13
Denver Journal of International Law and Policy 377, 380.
Chapter5|Page259
law damages to a foreign party for violations of foreign law, to recoup those
damages against assets of the plaintiff located within the foreign state.168 These
have primarily been adopted as a counter-measure to the US policy of imposing
treble-damages for antitrust violations. The effectiveness of claw-back laws will,
however, be limited to cases in which the foreign firm has assets in the country of
the defendant.169
The realities of commerce also limit the effectiveness of blocking and clawback
legislation. The long term interests of parties might be better served by
submitting themselves to the jurisdiction of the state in which they wish to
conduct business (whether directly or through sales alone) than by relying on
legal exemptions.170 This is particularly acute where defendant corporations are
subsidiaries of US corporations,171 and was clearly demonstrated in the Uranium
litigation,172 whereby the defendant companies,173 despite being assisted by
numerous blocking and claw-back statutes which may have been invoked to
168
169
170
171
172
173
See Commonwealth of Australia, above n 79, 55. Note that in the UK this was taken further
by the Protection of Trading Interests Act 1980 (UK) whereby qualifying persons, whether
located in the UK or not, could sue in a British Court to recoup moneys paid to US plaintiffs
under their antitrust laws (clause 6).
With the increasing multi-nationalisation of corporations it will often be the case that the
plaintiff company will have assets in the country of the defendant. Further, it is conceivable
that the US could itself create its own claw-back statutes to reverse the effects of foreign
claw-back legislation and this process could continue back and forth 'creating a chess game
environment of counterposed legislation'. See Commonwealth of Australia, above n 79, 56.
The Protection of Trading Interest Act 1980 (UK) and Slaughter and Zaring, above n 31, 12
fn 40.
See further Lowe, above n 85, 729 who refers to the prudential compliance with United
States laws, or de facto compliance, due to trading interests and the risk of litigation from
US extraterritorial jurisdictional clams.
It has been estimated that 90% of the world's multinational enterprises are US controlled:
see Pengilley, above n 79, 33.
Westinghouse Electric Corp v Rio Algom Ltd (In re Uranium Antitrust Litigation) 617 F 2d
1248 (7th Cir 1980) (Westinghouse).
Including British, South African, Australian and Canadian companies.
Chapter5|Page260
undermine any US determination against them,174 nevertheless decided to settle

the case, incurring a significant financial loss.175
5.5 Extraterritoriality in relation to mergers

The effects doctrine has now been expressly implemented in many competition
laws, with nations that once objected fervently against US extraterritoriality on
international law grounds,176 now asserting the same or similar arguments to
regulate external activity impacting on their markets.177 This convergence of
approach has reduced disputes among states about extraterritorial scope of
merger laws,178 some claiming its wide acceptance has provided evidence of a
new state practice and a new orientation of public international law.179
Nearly all OECD countries now apply a form of effects doctrine180 to establish
subject-matter jurisdiction, both in relation to the substantive law and the
procedural notification requirements for mergers.181 In relation to the latter, these
take the form of thresholds which normally require a certain level of local turnover
(jurisdictional nexus), but without requiring any local presence.182 In this respect
174
175
176
177
178
179
180
181
182
Default judgment was in fact entered against them when they failed to appear (at 1256),
illustrating, perhaps, the significance US courts attach to foreign blocking legislation.
See Commonwealth of Australia, above n 79, 25-27 for a discussion of the circumstances
surrounding the settlement in this case.
See, eg, Swaine, Local Law of Global Antitrust, above n 71, 3 and Noonan, above n 58, 5.
See, eg, Swaine, Local Law of Global Antitrust, above n 71, 13, noting increased emulation
of the effects doctrine.
See, eg, Mark R Joelson, An International Antitrust Primer: A Guide to the Operation of
United States, European Union and Other Key Competition Laws in the Global Economy,
International Competition Law Series (3rd ed, 2006) 65.
See, eg, William E Kovacic, Extraterritoriality, Institutions and Convergence in International
Competition Policy (Speech to Annual Meeting of the American Society of International
Law, Washington DC, 5 April 2003) 3.
See generally ICPAC, 'International Competition Policy Advisory Committee to the Attorney
General and Assistant Attorney General for Antitrust - Final Report' (Department of Justice,
United States, 2000) 113.
Very limited exceptions, including Canada and possibly Ireland and Mexico. Of the
voluntary notification regimes some local presence or national connection is probably
Chapter5|Page261
turnover is generally used as a proxy for likely effect and it is clear that there are
many instances in which the jurisdiction to review mergers is asserted despite the
absence of significant actual or potential effects, the existence of which can only
be determined by taking into account additional factors.183 Prior to blocking a
merger or imposing merger remedies, a more detailed assessment of likely effect
will be undertaken and countries will, to varying degrees, consider the interests of
other states relative to their own.
5.6 Multiple extraterritorial claims and the potential for

conflict
Where jurisdictional claims based on economic effects determined by financial
thresholds alone are recognised as legitimate, it is clear that situations may arise
in which more than one nation has an interest in regulating the conduct or
transaction in question and asserting a right to do so. 184 Such overlapping
claims have the clear potential to generate legal conflict and political tension.185
While the instances in which such conflict have arisen have been relatively rare in
practice, where they have occurred they have generated significant tension and
risked affecting trade relations between otherwise friendly states. This section
examines some of the instances in which overlapping jurisdictional claims in the
context of mergers has generated conflict.186 Two of the most infamous
183
184
185
186
required: see Whish (2009), above n 133, 487 and Ariel Ezrachi, Limitations on the
Extraterritorial Reach of the European Merger Regulation [2001] ECLR 137, 138.
See, eg, Ezrachi, above n 182, 139.
See William E Kovacic, Transatlantic Turbulence: The Boeing-McDonnell Douglas Merger
and International Competition Policy (2001) 68 Antitrust Law Journal 805, 806-807 noting
that it requires no extraordinary insight to foresee that the trend toward global economic
integration, played out against a backdrop of multiple antitrust regimes of dissimilar process,
purpose, and substance, [807] someday would demonstrate tension. See also Ezrachi,
above n 182, 140.
For a discussion of further instances of extraterritorial application of merger laws see: Debra
A Valentine, Building a Cooperative Framework for Oversight in Mergers The Answer to
Extraterritorial Issues in Merger Review (1998) 6 George Mason Law Review 525. See also
Chapter5|Page262
transatlantic clashes in relation to mergers involved the aviation industry;187 the

first involved a proposed merger between Boeing and McDonnell Douglas; the
second, a proposed merger between GE and Honeywell. In both cases the
parties involved were registered in the US and the merger was blocked or
conditionally approved by the EU.188
The Boeing/McDonnell Douglas merger
The Boeing/McDonnell Douglas merger was the first to raise serious concerns
about possible divergent outcomes arising from multiple merger reviews.
Although it was not the first case in which a state had interfered in a merger
involving two foreign companies, the size and nature of the parties involved and
the fact that the companies affected by the interference were US companies
served to spark a level of political tension not previously seen in relation to global
mergers. The merger in this case was ultimately approved by both the US and
the EU, but only after certain concessions were made at the behest of the EC.189
187
188
189
Jennifer Antognini-ONeill, Conflicts in International Merger Enforcement: The Proposed de

Havilland Merger (1993) 9 Connecticut Journal of International Law 87.
Other high profile example includes the multimedia merger cases in 2000: AOL/Time
Warner, Time Warner/EMI and MCI WorldCom/Sprint. For discussion of these see
European Commission, Report from the Commission to the Council and the European
Parliament on the application of the agreements between the European Communities and
the Government of the United States of America and the Government of Canada Regarding
the Application of their Competition laws - 1 January 2002 to 31 December 2002 [2003]
COM(2003) 500 final, 3-4. See also Barry J Rodgers and Angus MacCulloch, Competition
Law and Policy in the EC and UK (4th ed, 2009) 291-295.
For discussion of another merger generating some conflict resulting from a third party
intervention, Impala v Commission, see Viavant, above n 2.
For a discussion of the Boeing case see Gifford and Sullivan, above n 67, Sondra Roberto,
The Boeing/McDonnell Douglas Merger Review: A Serious Stretch of European
Competition Powers (1998) 24 Brooklyn Journal of International Law 593, Eleanor Fox,
Antitrust Regulation across National Borders: The United States of Boeing versus the
European Union of Airbus (1998) 16 The Brookings Review 30, Kovacic, above n 185,
Kathleen Luz, The Boeing-McDonnell Douglas Merger: Competition law, parochialism, and
the need for a globalized antitrust system (1999) 32 The George Washington Journal of
International Law and Economics 155 and Steve Rolinitis, The Boeing & McDonnell Douglas
Merger, 17 April 1997 (Report prepared for Dr David Loomis, Illinois State University).
Chapter5|Page263
The case involved a proposed merger between two US companies, Boeing and
McDonnell Douglas. The relevant market was the world market for large
commercial jet aircraft.190 At the time Boeing was the largest company in the
market for commercial aircraft, accounting for approximately 64% of sales.191
The only other significant rival was the European corporation, Airbus Industrie,
which accounted for approximately 30% of the market.192 McDonnell Douglas
accounted for the remaining 6% of the market.193 There was evidence
McDonnell Douglas share was decreasing while Airbus share was increasing.194
Barriers to entry were extremely high. 195
The US FTC conducted a thorough market inquiry and, after evaluating more
than 5 million pages of documents and conducting numerous depositions,196
approved the merger.197 In a majority decision, the FTC concluded that the
acquisition would not substantially lessen competition or tend to create a
monopoly in either defense or commercial aircraft markets.198 Although it is
uncommon for the FTC to provide reasons for its decision to clear a merger, the
190
191
192
193
194
195
196
197
198
Commission Decision of 30 July 1997 declaring a concentration compatible with the

common market and the functioning of the EEA Agreement, Case IV/M877 [1997] OJ
L/336/16, para 9. Although the parties also competed in respect of military aircraft, the
Commission limited the scope of its inquiry to the commercial aircraft market; see para 12.
L/336/16, para 29. See also Federal Trade Commission, Statement of Chairman Robert
Pitofsky and Commissioners Janet D Steiger, Roscoe B Starek III and Christine A Varney in
the Matter of the Boeing Company/McDonnell Douglas Corporation, File No 971-0051 (1
July 1997).
L/336/16, para 29
Ibid.
Ibid para 34.
Pitofsky, Steiger, Starek and Varney, above n 191.
IPCAC Final Report, above n 181,138. See also Kovacic, above n 185, 825.
Pitofsky, Steiger, Starek and Varney, above n 191. Commissioner Mary L Azcuenaga
dissented: Federal Trade Commission, Statement of Commissioner Mary L Azcuenaga, File
No 971-0051 (1 July 1997).
Pitofsky, Steiger, Starek and Varney, above n 191.
Chapter5|Page264
public interest in this case led them to release a brief statement199 in which they
claim not to have been influenced by a national champion argument, which they
rejected as almost certainly a delusion.200 Instead, they stated that their
decision was based on evidence that McDonnell Douglas no longer constitutes a
meaningful competitive force in the commercial aircraft market and that that
prospect was not likely to change.201
The EC, which reviewed less documents and conducted less interviews in its
investigation,202 but which shared information with the US during the review
period, expressed concerns about the merger and issued a Statement of
Objections. It concluded that the proposed concentration would lead to the
strengthening of a dominant position through which effective competition would
be significantly impeded in the common market203 and expressed particular
concern about Boeings ability to use the deteriorating Douglas commercial
operations and MDCs military programs to fortify its dominance in commercial
aircraft.204 However, following extensive negotiations between American and
European officials205 and the parties, the Commission did approve the merger
subject to concessions,206 including that Boeing give up certain long-term
exclusivity contracts and that they licence to its competitors (Airbus) McDonnell
technology developed with US government funding.207
199
200
201
202
203
204
205
206
207
Ibid.
Ibid.
Ibid.
Kovacic, above n 185, 825 and IPCAC Final Report, above n 181,138.
L/336/16, para 113
Kovacic, above n 185, 833
See further ibid 826.
Ibid 807
Fox, Antitrust Regulation across National Borders, above n 189. See also Commission
Decision of 30 July 1997 declaring a concentration compatible with the common market and
the functioning of the EEA Agreement, Case IV/M877 [1997] OJ L/336/16, part IX. See also
Ezrachi, above n 182, 140.
Chapter5|Page265
The Commissions objections drew bitter reaction from across the Atlantic and
equally bitter counter-reaction from Europe, with many claiming that the
conclusions on both sides were entirely political.208
Most Americans believe the skirmish was a game of the Europeans to protect
their champion Airbus. Most Europeans believe it was a game of the Americans
to protect their champion Boeing.209
These views were fuelled by media reports210 which claimed, for example, that
the ECs decision was based purely on its protectionist interest in promoting
Airbus.211
Politicians also weighed heavily into the debate. During the course of the
European investigation, then President Clinton announced that he was
concerned about what appears to be the reasons for the objection to the BoeingMcDonnell Douglas merger by the European Union,212 observing that it would be
unfortunate if we had a trade stand-off with them.213 The US Senate issued a
resolution, in which it claimed that the reason for the ECs objections were to
208
209
210
211
212
213
See, eg, Fox, Antitrust Regulation across National Borders, above n 189, 31, observing that
few Americans or Europeans believe that the Boeing affair was anything other than
political. See also Swaine, Local Law of Global Antitrust, above n 71, 2.
Fox, Antitrust Regulation across National Borders, above n 189, 31. See also Kovacic,
above n 185, 808, further observing that Americans often seem convinced to the point of
moral certainty that naked economic nationalism animated the ECs decision, and
Europeans usually appear equally persuaded that the FTCs forebearance was certifying
proof of a political fix.
See, for example, Edmund L Andrews, Boeing, Threatened, Sees Trade War, The New
York Times Late Edition, 21 May 1997, 1; Brian Coleman, Clinton Hints US May Retaliate
if EU Tries to Block Boeing-McDonnell Deal Wall Street Journal, 18 July 1997, A2; Holman
W Jenkins Jr, Whats a Little Antitrust Between Friends?, The Wall Street Journal, 28
January 1997, A 17; Steven Pearlstein, Europeans Relent, Back Boeing merger,
Washington Post, 24 July 1997, E01; Tyson, above n 170, A14. Compare, Eleanor M Fox
and Andreas F Lowenfeld, Letters to the Editor: Boeing Affairs Valuable Lessons, Wall
Street Journal, 5 August 1997, A19 and Pearlstein and Mintz, above n 170, H01.
See further: Ezrachi, above n 182, 140. Also that the Europeans are trying to protect Airbus
there is no consumer rationale for opposing the Boeing-McDonnell Douglas merger.:
Tyson, above n 170, A14
As quoted in Fox, Antitrust Regulation across National Borders, above n 189, 30.
Coleman, above n 210, A2.
Chapter5|Page266
unfairly advantage Airbus214 and that any such disapproval on the part of the
European Commission would constitute an unwarranted and unprecedented
interference in a United States business transaction.215 The Senate suggested
that the President take such actions as he deems appropriate to protect US
interests in connection therewith.216
The House passed a similar resolution several days later,217 which received
unanimous support. The comments of some of the speakers indicate the
strength of political feeling about the EUs position, including that blocking the
merger would be an ill-considered step that could lead to a trade war,218 that the
House must send a clear message to the Europeans that this act will not be
tolerated,219 that the US must draw a clear line in the sand now to prevent any
further infringements by foreign governments on US business decisions220 and
that it was appalling that leaders of other nations feel bold enough to tell America
how to run. 221
214
215
216
217
218
219
220
221
The resolution stated that the sole true reason for the European Commissions criticism and
imminent disapproval of the merger is to gain an unfair competitive advantage for Airbus, a
government owned aircraft manufacturer: United States Congressional Record Senate, 16
July 1997, S7609, Senate Resolution 108.
United States Congressional Record Senate, 16 July 1997, S7609, Senate Resolution
108.
Ibid.
United States Congressional Record House of Representatives, 22 July 1997, Page
H5517, House Resolution 191, including a statement that the President should take such
actions as he considers to be appropriate to protect United States interests in connection
with this matter.
H5518 (Mr Gilman from New York).
H5518 (Mr Metcalf from Washington).
H5518 (Mr Metcalf from Washington).
H5521 (Mr Packard). See also United States Congressional Record House of
Representatives, 22 July 1997, Page H5518 (Mr Luther): [The] idea that the European
Commission can exert jurisdiction and say that these two companies cannot merge,
especially after this has been approved by the Department of Defense, it has been approved
by the Federal Trade Commission, and under our process here in the United States, is
wrong.
Chapter5|Page267
Predictably, the EC rejected the critique, claiming its decision was based entirely
on competition law factors.222 In this claim they found support with some
academic commentators in the US, who suggested that the US reaction was
hypocritical, given its threats to block, exterritorialy, mergers in other
jurisdictions223 and observing that those who spoke of the audaciousness of the
EC to threaten to block a merger of the last two American commercial jet aircraft
makers were apparently unaware that it is the announced policy of the US
antitrust agencies to challenge an anticompetitive merger of foreign firms when
the tables are turned.224
The proposed GE/Honeywell merger
A few years after the Boeing merger, the GE/Honeywell proposal became the first
in which the EC blocked a merger that had been approved by the US
authorities.225 The proposed merger was conglomerate, involving the leading
222
223
224
225
See further: Ezrachi, above n 182, 140

See, eg, Fox, Antitrust Regulation across National Borders, above n 189, 30, Valentine,
above n 186, 526-527 and Kovacic, above n 185, 846.
Fox and Lowenfeld, above n 210, A19. After reviewing the decisions of the EU against its
earlier decisions, both Fox and Kovacic separately concluded that the decisions of both the
EC and FTC could be explained as based on the substantive merits in each case, with the
different results reflecting divergent law: Fox, Antitrust Regulation across National Borders,
above n 189, 31 and Kovacic, above n 185, 842, 852 and 872-873. See generally Nihat
Aktas, Eric de Bodt and Richard Roll, 'Market Response to European Regulation of
Business Combinations' (UCLA Business Forecast, 2002) 24.
See William J Kolasky, GE/Honeywell: Continuing the Transatlantic Dialog (2002) 23
University of Pennsylvania Journal of International Economic Law 513. For detailed
discussion see Eleanor M Fox, 'GE/Honeywell: The US Merger that Europe Stopped - A
Story of the Politics of Convergence' in Eleanor M Fox and Daniel A Crane (eds), Antitrust
Stories (2007) 331. See also Dimitri Giotakos, 'GE/Honeywell: A Theoretic Bundle
Assessing Conglomerate Mergers Across the Atlantic' (2002) 23 University of Pennsylvania
Journal of International Economic Law 469, Yusaf Akbar, Grabbing Victory from the Jaws of
Defeat: Can the GE/Honeywell Merger Facilitate International Antitrust Policy Co-operation?
(2002) 25 World Competition 403, Eleanor M Fox, Mergers in Global Markets:
GE/Honeywell and the Future of Merger Control (2002) 23 University of Pennsylvania
Journal of International Economic Law 457, Syed Tariq Anwar, EUs Competition Policy and
the GE-Honeywell Merger Fiasco: Transatlantic Divergence and Consumer and Regulatory
Issues (2005) 47 Thunderbird International Business Review 601, Gale Group, 'Merger
Muddle; Antitrust; Transatlantic Antitrust Troubles', The Economist (United States), 23 June
2001, 4, Stefan Schmitz, The European Commissions Decision in GE/Honeywell and the
Question of the Goals of Antitrust Law (2002) 23 University of Pennsylvania Journal of
Chapter5|Page268
aircraft engine maker (GE) and the leading avionics/non-avionics manufacturer

(Honeywell)226 (both US companies) and, had it proceeded, would have been the
largest industrial merger in the worlds history.227
In May 2001 the US Department of Justice quickly cleared228 the merger, subject
to divestitures relating to overlapping business.229 The Canadian and several
other authorities also approved the merger.230 However, in July 2001 the EC
declared the merger to be incompatible with the common market, a decision
subsequently approved by the European Court of First Instance.231 The key
concerns identified were the elimination of competition in areas of horizontal
overlap, the potential for bundling, vertical foreclosure of competing engine
manufacturers and the use of financial leverage and vertical integration.232 As
was the case in Boeing, the US and EU authorities consulted during the course of
the investigation, but disagreed on the effects of the merger.
226
227
228
229
230
231
232
International Economic Law 539, Dimitri Giotakos, Laurent Petit, Gaelle Garnier and Peter
De Luyck, Directorate-General Competition, Directorate B, General Electric/Honeywell An
Insight into the Commissions Investigation and Decision (2001)(3) Competition Policy
Newsletter 5, Edward T Swaine, Competition, Not Competitors, Nor Canards: Ways of
Criticizing the Commission (2002) 23 University of Pennsylvania Journal of International
Economic Law 597. The case was not, however, the first in which a merger involving a US
company was prohibited by the Commission that honour goes to the MCI
WorldCom/Sprint merger in 2000: see discussion in European Commission, Report from the
Commission to the Council and the European Parliament on the application of the
agreements between the European Communities and the Government of the United States
of America and the Government of Canada Regarding the Application of their Competition
laws - 1 January 2002 to 31 December 2002 [2003] COM(2003) 500 final 3-4.
Giotakos, Petit, Garnier and Luyck, above n 225, 5. For a discussion of the relevant
markets and shares held by each company see: Fox, The US Merger that Europe Stopped,
above n 225, 336.
Fox, The US Merger that Europe Stopped, above n 225, 331.
See Akbar, above n 225, 403.
Fox, The US Merger that Europe Stopped, above n 225, 338.
See discussion in Edmund L Andrews and Paul Meller, Europe Ends Bid by GE For
Honeywell, The New York Times (New York), 4 July 2001.
General Electric Co v Commission, Case T-210/01 (CFI 14 Dec 2005). Although the then
CFI did not agree with all the reasoning of the Commission, it affirmed sufficient of the
reasons to continue to hold the dominance test had been satisfied.
Fox, The US Merger that Europe Stopped, above n 225, 331, 339-340
Chapter5|Page269
Like the Boeing decision, this prompted vigorous debate across the Atlantic.233 In
the US, the Assistant Attorney General for Antitrust, Charles James, issued a
press release criticising the decision, noting a significant point of divergence in
relation to the evaluation of conglomerate mergers234 and claiming that the ECs
decision was about protecting competitors and not competition.235 Treasury
Secretary Paul ONeil went further, describing the EC as the closest thing you
can find to an autocratic organization that can successfully impose their will on
things that one [332] would think are outside their scope of attention. 236
The ECs Competition Commissioner, Mario Monti, quickly went on the counteroffensive, deploring attempts to misinform the public and to trigger political
intervention,237 and observing that this was a matter of law and economics, not
politics. 238 He gave a speech in which he stated, for the first time, that the goal
of competition policy, in all its respects, is to protect consumer welfare by
maintaining a high degree of competition in the common market.239 He also
noted that the different views do not mean that one authority is doing a technical
analysis and the other pursuing a political goal, as some might pretend, but
233
234
235
236
237
238
239
Fox describes the case as predominantly a story about sovereignty and the political dance
of convergence: Fox, The US Merger that Europe Stopped, above n 225, 332. See also
Rodger and MacCulloch, above n 187, 306-307.
See,eg, Kolasky, Continuing the Transatlantic Dialog, above n 225, 513.
See discussion in Fox, The US Merger that Europe Stopped, above n 225, 343. For
example, William Kolasky, former Deputy Assistant Attorney General of the Antitrust Division
of the US Department of Justice maintains that the different outcomes [in GE/Honeywell]
stemmed from profound differences in how the US and EU viewed the objectives of
competition policy : William Kolasky, 'International Comity in Antitrust: Advances and
Challenges' (25 May 2007) 22(16) Washington Legal Foundation: Legal Backgrounder
<http://www.wlf.org/upload/05-25-07kolasky.pdf> at 10 October 2009, 2.
Tom Brown, Update 2-US Treasury Chief Slaps at Europe Over GE Deal, Reuters, 27 June
2001, as quoted in Fox, The US Merger that Europe Stopped, above n 225, 331-332
European Commission, Commissioner Monti Dismisses Criticism of GE/Honeywell Merger
Review and Rejects Politicisation of the Case (Press Release IP/01/855, 18 June 2001).
Ibid.
Mario Monti, 'The Future for Competition Policy in the European Union' (Speech delivered at
the Merchant Taylors Hall, London, 9 July 2001).
Chapter5|Page270
simply that we might interpret facts differently and forecast the effects of an
operation in different ways.240
5.7 Analysis: Is the extraterritorial application of merger laws

appropriate?
Broadly, two issues arise in assessing extraterritoriality in relation to mergers.
First, what is the appropriate scope of extraterritorial jurisdiction? Second, when
should extraterritorial jurisdiction be exercised in relation to mergers?
The extraterritorial application of competition laws is frequently criticised as
trespassing on the sovereignty of the nation in which the conduct occurred.
Conversely, however, the conduct of business in one state, which has negative
welfare implications in another state, might infringe on the sovereignty of the
second state. There is, therefore, a tension that arises between protecting
sovereign legal rights and protecting sovereign welfare interests. A third tension
also arises; that is, protecting and advancing global modern consumer welfare.
Where effects are felt by consumers outside the home state of the merging
parties, the absence of extraterritorial jurisdiction might result in global welfarereducing conduct escaping regulation altogether.
It is now widely accepted that, at least in the context of economic-based law,
including merger law, countries have a right, recognised in public international
law,241 to assert extraterritorial jurisdiction where the conduct in question causes
a significant and sufficiently direct adverse effect in their state.242 The result of
this recognition is that, at least where the effect of conduct transcends territorial
240
241
242
European Commission, The Commission Prohibits GEs Acquisition of Honeywell (Press

Release IP/01/939, 3 July 2001).
Compare, Giannino, above n 56, 45, who notes that there is still some division amongst
legal scholars about whether the doctrine of effects is consistent with public international
law.
See, eg, IPCAC Final Report, above n 181, 53 and Noonan, above n 58, 5.
Chapter5|Page271
boundaries, nations having sufficient interest will enjoy concurrent jurisdiction to

regulate that conduct.243
In relation to mergers, there is further broad acceptance that financial turnover
thresholds, provided they incorporate a sufficient local threshold nexus
component, can serve as an appropriate, if imperfect, proxy for establishing the
necessary local effect in each case.244 The ex ante nature of merger review in
most countries necessitates such an approach to provide legal certainty for the
parties. However, before a merger can be blocked or altered on its substantive
merits, something more is required; that is, a genuine, and not merely presumed,
local effect.
Even where a genuine jurisdictional nexus does exists, the expansion of markets
internationally and the increasing volume of merger laws and regulations globally,
necessarily results in firms being subjected to multiple regulatory obligations and
possible legal sanctions for conduct that might previously have attracted only
domestic attention.245 In addition to increasing regulatory costs for parties, such
overlapping jurisdictional claims have the clear potential to lead to legal and
political conflict. Despite this, conflicts of great significance politically remain
rare.246
It is, however, likely that, as more jurisdictions add PMN to their
competition law repertoire, the risk of divergence will increase.247 Although

increased convergence and cooperation in substantive law and procedure can
reduce the potential for such conflict, it remains likely that at times, different
interpretations of fact, different effects in different jurisdictions or mergers raising
243
244
245
246
247
See, eg, Dodge, above n 22, 27, Noonan, above n 58, 371 and Sweeney, Global
Competition, above n 155, 213.
See, eg, ICPAC Final Report, above n 181, 98-99, fn 25, noting that threshold-based
jurisdiction of this nature may violate customary principles of international law.
See, eg, Sweeney, Combating Foreign Anti-Competitive Conduct, above n 1, 41 and
Noonan, above n 58, 6.
See Kovacic, Extraterritoriality, above n 180, 3. GE/Honeywell is often cited when
discussing inconsistent enforcement or conflict between [180] competition authorities, but
such instances have been rare in practice: Jonathan Galloway, Convergence in
International Merger Control (2009) 5 The Competition Law Review 179, 179-180.
See discussion in Galloway, above n 246, 180.
Chapter5|Page272
issues of national interest to one or more investigating states will produce such
conflict.248 Most recently this potential for conflict arose as a result of the EC
opening an in-depth merger review into the proposed Oracle/Sun Microsystems
merger, which received US DOJ(AD) approval following a second request
review.249 This investigation threatened to give rise to another instance of transAtlantic divergence in merger review,250 despite a recent significant increase in
convergence and cooperation in merger law and analysis across the Atlantic,251
but in January 2010 was resolved through the provision of commitments from
Oracle.252
248
249
250
251
252
Compare John McGinnis, 'The Political Harmony of International Antitrust Harmonization' in

Richard A Epstein and Michael S Greeve (eds), Competition Laws in Conflict: Antitrust
Jurisdiction in the Global Economy (2004) 126, 134 who notes that many antitrust laws are
neutral on their face and that as a result it is not so clear that foreign interests will be
slighted, because the legal institutions charged with enforcing the rules may not be as
subject to parochial bias as legislators. However, merger regulation may be different in this
respect. Outcomes are normally determined by agencies (whether formally or informally)
and in a number of cases it will be clear which countrys welfare will be enhanced and which
might be reduced by the consummation of the notified transaction.
Department of Justice (US), Antitrust Division Issues Statement on the European
Commissions Decision Regarding the Proposed Transaction Between Oracle and Sun
(Press Release, 9 November 2009). See also Jordan Robertson, EU Probes Oracle-Sun
Deal, Cites Open-Source Issue, AP Online, 3 September 2009.
Department of Justice (US), Department of Justice Antitrust Division Issues Statement on
the European Commissions Decision Regarding the Proposed Transaction Between Oracle
and Sun (Press Release, 9 November 2009); Sarah Arnott, Transatlantic Row over
Oracles Sun takeover, The Independent, 11 November 2009. Compare Michael Corkery,
Putting the Sun-Oracle Antitrust Case in Perspective (20 November 2009) The Wall Street
Journal Blogs <http://blogs.wsj.com/deals/2009/11/10/putting-the-sun-oracle-antitrust-casein-perspective/tab/article/> at 22 January 2010. See also Congress of the United States,
Letter to Assistant Attorney General, Department of Justice, Christine Varney, 18 September
2009; Congress of the United States, Letter to Chairman of the Federal Trade Commission,
Jonathan Leibowitz, 18 September 2009 (although not referring directly to the Oracle case,
these letters expressed concern about a series of rulings in Europe which they claimed
provides evidence of a troublesome trend in Europe toward regulatory protectionism).
Christine A Varney, 'Our Progress Towards International Convergence' (Paper presented at
and Policy, New York, 24 September 2009) 2-6.
EC, Mergers: Commission Clears Oracles Proposed Acquisition of Sun Microsystems
(Press Release IP/10/40, 21 January 2010). See also Oracle, Oracle Makes Commitments
to Customers, Developers and Users of MySQL (Press Release, 14 December 2009) and
John Miller and Peppi Kiviniemi, EU Clears Oracle to Buy Sun Microsystems, Wall Street
Journal (Online), 21 January 2010. Some, however, claim that the approval was a result of
Chapter5|Page273
Consequently, while it is valid for jurisdictional claims to be made based on local

economic effect, the scope for divergence and the uncertainty and tension it may
generate, both privately and politically, means that it is necessary to assess
whether, in cases where effects are felt in multiple jurisdictions, all relevant
jurisdictions should apply their laws extraterritorially.
Despite the risk of regulatory conflict arising from multiple reviews, there is
nothing inherently objectionable about more than one country evaluating conduct
in which they have a sufficient economic interest.253 Where firms choose to
operate in a global or transnational market, the obligation to comply with multiple
national legal regimes is not surprising or inappropriate or, at least in most cases,
unduly onerous. For example, while compliance with tax obligations in multiple
jurisdictions might inconvenience companies, it is not an unreasonable
requirement. In the context of mergers, a concurrent approach to jurisdiction
enables all jurisdictions most affected by the merger the opportunity to evaluate it
by reference to their own market conditions and substantive law. A concurrent
approach to jurisdiction for transnational mergers also prevents parties employing
a deliberate strategy of evading merger review by the simple expedient of
registering or completing the transaction in a more permissive state.254
The key concern raised with concurrent application of extraterritorial jurisdiction is
that of over-regulation.255 Concurrent application of extraterritorial jurisdiction to
regulate mergers will, it is argued, result in more mergers being blocked or
modified than would be optimal for the maximisation of global welfare.256 Thus,
while a combination of jurisdictions looking at the same merger should increase
253
254
255
256
political pressure from the US: Kroes in U-turn on Oracle-Sun Deal EurActiv.com (Online),
21 January 2010 <http://www.euractiv.com/en/infosociety/kroes-turn-oracle-sun-deal/article189132> at 22 January 2010.
Sweeney, Global Competition, above n 155, 237 observing that adjusting to different
national domestic rules ... is a normal cost of doing business internationally.
See, eg, Sweeney, Combating Foreign Anti-Competitive Conduct, above n 1, 45.
See, eg, Dodge, above n 22, 28 and IPCAC Final Report, above n 181, 53.
See discussion in Utton, above n 2, 96 where he concludes that under an extraterritoriality
regime national antitrust laws will thus be tougher than global welfare requires.
Chapter5|Page274
the probability of globally inefficient mergers being blocked, it is also more likely
to result in efficient mergers being blocked because of the negative impact it has
in one state which might fail to consider the counterveiling positive externalities it
produces257 or may be unable to construct effective remedies which are
nationally confined.258
While this presents a genuine threat to achieving the goal of optimising global
modern consumer welfare, it does not follow that eliminating concurrent
jurisdiction would result in a better global welfare outcome. Deferring exclusive
jurisdiction to one state even if the one most affected by the proposed merger
is just as likely to lead to inefficient underregulation as concurrent jurisdiction is
to lead to inefficient overregulation',259 so that, the absence of extraterritorial
jurisdiction will render merger policy weaker than would be optimal globally.260
Consequently, even if countries were prepared to cede jurisdiction to another
state, the application of national laws to a merger having transnational
implications, while possibly reducing transaction costs for parties, is likely to be
more permissive of mergers than would an optimal global policy. This is because
application of national merger laws, even where deference is given to the
257
258
259
260
See, eg, Utton, above n 2, 96 and Ezrachi, above n 182, 144

See, eg, Sweeney, Global Competition, above n 155, 215, noting that for those mergers in
which it is not possible to construct different national remedies, with the result that only a
single international remedy can be constructed to address competition concerns domestic
regulation becomes an exercise in international regulation.
Dodge, above n 22, 28. See further Utton, above n 2, 96, who observes that if
extraterritoriality is not possible, national antitrust laws will tend to be applied more weakly,
and more anticompetitive activities which reduce global welfare will be permitted.
See, eg, Guzman, Is International Antitrust Possible, above n 2,1523, Michael J Trebilcock
and Edward M Iacobucci, National Treatment and Extraterritoriality: Defining the Domains of
Trade and Antitrust Policy in Richard A Epstein and Michael S Greve (Eds), Competition
Laws in Conflict: Antitrust Jurisdiction in the Global Economy (2004) 154 and Dodge, above
n 22, 31.
Chapter5|Page275
interests of other affected states, will invariably focus greater attention on local,
rather than global, effects.261
Concurrent jurisdiction does, however, carry with it the risk that enforcement
priority [will] default to the most aggressive regulator.262 That is, the least
permissive regulation may trump the more permissive.
It has been argued, in
this respect, that the country with the toughest antitrust interpretation of a
particular transaction will make a de facto decision for everybody else.263
It is, however, not clear that the toughest merger law will always determine the
outcome in transnational merger cases. The market effects of a particular merger
may, for example, be genuinely different in different states as a result of the
location of producers or customers and other domestic competitors.264 The
scope for such differences was highlighted by the proposed acquisition of
Cadbury Schweppes beverages by the Coca-Cola company. The proposed
acquisition was confined to markets outside the United States265 because of a
recognition that there would be competition concerns arising in that jurisdiction.
The merger was challenged in Australia, with Cadbury Schweppes David Kappler noting that the Australian reaction was unique because of the small market
261
262
263
264
265
Matthew Lynn, Birds of Prey Boeing vs Airbus: A Battle for the Skies (1998), 229 as
quoted in Kovacic, above n 185, 808, fn 12, observing that in a clash between continents,
people root for the home team; the blinkers of nationalism come down, blinding the
spectators to anything but the virtue of their own side.
See, eg, Henry C Thumann, Multijurisdictional Regulation of Monopoly in the Global Market
[2008] Wisconsin Law Review 261, 265 and Sweeney, Global Competition, above n 155,
215.
See, eg, Editorial, 'Antitrust Explosion; Competition Regulators Must Not Compete With
Each Other', Financial Times (London), 2008, 10. See also Giannino, above n 56, 47.
For example, Kolasky acknowledges that it is inevitable that there will always be cases
where the US and EU and perhaps other jurisdictions may reach different conclusions.
In most cases, this will be because of different market conditions in different geographic
markets, but in some cases, it will reflect honest differences of opinion: Kolasky,
International Comity in Antitrust, above n 235, 3
See further Henry Unger, Coca-Cola Posts Gains Despite Snags in Australian Deal, Knight
Ridder/Tribune Business News, 8 April 1999.
Chapter5|Page276
share of Cokes biggest rival in Australia266 with the result that the deal would
have increased Coca-Colas share of the Australian soft drink market from 65 per
cent to 75 per cent.267 Some other jurisdictions also expressed concerns about
the impact of the proposed acquisition on local markets268 and the transaction
was revised to exclude more than twenty European countries as a result of
regulatory resistance.269 Provided remedies are able to be confined nationally,
they will not preclude the merger proceeding elsewhere, so that despite
regulatory challenge in Australia, Mexico and several European countries, the
Coca-Cola Company/Cadbury Schweppes merger proceeded in a large number
of jurisdictions in which regulatory approval was either granted (such as in the
UK)270 or not required.
In these cases, carve-outs from the originally proposed
transnational merger designed to address local competition concerns were not

necessarily the product of tougher regulations in some countries, but arose from
the unique market impact the merger would have produced in the local market.271
Broad convergence of substantive law among OECD states also minimises the
threat that a single state will determine the outcome in transnational merger
cases, as will natural limits on the ability to enforce such laws, such as where the
266
267
268
269
270
271
Aussie Block on Cadburys Coke Deal, The Evening Standard, London, 8 April 1999.
Although the parties submitted revised proposals designed to alleviate the ACCCs
concerns, the revised proposal was also rejected: Australian Competition and Consumer
Commission, ACCC Opposes Revised Coke/Schweppes Acquisition (Press Release MR
089/99, 8 June 1999). See also Cadbury Schweppes: Acquisition of Cadbury Schweppes
Beverage Brands by the Coca-Cola Company in Australia, M2 Presswire, 14 April 1999.
Australian Competition and Consumer Commission, ACCC Opposes the CocaCola/Schweppes Acquisition (Media Release MR 35/98, 8 April 1999) . See further Unger,
Henry, Coca-Cola Posts Gains Despite Snags in Australian Deal, Knight Ridder/Tribune
Business News, 8 April 1999, Aussie Block on Cadburys Coke Deal, The Evening
Standard, London, 8 April 1999 and Cadbury Schweppes, Coke Rearrange Deal to Placate
EU Regulators, Food & Drink Weekly, 31 May 1999.
See further Unger, above n 265.
ACCC, ACCC Opposes Revised Coke/Schweppes Acquisition, above n 266.
UK Competition Officials Give Green Light Coca-Cola/Cadbury Brands Deal, Food & Drink
Weekly, 7 June 1999.
Although detailed assessment of market effects in different jurisdictions is rarely available
due to the administrative nature of review procedures in many countries, the potential and
even likelihood in some cases that different effects will be produced is clear.
Chapter5|Page277
parties hold no assets in the asserting jurisdiction.272 Instances of direct conflict

between regulatory decisions have, in any event, been rare in practice. In this
respect experience suggests that, although the risk of divergent outcomes can
not be alleviated entirely, given the powerful national interests that sometimes
operate and the different effect a merge may have in different jurisdictions, the
risk of inconsistent decisions remains small and likely to continue to be so into
the future as cooperation increases and laws and economic analysis continue to
converge.
A related concern, which is likely to arise more frequently in practice, is the ability
that extraterritorial ex ante merger review gives a states regulator to hold up a
merger, whether by political design273 or inefficient regulation. The risk of delay
has the potential to damage or destroy a merger even in cases where the
different regulators agree on the substantive issues. This risk is, however, also
minimised by the fact that it is normally only large regulators who will have the
necessary power to effectively apply their merger laws extraterritorially and
engage in this sort of conduct.274 Nevertheless, the effect of delay caused by
multi-jurisdictional merger regulation should not be underestimated and requires
justification, particularly in light of the ex ante nature of review which carries with
it the risk that pro-competitive mergers might be under threat from inefficiencies
in a single states review process. It is, therefore, desirable that such delays be
minimised and some existing and proposed recommendations for achieving this
will be considered in Part V. The risk of delay itself does not, however, make the
concurrent extraterritorial application of merger laws inappropriate and a single
272
273
274
In this respect the IBA Task Force on Extraterritorial Jurisdiction has observed that smaller
states tend to be far less proactive than the United States and European Union in actually
attempting to assert extraterritorial jurisdiction for numerous reasons, for example, lack of
power and resources : International Bar Association, Report of the Task Force on
Extraterritorial Jurisdiction (6 February 2009) 48. See also Sweeney, Global Competition,
above n 155, 218.
See Dodge, above n 22, 37.
See Sweeney, Global Competition, above n 155, 218, Dodge, above n 22, 38 and
International Bar Association, above n 272, 47.
Chapter5|Page278
reviewing state is just as capable of thwarting a merger through delayed process.

The issue of regulatory delay goes to the manner in which PMN should be
applied rather than to the issue of whether it should be applied at first instance.
In the absence of any broader international agreement, it is appropriate that
countries invoke extraterritorial jurisdiction to evaluate mergers which might have
a substantial and direct local economic effect, even where that leads to
concurrent jurisdictional claims. To ensure that the concurrent application of
merger laws does not become unduly burdensome, it is important that the
process of extraterritorial application be made as efficient as possible. 275 Most
importantly, countries must ensure that their thresholds even if couched in
relatively arbitrary financial terms are set at an appropriately high level to
capture only those mergers likely to have the requisite anti-competitive effect. In
this respect it has been widely recognised that, in recent years, thresholds need
to be reviewed on a regular basis to account for inflation and other market
changes so as to reduce the notification burden on parties whose mergers are
unlikely to raise significant competition concerns. 276
It is also important that where concerns do arise, remedies be restricted to
address concerns in the market of the reviewing jurisdiction.277 Even remedies
so confined may generate externalities in other states, particularly where the
geographic market is global, but efforts should be made to avoid remedies having
275
276
277
Dodge, above n 22, 38.

Dodge, above n 22, 38. See also IPCAC Final Report, above n 181, 98-99 fn 25.
This will be discussed further in Part IV. See, for example approval by the ACCC of the
proposed acquisition of Wyeth by Pfizer after receiving undertakings by Pfizer that it will sell
certain Australian animal health assets.: Australian Competition and Consumer Commission,
ACCC Will Not Oppose Proposed Acquisition of Wyeth by Pfizer after Proposed Sale of
Animal Health Assets (Media Release NR 241/09, 30 September 2009).
Chapter5|Page279
serious effects in other jurisdictions and on their agencies independent

enforcement efforts.278
5.8 Conclusions
Territorial jurisdictional claims and associated territorial claims to sovereignty are
inadequate when considering economic activity which has no respect for such
territorial boundaries.279 For producers of products and services competing in
worldwide economic markets anticompetitive conduct occurring in one part of the
world can have an immediate and direct competitive effect throughout the rest of
the world280 and therefore demand regulatory solutions freed from territorial
underpinnings.281
Although is it rare that countries will need to rely purely on effects to assert
extraterritorial jurisdiction,282 the ability for a merger to produce economic effects
in multiple countries means that each of the countries sufficiently affected by a
proposed merger has an appropriate jurisdictional claim over the activity.283 In
assessing whether a sufficient local nexus exists, objective turnover thresholds
can provide an appropriate trigger for PMN,284 provided they are set at
appropriate levels and subject to regular review to prevent them increasing their
own remit due to the effects of inflation.285
278
279
280
281
282
283
284
285
Varney, Christine A, Coordinated Remedies: Convergence, Cooperation, and the Role of

Transparency (Speech delivered to the Institute of Competition Law, New Frontiers of
Antitrust Conference, Paris, 15 February 2010) 2
Thumann, above n 262, 262.
Buxbaum, above n 13, 668. See also Valentine, above n 186, 527
See Muchlinski, above n 37, 130
Thumann goes further, arguing that if competition authorities are to meet their responsibility
for keeping their respective national markets competitive, they necessarily must reach out to
regulate extraterritorial conduct that directly impacts their home markets: Thumann, above n
262, 261.
See further International Bar Association, above n 272, 58-59.
Ezrachi, above n 182, 139
Chapter5|Page280
Assertion of jurisdiction based on effects will inevitably result in multiple states

having concurrent jurisdiction over some transnational mergers which, in turn,
may result in over-regulation and cause some uncertainty and delay.286 This,
however, must be weighted against the likely consequences of under-regulation
were jurisdiction to remain territorially restricted.287 In a choice between exclusive
and concurrent extraterritorial jurisdiction for mergers having multinational effects,
optimal global merger policy288 is likely to be better facilitated by extraterritorial
jurisdiction, provided the threshold levels for determining jurisdiction are set at
appropriate levels.
Increased convergence in substantive law, analytical approach and cooperation
between states, particularly the US and EU, is likely to continue to reduce the
potential for conflicting outcomes where multiple reviews are conducted.289 This
will not, however, always be the case and conflicting outcomes are both to be
expected and even welcomed in appropriate cases. 290 The risk of different
results is not, by itself, cause for concern, even if not well received by the parties
involved.291 In some cases two authorities looking at the same transaction
should come to different results because the transaction will in fact have differing
286
287
288
289
290
291
See, eg, Ezrachi, above n 182, 141 and Sweeney, Global Competition, above n 155, 239.
Wilson acknowledges this paradox of multiple national reviews both limiting and extending
the reach of national merger laws: see Joseph Wilson, Globalization and the Limits of
National Merger Control Laws: Gaps in Global Governance and the Need for an
International Merger Control Regime (Doctor of Civil Law Thesis, McGill University, 2002)
299.
Dodge, above n 22, 31, referring to Guzman, Is International Antitrust Possible, above n 2,
who would define optimal policy without reference to distributional effects.
of Antitrust Conference, Paris, 15 February 2010) 3.
See, eg, Thumann, above n 262, 261, who claims that so long as such core unity is
maintained, divergence at the margin should not only be workable but also prove hospitable
to further evolution in economic understanding and sound competition policy.
Compare Sweeney, Global Competition, above n 155, 238, arguing that where the divergent
outcomes lead to remedies generate negative externalities then this becomes an
international problem which provides a compelling reason for an international agreement.
Chapter5|Page281
impacts on different markets.292 Divergent outcomes in such cases can even

have welfare enhancing effects and should not be met with undue alarm, as has
been the tendency among business and their advisors.
In the context of unilateral jurisdiction,293 the most appropriate approach to
merger regulation for achieving optimal global welfare is to permit all countries
whose welfare is sufficiently affected by the proposed merger to regulate it.294
292
293
294
Valentine, above n 186, 527 (emphasis added). Valentine also notes (at 528) that different
results might also reflect differences in nations histories, cultures, and values.
Comity, cooperation and multinational jurisdictional possibilities will be considered in
subsequent chapters.
Both within and beyond purely unilateral exercises of jurisdiction, co-operation between
states might be capable of maintaining or increasing the welfare benefits of the regulation of
transnational mergers at less regulatory cost. This will be considered in chapter 6 and
further in Part IV.
Chapter5|Page282
Part III: COMITY AND COOPERATION

This part considers the role that comity and consideration have played in the
regulation of transnational mergers. Chapter 6 will address the issue of comity
and Chapter 7 will evaluate in detail the role that cooperation, whether bilateral,
multilateral or international in scope, has played in influencing the substantive
and procedural approach taken to transnational merger review.
Chapter 6 The role of comity in merger review

So long as we have nation states, international comity that is, the respect
each nation accords to the laws and interests of other nations must
continue to be one of our guiding principles if our global economy is to
function efficiently.1
6.1 Introduction
Concerns associated with the assertion of extraterritorial jurisdiction of
competition law have been tempered to a degree by increasing recourse to
considerations of comity and by a series of formal bilateral cooperation
agreements,2 institutional recommendations and best practices relating to
cooperation in the application of competition laws to transnational conduct.
The focus of this chapter is the extent to which comity whether as an inherent
courtesy influencing national courts and regulators or as a more formal obligation
stemming from bilateral and multilateral agreements has influenced national
William Kolasky, 'International Comity in Antitrust: Advances and Challenges' (25 May 2007)
22(16) Washington Legal Foundation: Legal Backgrounder <http://www.wlf.org/upload/0525-07kolasky.pdf> at 10 October 2009.
See Damien Geradin, Marc Reysen and David Henry, 'Extraterritoriality, Comity and
Cooperation in EC Competition Law' (Working Paper, July 2008)
<http://ssrn.com/abstract=1175003> at 8 October 2009.
Chapter6|Page283
merger enforcement actions. Chapter 7 explores broader efforts at cooperation

and convergence in merger law and regulation.
The purpose of comity in merger review is not to reduce cost, increase efficiency
or harmonize laws per se, but rather to reduce or avoid conflict which might
otherwise arise where more than one state has an interest in a proposed merger.
This may have an ancillary benefit of reducing costs if, as a result of
considerations of comity, a country refrains from applying its own laws to a
transaction or defers enforcement to another state.
This chapter first briefly addresses the nature of comity generally. The second
section examines the traditional applications of comity now frequently referred
to as negative comity. The third section discusses the role of positive comity in
transnational merger review. Finally, an analysis of the effectiveness of comity
in reducing the existing regulatory burdens associated with transnational merger
review is undertaken.
6.2 The nature of comity

Comity does not form a part of public or private international law, but refers
generally to nonbinding state practices which reflect a courtesy3 and respect
between nations of the laws and interests of other nations.4 These range from
practices such as saluting flags of foreign warships at sea,5 to more substantial
considerations of foreign legal and political interests when determining whether to
See, eg, Buxbaum, above n 3, noting that arguably comity lies between law and mere
courtesy. Buxbaum was referring to Hilton v Guyot 159 US 113 (1895) and Department of
Justice and Federal Trade Commission, Antitrust Enforcement Guidelines for International
Operations - Issued by the US Department of Justice and the Federal Trade Commission
(1995).
Kolasky, International Comity in Antitrust, above n 1, 1. See also Robert C Reuland,
'Hartford Fire Insurance Co, Comity, and the Extraterritorial Reach of United States Antitrust
Law' (1994) 29 Texas International Law Journal 159, 190-197 and Leslie Rutherford and
Sheila Bone (eds), Osborns Concise Law Dictionary (8th ed, 1993).
International Law (2009) Encyclopdia Britannica
<http://www.britannica.com/EBchecked/topic/291011/international-law> at 9 October 2009
Chapter6|Page284
pursue domestically a legal claim which affects the interests of other nations.
While for any isolated transaction the incentives for such deference might be
limited, comity operates on the assumption that, at least in the long term, such
deference will be reciprocated and produce roughly equivalent mutual benefits.
In this respect, Eleanor Fox has described comity as a horizontal, nation-tonation concept, seeking by reciprocal deference to maximize the joint
interests of the affected nations or to split their differences through repeated
interactions. 6
In the context of competition laws generally, and merger laws in particular, this
principle has traditionally been applied restrictively. In the US, a true conflict
approach to comity has been adopted by courts since Hartford Fire.7 The EU has
adopted a similarly restrictive approach.8 This view of comity, combined with an
increasing willingness, particularly on the part of the US, to apply their
competition laws extraterritorially, provided a catalyst for the OECDs first Council
Recommendation on cooperation in relation to restrictive business practices in
1967.9 This included a comity provision recommending that Member countries
notify other Member countries within an appropriate time frame when
investigating competition law matters raising important interests for the other
Evidence to Antitrust Modernization Commission, Hearing on International Issues,

Washington DC, 15 February 2006 (revised 2 March 2006) (Eleanor M Fox)
<http://govinfo.library.unt.edu/amc/commission_hearings/pdf/Statement_Fox_final.pdf> at 26
October 2009, 6. Fox goes on to express the concern that comity may play into the hand of
nationalism and the nurturing of national champions.
Hartford Fire Insurance v California, 509 US 764 (1993). This decision held that
international comity did not dictate that the US should refrain from exercising jurisdiction
has been widely criticized outside the United States : Joseph P Griffin, Foreign
Governmental Reactions to US Assertions of Extraterritorial Jurisdiction (1998) 6 George
Mason Law Review 505, 519-520. See also Buxbaum, above n 3, 650-651 and Slaughter
and Zaring, above n 31,10.
See Geradin, Reysen and Henry, above n 2, 18, who note that the EC only takes comity
into consideration in circumstances where the relevant conduct is mandated in the third
country and that, wherever real conflict exists, the Commission will very likely seek to claim
an overriding interest in enforcement and brush aside comity.
OECD Council, Recommendation of the Council Concerning Cooperation between Member
Countries on Restrictive Business Practices Affecting International Trade, 5 October 1967,
C(67)53/final. See also further John Braithwaite and Peter Drahos, Global Business
Regulation (2000) 189.
Chapter6|Page285
state10 and that they take into consideration the views expressed by other parties,
as well as providing for cooperation and transmission of information. Revised
recommendations appeared in 197911 and, most recently, in 1995.12 Related
recommendations have also emerged, including the 1973 Recommendation,
which introduced principles now associated with the term positive comity.13
These recommendations have provided a model for bilateral and plurilateral cooperation agreements.14 The concept of comity imported into bilateral and
multilateral recommendations has evolved over time and, at least since 1991 (but
probably since 197315), has branched out into two distinct forms; negative comity,
which refers to the traditional principle pursuant to which foreign interests and
legislation should be considered by the state applying its competition laws16 and
positive comity, which refers to a more pro-active approach, pursuant to which
one country is asked to consider a request made by another to investigate
10
11
12
13
14
15
16
Bruno Zanettin, Cooperation Between Antitrust Agencies at the International Level (2002),
54.
OECD Council, Revised Recommendation of the Council Concerning Cooperation between
Member Countries on Restrictive Business Practices Affecting International Trade, 25
September 1979, C(79)154/final. This Recommendation combined the 1967 and 1973
OECD Recommendations: OECD Committee on Competition Law and Policy, 'CLP Report
on Positive Comity' (Report No DAFFE/CLP(99)/19, May 1999), 9.
OECD Council, Revised Recommendation of the Council concerning Co-operation between
Member Countries on Anticompetitive Practices Affecting International Trade, 27 July 1995,
C(95)130/final.
OECD Council, Recommendation Concerning a Consultation and Conciliation Procedure on
Restrictive Business Practices Affecting International Trade, 3 July 1973, C (73)99/final.
OECD Competition Committee, '100th Meeting of the Competition Committee: Executive
Summary of the Discussion' (DAF/COMP/M(2008)1/ANN3/FINAL, 14 May 2008), 3 (para 7).
See also A Neil Campbell and J William Rowley, 'The Internationalization of Unilateral
Conduct Laws - Conflict, Comity, Cooperation and/or Convergence?' (2008-2009) 75
Antitrust Law Journal 267, 300.
The Agreement between the Government of the United States of America and the European
Communities Regarding the Application of their Competition Laws (23 September 1991) is
frequently touted as the first to formally incorporate positive comity. However, although it
was the first in which the term positive comity was used, the OECD Council,
Recommendation Concerning a Consultation and Conciliation Procedure on Restrictive
Business Practices Affecting International Trade, 3 July 1973, C (73)99/final incorporated
concepts we would now refer to as positive comity.
Zanettin, above n 10, 54.
Chapter6|Page286
conduct occurring in its jurisdiction which is adversely affecting the other.17

Importantly, comity, whether positive or negative, is invoked for purposes of
respect and/or deference to the state having the greater connection to the
conduct involved18 and involves unilateral action, whether taken passively or at
the prompting of another country. It should not be conflated with the broader
concept of cooperation,19 which refers to joint activity and might include
information exchanges, coordination of merger timetables and discussions
between agencies about substantive merger issues.20
6.3 Negative comity

Traditional or negative comity embraces the principle of voluntary abstention
rather than direct or proactive cooperation.21 It involves two broad principles in
the context of competition laws:
(a) Providing notice to other countries when competition law enforcement
action might affect their interests; and
(b) Giving full and sympathetic consideration to possible ways of fulfilling its
enforcement needs without harming those interests.22
17
18
19
20
21
OECD, CLP Report on Positive Comity, above n 11, 2.

In cartel cases this will generally be the country in which the cartel was formed; in relation to
mergers the position is less clear, but it may have been expected that the task of
adjudicating mergers ex ante might be appropriately ceded to the country in which the
merging parties were registered (at least where that comprised a single jurisdiction).
The OECD has expressly warned against this, observing that the analysis of positive comity
has, at times, been obscured by ... use of the term to refer not to the sympathetic
consideration of another countrys request for remedial action, but to any form of positive
(that is, active or beneficial) cooperation: OECD, CLP Report on Positive Comity, above n
11, 5. In this respect it is clear that many of the successes attributed to comity are, in reality,
attributable to cooperation. For example, the EUs approval of Google/DoubleClick Merger
in 2008, which many expected would face obstacles in the EU, despite its unconditional
approval by the FTC, was recently hailed as signalling a greater comity between the US
and EU in relation to merger matters, ('EU Google/DoubleClick Merger Approval a Good
Sign for Comity', RedOrbit News 2005, <http://www.redorbit.com/news/display/?id-1291460>
10 October 2009) but it would seem to have been more a triumph of cooperation rather than
comity.
Chapter6|Page287
This has been said to involve rules of politeness and good manners and, as a
result, has played only a token or symbolic role in cases involving matters of
national interest to the countries involved.23 As these are the cases likely to
evoke the most emotion and lead to the greatest tension between states, the role
of traditional comity in reducing such conflict in relation to transnational mergers
has been limited. In respect of competition law generally, it has frequently been
observed that whenever real conflict exists between countries in relation to
particular conduct or a specific transaction, the authorities will very likely seek to
claim an overriding interest in enforcement and disregard comity. 24
However, despite its limitations as a general principle, negative comity continues
to feature in many bilateral, regional and plurilateral agreements between OECD
countries and in institutional recommendations and best practices. This normally
takes the form of a requirement that one party to the agreement take into
consideration the interests of the other states and that parties notify each other
about matters of mutual interest in enforcement.25
An early example of a bilateral negative comity commitment involved the
Australia/US agreement of 1982,26 which followed tensions generated by the
22
23
24
25
26
OECD, Trade and Competition Policies: Options for a Greater Coherence (2001) 37-38.
See also Martyn Taylor, International Competition Law: A New Dimension for the WTO?
(2006) 110.
Phil Thesis, Queen Mary College of University of London, 2006) 149.
Geradin, Reysen and Henry, above n 2, 11. See further Fox, Evidence to Antitrust
Modernization Commission, above n 6, 7, observint that through all the years in cases in
which the United States had a real antitrust interest at stake, not one US court ever found
that the interest of another nation outweighed the interest of the United States.
For example, the 1995 Recommendation of the OECD includes recommendations about a
countrys consideration of how it may prevent its law enforcement actions from harming
another countrys important interests: OECD, CLP Report on Positive Comity, above n 11,
5, referring to OECD Council, Revised Recommendation of the Council concerning Cooperation between Member Countries on Anticompetitive Practices Affecting International
Trade, 27 July 1995, C(95)130/final, sections I.A.1 and I.B.4.
Agreement between the Government of Australia and the Government of the United States
of America relating to Cooperation on Antitrust Matters [1982] ATS 13 (entered into force 29
June 1982).
Chapter6|Page288
Uranium litigation.27 Like the OECD agreement, it provides essentially for the
notification by each country to the other of policy28 or investigations29 that might
have implications for the other. It also provides for the communication of
concerns and provides a mechanism by which parties can request consultations
where the other commences action (in the case of the US) or adopts a policy (in
the case of Australia) having competition law implications in the other state. The
agreement also requires parties, during consultation, to seek to avoid conflict and
have due regard to each others sovereignty and to considerations of comity. 30
Most bilateral and plurilateral competition agreements continue to incorporate
similar provision for negative comity,31 including the agreements between the US
and EU.32
Although the extent to which states actually take account of the interests of other
countries (especially when it might negatively affect their own significant
interests) is difficult to measure, it is clear that parties now frequently33 and
increasingly34 provide notifications pursuant to these agreements and that this
27
28
29
30
31
32
33
34
See Chapter 5 at 247-248.

Agreement between the Government of Australia and the Government of the United States
of America relating to Cooperation on Antitrust Matters [1982] ATS 13 (entered into force 29
June 1982), article 1(1).
Ibid article 1(2).
Ibid article 2(5).
See Spencer Weber Waller, The Twilight of Comity (2000) 38 Columbia Journal of
Transnational Law 563, 574.
The Agreement between the Government of the United States of America and the European
Communities Regarding the Application of their Competition Laws (23 September 1991)
contains provisions for the notification of competition cases to the extent that they concern
the interests of the other party (Article II) and for each party to take account of the interests
of the other when enforcing its competition rules (Article VI).
See, eg, Campbell and Rowley, above n 14, 327.
European Commission, Report from the Commission to the Council and the European
Parliament on the Application of the Agreements Between the European Communities and
the Government of the United States of America and the Government of Canada Regarding
the Application of their Competition Laws - 1 January 2000 to 31 December 2000 [29
January 2002] COM(2002)45 final, 8 (table 1), which shows a total of 12 merger notifications
in 1991 and 134 in 2000. Part of this increase will also be attributable to the increasing
volume of mergers having transnational implications. See also European Commission,
Report from the Commission to the Council and the European Parliament on the Application
Chapter6|Page289
helps to foster trust and transparency in transnational merger review. It also

appears to be the case that, while courts have been unwilling or unable to
effectively apply comity principles to proceedings before them,35 regulators have
been more inclined to consider foreign interests before investigating or
challenging conduct abroad by foreign nationals that may have produced local
anticompetitive effects.36
While comity considerations will often impose an informal internal discipline on
regulators, at least where matters of national significance do not arise, formal
requests pursuant to negative comity arrangements have been rare. Until 2001
the only cited example of negative comity in competition law arising from a
bilateral competition agreement (and extending beyond mere notification of
matters of interest) was that involving the Boeing/McDonnell Douglas merger.37
In that case the US was asked to consider Europes interest in the merger.38 The
extent to which they did so is unclear, but it did not prevent the FTC clearing the
merger, which subsequently received only conditional approval from the EC,
generating considerable transatlantic tension.
6.4 Positive comity

In contrast to the passive approach of negative comity, positive comity, as the
name suggests, refers to the taking of a positive action in relation to anticompetitive practices that might harm another states interests.39
35
36
37
38
39
of the Agreements between the European Communities and the Government of the United
States of America and the Government of Canada Regarding the Application of their
Competition laws - 1 January 2002 to 31 December 2002 [2003] COM(2003) 500 final, 5.
See, eg, Waller, above n 31, 570. See also Campbell and Rowley, above n 14, 327 and
Fox, Evidence to Antitrust Modernization Commission, above n 6, 7
See Waller, above n 31, 565-567, 578 and Campbell and Rowley, above n 14, 327.
Discussed in Chapter 5 at 263-268.
Edward T Swaine, 'The Local Law of Global Antitrust' (2001) 43 William and Mary Law
Review <http://ssrn.com/abstract=277232> at 22 January 2010, 21.
See Zanettin, above n 10, 119.
Chapter6|Page290
Although the introduction of positive comity into competition law agreements is

often attributed to the 1991 agreement between the EU and the US,40 it has been
a feature of competition agreements for much longer,41 first appearing in the
OECDs 1973 recommendation.42
Although never formally defined,43 positive comity principles involve
(a) giving full and sympathetic consideration to another countrys request that
it open or expand a law enforcement proceeding in order to remedy
conduct that is substantially and adversely affecting another countrys
interests;44 and
(b) taking whatever remedial action it deems appropriate on a voluntary
basis and in considering its legitimate interests.45
Positive comity therefore involves more direct action than negative comity. It
involves a relinquishing of power from one state to another having a greater
connection with the conduct in order to better facilitate investigation,46 to reduce
or eliminate dual investigations and to limit the scope for tension generated by
inconsistent outcomes or the threat thereof.47
40
41
42
43
44
45
46
47
See, eg, Brendan Sweeney, Combating Foreign Anti-competitive Conduct: What Role for
Extraterritorialism? (2007) 8 Melbourne Journal of International Law 35, 37-38.
OECD, Trade and Competition Policies, above n 22, 18. See also OECD, CLP Report on
Positive Comity, above n 11, 2: OECD Members were urged to apply positive comity cooperation principles.
OECD, Trade and Competition Policies, above n 22, 38. See also OECD, CLP Report on
Positive Comity, above n 11, 5, referring to OECD Council, Revised Recommendation of the
Council concerning Co-operation between Member Countries on Anticompetitive Practices
Affecting International Trade, 27 July 1995, C(95)130/final, section I.B.5.
OECD, Trade and Competition Policies, above n 22, 38. This definition also appeared in
Sweeney, Combating Foreign Anti-competitive Conduct, above n 40, 37-38.
See Debra A Valentine, Building a Cooperative Framework for Oversight in Mergers The
Answer to Extraterritorial Issues in Merger Review (1998) 6 George Mason Law Review
525, 530.
Chapter6|Page291
Since the development of the OECDs positive comity framework, positive comity
principles have featured in many binding and non-binding bilateral agreements
among OECD states, most notably between the US and the EU.48 As the
majority of transnational mergers fall for consideration within these jurisdictions,
both of which have the power and resources to actively pursue those mergers
they believe risk harming their markets, it is not surprising that it is conflict
between these jurisdictions that has generated the most tension with respect to
transnational merger review or that it is agreements between them that have
attracted the most interest. Their first competition agreement was concluded in
1991. It was based on OECD Recommendations and was the first bilateral
competition law agreement to include a positive comity provision49 in the form of
a procedure by which either party could invite the other to take appropriate
measures regarding anti-competitive behaviour occurring in their territory
affecting the important interests of the requesting country.50 Although this could,
in theory, apply to mergers, it has never been invoked in a merger case. The
only time it has been invoked was by the US DOJ(AD) in 1997 in relation to a
non-merger case, in response to which the EC opened51 and later settled an
investigation,52 an outcome not generally considered to have been successful,
despite agency rhetoric.53 Principles of positive comity were further developed in
the 1998 bilateral Agreement on the Application of Positive Comity Principles in
the Enforcement of their Competition Laws54 between the EU and US but, in
48
49
50
51
52
53
54
See, eg, OECD, CLP Report on Positive Comity, above n 11, 7 and Braithwaite and Drahos,
above n 9, 189.
Agreement between the Government of the United States of America and the European
Communities Regarding the Application of their Competition Laws (23 September 1991),
Article V. See further European Commission, Report from the Commission 2000, above n
34, 3.
European Commission, Commission opens Procedure against Air France for Favouring
Amadeus Reservation System (Press Release, IP/99/171, 15 March 1999).
European Commission, Commission acts to Prevent Discrimination between Airline
Computer Reservation Systems (Press Release, IP/00/835, 25 July 2000).
Swaine, above n 38, 21, fn 92.
See European Commission, Report from the Commission 2000, above n 34, 3.
Chapter6|Page292
recognition of the practical limitations imposed by strict statutory deadlines for ex

ante merger reviews, that agreement does not extend to mergers.55
As is the case with negative comity, despite the limited formal utilisation of
positive comity provisions, informal positive comity does appear to occur more
frequently through the process of coordinated merger review in which some
authorities have closed their own investigations, satisfied that their concerns will
be adequately addressed by another authoritys proposed remedy.56

It was hoped comity, and particularly positive comity, might provide at least a
partial solution to the problems inherent with concurrent extraterritorial
jurisdiction, in particular by facilitating deferral of the review of transnational
mergers and other anti-competitive conduct to the country having the closest
connection.57
However, those who thought comity could provide a panacea for the
inefficiencies and tensions generated by concurrent jurisdictional claims have
been disappointed by comitys limited practical relevance to mergers.58 Positive
55
56
57
58
Federal Trade Commission (US), 'United States and European Communities Sign
Agreement on "Positive Comity" in Antitrust Enforcement' (Press Release, 4 June 1998).
See also Robert Pitovsky, 'Merger and Competition Policy - The Way Ahead' (Paper
presented at the Toronto, Canada, 4 August 1998), noting that the new agreement did not
cover mergers largely because US and EC merger laws and prenotification rules leave little
discretion to exercise the kind of deference that positive comity implies. Compare, Taylor,
above n 22, 117, fn 18, claiming that success of the US-EU Agreement is illustrated by the
successful co-ordination of numerous cross-border merger investigations since 1998. In
this respect the author appears to be talking about cooperation rather than comity.
ABA Section of Antitrust Law, International Antitrust Cooperation Handbook (2004) 45.
It was originally hoped that this increased focus on positive comity might herald the
possibility of sensible burden-sharing between agencies located in different parts of the
world and that it might allow for a possible competition problem to be dealt with by the
agency best-placed, notably in terms of fact-finding or the possible imposition of sanctions,
to do so: European Commission, Report from the Commission 2000, above n 34, 6.
See especially Sweeney, Combating Foreign Anti-competitive Conduct, above n 40, 41,
observing that positive comity is not a panacea for all international anti-competitive conduct
and that in practice it has only rarely been used. See also Swaine, above n 38, 21 (the
Chapter6|Page293
comity, particularly in the form of jurisdictional deferral, has met with limited
success, in stark contrast to the rhetoric surrounding its promotion.
There are a number of explanations for this.59 First, the often strict regulatory
timetable for the ex ante review of notified mergers makes it impractical in most
cases.60 This is recognised by the OECD which observes, in the context of the
US/EU Agreements, that the statutory timetables that the EC and the US face
would make it very difficult for them to use positive comity in merger cases.61
This was also the express reason for the exclusion of merger review from the
1998 Positive Comity agreement between the US and the EC, with the FTC
observing that strict statutory deadlines for merger review would not permit
positive comity referrals and, in any event, positive comity would have little to add
given the rapid clearance of mergers not raising competition concerns.62
Second, even if this limitation could be overcome, a single post-notification
review does not eliminate the up-front ex ante notification requirements, which
form a significant portion of the costs associated with the merger review
process.63
59
60
61
62
63
relative rarity to date of formal requests for either traditional [negative] or positive comity is
still quite striking, and seems to have caused some officials to backpedal from rosier
assessments. [footnotes omitted]) and Stephen G Corones, The Treatment of Global
Mergers: An Australian Perspective (2000) 20 Northwestern Journal of International Law
and Business 255, 284.
See, eg, David Snyder, 'Mergers and Acquisitions in the European Community and the
United States: A Movement Toward a Uniform Enforcement Body?' (1997) 29 Law & Policy
in International Business 115, 142.
See fn 55, above.
OECD, CLP Report on Positive Comity, above n 11, fn 43 and at 15: the mandatory and
differing time frames make allocative positive comity [that involving deferral of jurisdiction]
likely to be rare [but] in some circumstances co-operative positive comity [where there is no
deferral] could play a part in efficiently co-ordinating the activities of interested countries.
Federal Trade Commission, 'United States and European Communities Sign Agreement on
"Positive Comity" in Antitrust Enforcement' (Press Release, 4 June 1998).
See chapter 8.
Chapter6|Page294
Third, while the idea of negotiating a lead jurisdiction64 to investigate and

evaluate transnational mergers is intuitively appealing,65 it will not be appropriate
in all cases, even if it was practical. In many cases, whether one nation has a
greater claim of right than another will not be obvious.66 For example, the
country having the most connection with the parties may not be the country most
adversely affected by their conduct, so that the most affected country may have
little confidence that their interests will be given due weight and comity does not
require this.67 It is, therefore, not surprising that countries are not usually willing
to cede their regulatory powers in the field of merger control,68 particularly where
the merger will have significant impact in more than one jurisdiction and the
merger is of national significance to both.69 It is widely recognised that the
expectation that any government would act against its own companies to further
the interests of foreign parties, while a desirable global goal, is not one that is
politically feasible at a domestic level:70
It is not realistic to expect one government to prosecute its citizens solely for the
benefit of another. It is no accident that this has not happened in the past, and it
is unlikely to happen in the future. We should not expect the principle of positive
comity to impact dramatically on the proposition that laws are written and
enforced to protect national interests71
64
65
66
67
68
69
70
71
See, eg, Valentine, above n 47, 527.

Lowe, above n 85, 731-132: Agreed allocations of extraterritorial competence come closest
to the [732] actual resolution of jurisdictional conflicts.
Fox, Evidence to Antitrust Modernization Commission, above n 6, 6
See OECD, CLP Report on Positive Comity, above n 11, 5.
Giannino, above n 23, 15-16.
OECD, CLP Report on Positive Comity, above n 11, 13, quoting Allan Fels, Trade and
Competition in the Asia Pacific Region (Speech delivered at the Economic Society of
th
Australia, 24 Conference of Economists, Adelaide, 28 September 1995) 6 observing that it
is a fact of life that countries tend not to take any action against any [anticompetitive]
conduct that merely affects other countries. See also Snyder, above n 59, 142.
See, eg, Michael A Utton, International Competition Policy: Maintaining Open Markets in the
Global Economy (2006) 87.
James R Atwood, Positive Comity Is It a Positive Step? in Barry Hawk (ed), Annual
Proceedings of the Fordham Corporate Law Institute: International Antitrust Law and Policy
(1993) 79, 87, quoted in Sweeney, Combating Foreign Anti-competitive Conduct, above n
40, 40. See also Ariel Ezrachi, 'Limitations on the Extraterritorial Reach of the European
Merger Regulation' (2001) 22 European Competition Law Review 137, 145, observing that
Chapter6|Page295
In this respect comity is also limited by its voluntary nature,72 which is not suited
to addressing the problems perceived or actual of protectionism where
mergers raise matters of national interest.73 For example, in perhaps the most
cited case of jurisdictional conflict relating to mergers, the GE Honeywell
decision, the then European Court of First Instance74 only referred to comity on
one occasion and rejected it.75
Even where protectionist and timing concerns can be overcome, deference to
one nations laws (even if politically viable) might not result in the optimal global
policy outcome. In a global or at least multi-jurisdictional market, effects
might not be felt evenly in each state. Although ideally regulation should
consider the interests of both consumers and producers in all countries affected
by a proposed merger, it is clear that this ideal is rarely the position taken at a
national level. As already noted, countries will rarely subvert their own national
interests, particularly in relation to high profile merger cases, to a broader global
interest,76 nor can they be expected to do so in most cases. Consequently, a
lead state may block a merger, although it increases global welfare [if] it
decreases domestic welfare,77 resulting in global under-regulation.
72
73
74
75
76
77
the existence of contrasting political and economic interests in this highly sensitive area of
international merger control would deter any national or regional authority from accepting a
one-sided limit to the extent of its jurisdiction.
As to the voluntariness of comity considerations see OECD, CLP Report on Positive Comity,
above n 11, 5.
See Sweeney, Combating Foreign Anti-competitive Conduct, above n 40, 38 and Matthew
Lynn, Birds of Prey Boeing vs Airbus: A Battle for the Skies (1998), 229 as quoted in
William E Kovacic, Transatlantic Turbulence: The Boeing-McDonnell Douglas Merger and
International Competition Policy (2001) 68 Antitrust Law Journal 805, 808, fn 12, observing
that in a clash between continents, people root for the home team; the blinkers of
nationalism come down, blinding the spectators to anything but the virtue of their own side.
General Electric Co v Commission, Case T-210/01 (Court of First Instance, 14 December
2005).
Eleanor M Fox, 'GE/Honeywell: The US Merger that Europe Stopped - A Story of the Politics
of Convergence' in Eleanor M Fox and Daniel A Crane (eds), Antitrust Stories (2007) 331,
351.
See, eg, Ezrachi, above n 71, 140-141.
Chapter6|Page296
Fourth, because of the structural changes brought about by mergers, should the
designated lead jurisdiction clear a merger which adversely affects the market of
a referring jurisdiction, it will be difficult to rectify that change through subsequent
action.78 This is not a difficulty facing other forms of anti-competitive conduct
which are generally assessed ex post; in such cases any challenge to a lead
jurisdictions findings would only serve to delay remedial action for conduct that
has already occurred, rather than prevent anti-competitive structural change.
In addition to the practical limitations, it has been argued that comity is an
inappropriate consideration for domestic judges and/or regulators, with politicians
often asserting that such considerations are more appropriately the domain of
politics and not law.
79
These concerns are, however, overstated. Comity, as a consideration both in

relation to regulatory discretion and in judicial determinations about the validity of
extraterritorial claims, is appropriate in competition law matters. Judges and
regulators in those instances are not asked to make foreign policy decisions, but
rather to assess the impact of taking action (or refraining from taking action) on
the competitive conditions in foreign states and, in some cases, to make a
determination of whether another state might be better placed (perhaps because
of the availability of parties and evidence80) to pursue an action involving conduct
having transnational effect. Where markets are global, this is not an
unreasonable burden for regulators or courts who must in any event consider the
scope of the market and its international effects in order to properly assess the
78
79
80
See Valentine, above n 47, 530 who notes that both the US and the EC operate under very
short deadlines more fundamentally, neither country can risk asking the other to
investigate a merger only to discover later that its consumers and important interests have
not been adequately protected. At that point, it is too late to investigate on ones own, which
is the option that always exists in other types of cases. Unfortunately, the deadlines that
prevent firms from consummating the merger will have passed and the firms assets will be
scrambled.
See, eg, Peter Durack QC, Attorney-General of Australia, Extraterritorial Application of US
Law and US Foreign Policy, Remarks Before the ABA Section of International Law (122
August 1981) as quoted in Griffin, above n 7, 520. See also Griffin, above n 7, 519-520.
See Sweeney, Combating Foreign Anti-competitive Conduct, above n 40, 39.
Chapter6|Page297
domestic impact of the conduct. This balancing exercise is not unlike those
conducted by courts in resolving jurisdictional disputes and is entirely
appropriate, if not altogether effective.
However, despite the appropriateness of comity considerations, particularly in
relation to regulatory intervention into transnational conduct, it is clear that comity
will have only a very limited role to play in reducing the cost burdens associated
with the current regulation of transnational mergers. In this respect, recent claims
that international comity ... must continue to be one of our guiding principles if
our global economy is to function efficiently,81 appear to be overstated, at least in
the context of merger review.82
This is not to deny that comity has any role to play in the regulation of
transnational mergers. For example, the existence of positive comity provisions,
particularly in bilateral agreements, may inspire daily cooperation which might
render it unnecessary to formally activate comity procedures83 and which might
contribute to convergence and other measures which have a cumulative effect in
reducing the likelihood of conflict.84 However, even in this respect it has been
suggested that invocation of comity will only be made where to do so serves
domestic interests.
However, although comity both positive and negative may help to reduce
friction between states in the application of their laws to transnational activity
81
82
83
84
Kolasky, International Comity in Antitrust, above n 1, 1.

See, eg, ICPAC, 'International Competition Policy Advisory Committee to the Attorney
United States, 2000), 238.
OECD, CLP Report on Positive Comity, above n 11, 11-12. See also Sweeney, Combating
Foreign Anti-competitive Conduct, above n 40, 39.
Zanettin, above n 10, 119. See also Sweeney, Combating Foreign Anti-competitive
Conduct, above n 40, 38-39, Giannino, above n 23, 149 and Fox, Extraterritoriality in the
Age of Globalization; Conflict and Comity in the Age of Empagran (2005) 4 Antitrust Report
3, 17-18 (2005) as quoted in Campbell and Rowley, above n 14, 317.
Chapter6|Page298
generally,85 particularly where issues of national interest do not arise, it is clear

that the limitations of comity for ex ante merger review mean that the costs of
overregulation and potential conflicts associated with transnational merger
regulation cannot be solved by comity alone.86
85
86
See George N Addy, 'International Harmonization and Enforcement Cooperation: the

Canadian Experience' (Background paper presented for the Symposium on International
Harmonization of Competition Laws, Taipei, Taiwan, 11-14 March 1994) and Pitofsky,
Merger and Competition Policy, above n 55.
Valentine, above n 47, 530.
Chapter6|Page299
Chapter 7 Beyond Comity: International cooperation

The limits of unilateral enforcement can in principle be reduced by
co-operation, and in fact co-operation among competition authorities
has increased law enforcement effectiveness and decreased
jurisdictional disputes.1
7.1 Introduction
Jurisdictional limits on the unilateral enforcement of competition laws, whether
legal or practical, highlight the need for cooperation when mergers affect the
economic interests of multiple states.2 Considerations of comity can help to
relieve tension through notification and consideration of foreign interests.
However, comity cannot alleviate the cost burden for regulators or firms
associated with the multiple notification and review of transnational mergers.
Even if it could, such an approach may lead to under-regulation in cases where a
single national jurisdiction prevents a merger which might have resulted in a net
increase in global welfare. Partly as a result of deficiencies and limitations of a
comity-based approach, cooperation has become a more useful tool for ensuring
that the evaluation of mergers and other anti-competitive (or potentially
anticompetitive) activity which impacts on multiple jurisdictions is dealt with
efficiently and optimally. 3 This is particularly true in relation to merger review,
which operates on strict timetables and renders active cooperation in the
assessment and management of review timetables much more likely to prove
fruitful in reducing cost burdens than considerations of comity alone.
Cooperation also has the benefit, in many cases, of preventing the situations that
2
3
OECD Committee on Competition Law and Policy, 'CLP Report on Positive Comity' (Report
No DAFFE/CLP(99)/19, May 1999) 4.
Ibid 2.
Damien Geradin, Marc Reysen and David Henry, 'Extraterritoriality, Comity and Cooperation
in EC Competition Law' (Working Paper, July 2008) <http://ssrn.com/abstract=1175003> at
8 October 2009, 18.
Chapter7|Page300
comity principles are designed to ameliorate.4 In one form or another,

cooperation now takes place in relation to nearly all multinational competition law
matters5 and in relation to merger notification and review procedures in particular,
so that, particularly among OECD countries, cooperation in merger review is
increasingly eclipsing comity as the basis of interaction between competition law
agencies. 6
Cooperation between agencies in relation to merger review and competition law
has taken a variety of forms and has ranged from formal treaty arrangements to
informal discussions. Numerically, at least, the majority of formal cooperation
agreements have developed bilaterally and occur most commonly between
countries which have close geographic or political ties, or are at similar stages in
the development of their competition laws. Some of these, such as those
between the EU and the US,7 Canada and the US,8 Canada and the EU9 and
Australia and New Zealand,10 have proven particularly useful at promoting
cooperation and convergence in merger review processes.
In addition to these bilateral endeavours, a number of plurilateral and multilateral
agreements, recommendations and best practices have sought to increase
cooperation and convergence in competition generally and in relation to
5
6
7
10
A Neil Campbell and J William Rowley, 'The Internationalization of Unilateral Conduct Laws Conflict, Comity, Cooperation and/or Convergence?' (2008-2009) 75 Antitrust Law Journal
267, 332.
ABA Section of Antitrust Law, International Antitrust Cooperation Handbook (2004) 1.
Campbell and Rowley, above n 4, 327.
Agreement between the Government of the United States of America and the Government
of Canada Regarding the Application of Their Competition and Deceptive Marketing
Practices Laws (August 1995) and Agreement between the Government of Canada and the
Government of the United States of America on the Application of Positive Comity Principles
to the Enforcement of their Competition Laws (2004).
Agreement between the Government of Canada and the European Communities Regarding
the Application of their Competition Laws (17 June 1999).
Co-operation and Co-ordination Agreement between the Australian Trade Practices
Commission and New Zealand Commerce Commission (1994) and Australian Competition
and Consumer Commission and New Zealand Commerce Commission, Cooperation
Protocol for Merger Review (August 2006).
Chapter7|Page301
multijurisdictional merger review specifically. Most successful have been

developments within the OECD and, more recently, the International Competition
Network (ICN). Related work has been done by the International Chamber of
Commerce (ICC),11 the Merger Streamlining Group,12 the Business and Industry
Advisory Committee to the OECD (BIAC),13 The International League of
Competition Law (LIDC)14 and by a number of prominent academics15 and
government officials16 which have influenced and informed the work of these
organisations and of national laws generally.
Most of the efforts of the OECD and the ICN in relation to transnational mergers
has been in relation to the promotion of procedural convergence of pre-merger
notification, rather than substantive convergence, which has typically been
11
12
13
14
15
16
See, eg, Business and Industry Advisory Committee to the OECD (BIAC) and International
Chamber of Commerce (ICC), 'Recommended Framework for Best Practices in International
Merger Control Procedures' (4 October 2001). See also Jonathan Galloway, Convergence
in International Merger Control (2009) 5(2) The Competition Law Review 179, 182
See Rowley and Wakil, above n 24, 11-12. See also Galloway, above n 11, 182, fn 18,
noting that this group was funded by leading international companies and consisted of
leading antitrust practitioners.
See, eg, BIAC/ICC, above n 11. See also Galloway, above n 11, 182
Formed in 1930 as a Swiss independent scientific association, it consists of national and
regional groups as well as individual members. It has previously called for harmonization of
the forms and documents required for notification of mergers and acquisitions according to a
common model form: see Richard Whish and Diane Wood, Merger Cases in the Real
World A Study of Merger Control Procedures (OECD, 1994) (Whish/Wood Report) 12
and 117-199.
See, eg, Eleanor M Fox and Janusz A Ordover, 'Internationalising Competition Law to Limit
Parochial State and Private Action: Moving Towards the Vision of World Welfare' (1996) 24
International Business Lawyer 458, Eleanor M Fox, 'International Antitrust: Against Minimum
Rules; for Cosmopolitan Principles' (1998) XLIII Antitrust Bulletin 5, Eleanor Fox, 'Antitrust
Regulation across National Borders: The United States of Boeing versus the European
Union of Airbus' (1998) 16 Brookings Review 30, Eleanor M Fox, 'Linked-In: Antitrust and
the Virtues of a Virtual Network' (2009) 43 International Lawyer 151, Debra A Valentine,,
'Building a Cooperative Framework for Oversight in Mergers - The Answer to Extraterritorial
Issues in Merger Review' (1998) 6 George Mason Law Review 525 and ICPAC,
'International Competition Policy Advisory Committee to the Attorney General and Assistant
Attorney General for Antitrust - Final Report' (Department of Justice, United States, 2000).
For example, Sir Leon Brittan, the former European Commissioner for Competition, Dr
Wolfgang Kartte, the former Director of the German Federal Cartel Office (BKartA), and
James Rill, the former Assistant Attorney General for Antitrust in the United States, have all
proposed various mechanisms for the increasing harmonization of antitrust procedures:
Whish/Wood Report, above n 14, 12.
Chapter7|Page302
viewed as more difficult,17 and requires a greater degree of philosophical

convergence. However, in recent years, as competition law philosophies have
increasingly aligned, the ICN has also sought to promote greater substantive
convergence in relation to merger regulation.
Other forums have, to date, proven less successful at enhancing cooperation and
convergence in merger law and procedure and thereby eliminating or reducing
cost burdens. Several attempts to add international competition issues to the
WTO agenda have failed.18 The United Nations, through UNCTAD, has
demonstrated a greater willingness to involve itself in competition law matters,
culminating in the adoption of the Model Law on Competition in 2004.19 This
Model Law is, however, directed toward developing nations and provides limited
scope for the convergence of existing merger laws or reductions in transaction
and review costs. APEC has also provided a valuable forum for the evaluation of
member regimes and is a useful tool in promoting discussion and transparency of
competition law regimes,20 but does not make any recommendations or conclude
any related agreements for adherence by member states, so its role in reducing
the regulatory burden of ex ante merger review is limited.
In addition to formal cooperation agreements, it is clear that informal cooperation
occurs on a regular basis.21 This may involve bilateral meeting and technical
assistance visits, informal discussions or staff-to-staff communications.22
17
18
19
20
21
See Galloway, above n 11, 182

This will be discussed further in chapter 9.
UNCTAC, Model Law on Competition (TD/RBP/Conf.5/7/Rev.2, UNCTAD 2004). This has
since been updated: UNCTAD, Model Law on Competition: Substantive Elements for a
Competition Law Including Commentaries and Alternative Approaches
(TD/RBP/CONF.5/7/Rev.3, UNCTAD, 2007).
See A Douglas Melamed, International Cooperation in Competition Law and Policy: What
can be Achieved at the Bilateral, Regional, and Multilateral Levels (1999) Journal of
International Economic Law 423, 429.
ABA Section of Antitrust Law, International Antitrust Cooperation Handbook, above n 5, 4, fn
8. See also Robert Pitofsky, 'Competition Policy in a Global Economy - Today and
Tomorrow' (Speech delivered at the European Institute's Eighth Annual Transatlantic
Seminar on Trade and Investment, Washington DC, 4 November 1998). See also US-EU
Chapter7|Page303
This chapter will first review the nature and scope of existing bilateral and
trilateral competition law agreements and their role in promoting cooperation and
convergence in relation to the review of transnational mergers. It will then
consider in more detail the work of the OECD and ICN in relation to cooperation
and convergence in merger law and procedure. In this respect it does not seek
to cover the field of organisations and local or regional endeavours relating to
cooperation, but to examine in detail only those that are currently most relevant.
7.2 Bilateral and Trilateral competition law agreements

Most formal agreements relating to cooperation in merger review have been
bilateral23 and have spanned the full breadth of competition law matters, rather
than having any specific focus on the merger review process, although more
recently some targeted bilateral merger agreements in the form of bilateral best
practices have emerged to address issues unique to ex ante merger review.24
Bilateral agreements may take the form of hard law binding treaties between
governments or, more commonly, soft law non-binding agreements or best
practices between agencies.25
The current web of bilateral agreements has largely stemmed from recognition
that, as markets increase in geographic scope, the unilateral extraterritorial
22
23
24
25
Merger Working Group, Best Practices on Cooperation in Merger Investigations (2002),

noting that a number of these best practices already are routinely employed informally
between the US and EU. See also Sweeney, The Internationalisation of Competition Rules
(2010) 322.
Christine A Varney, 'Our Progress Towards International Convergence' (Paper presented at
and Policy, New York, 24 September 2009) 6.
See, eg, Melamed, above n 20, 425.
For example, that between the EU/US, discussed below.
Note that the use of soft and hard law is sometimes used to describe different things; for
example, Zanettin has used hard law in reference to positive comity agreements which
most would typically describe as soft law agreements because of their non-binding
character: Bruno Zanettin, Cooperation Between Antitrust Agencies at the International
Level (2002). In this thesis the terms have been used to describe non-binding and binding
agreements respectively.
Chapter7|Page304
application of competition laws will invariably lead to increasing levels of conflict

and that cooperative endeavours may help to reduce this risk.26 Early
agreements focussed predominantly on avoiding such conflict, incorporating
negative comity commitments and including some limited mechanisms for
cooperation27 and have succeeded in helping to reduce jurisdictional conflicts
associated with the extraterritorial application of competition laws.28 However,
following greater recognition of the overregulation that can flow from unilateral
approaches to competition law enforcement, recent agreements have developed
to encompass more direct requirements of positive comity and have provided for
deeper commitments to cooperation in the investigation of competition law
conduct.
The modern bilateral agreements most relevant to transnational mergers may be
classified broadly as:29
26
27
28
29
Antitrust Cooperation Agreements (ACAs)
Antitrust Mutual Assistance Agreements (AMAAs)
They were initially developed to avoid conflict resulting from the extraterritorial application of
antitrust laws: see ABA Section of Antitrust Law, International Antitrust Cooperation
Handbook, above n 5, 40.
The first such agreement was between the US and Germany in 1976: see ABA Section of
Antitrust Law, International Antitrust Cooperation Handbook, above n 5, 6-7. Another
example of such an agreement is Agreement between the Government of Australia and the
Government of the United States of America relating to Cooperation on Antitrust Matters
[1982] ATS 13 (entered into force 29 June 1982). This agreement provides for cooperation
in enforcement, provided the action involved does not adversely affect the laws, policies or
national interests of the other (article 5(1)).
Martyn Taylor, International Competition Law: A New Dimension for the WTO? (2006) 107.
These are the classifications adopted by the ABA: ABA Section of Antitrust Law,
International Antitrust Cooperation Handbook, above n 5, 24, fn 4. The ABA also identifies
(at 8) Extradition Treaties and Mutual Legal Assistance Treaties (MLATs) which are
designed to enable access for foreign located evidence and, because they are treaties,
constitute hard law which will displace local law in cases of conflict. However, they apply
only to criminal law matters (see page 9) and as a result are not relevant to merger review.
Note that others classify competition agreements in different ways. See, for example,
Phil Thesis, Queen Mary College of University of London, 2006), who categorises them into
first and second generation agreements.
Chapter7|Page305
7.2.1 Antitrust Cooperation Agreements

ACAs are competition-specific agreements negotiated directly between
competition authorities rather than governments. 30 They do not override
domestic law and do not carry the same force of law or degree of obligation as do
treaties 31 and, as a result, are often referred to as soft agreements.
In addition to incorporating requirements of traditional and positive comity, ACAs
facilitate investigation and coordination and are particularly relevant to ex ante
merger review. It is not surprising that they form the bulk of the bilateral
competition law agreements.
In addition to notification of matters of interest and consideration of positive
comity, most ACAs deal predominantly with the sharing of information and the
coordination of investigations; that is, they provide some guidance for procedural
cooperation and convergence rather than for any form of substantive
harmonization.32
In relation to information sharing, most ACAs require agencies to, upon request,
provide information already in their possession and also to provide information
voluntarily,33 subject to domestic restrictions on the disclosure of information,
including confidentiality restrictions. Some go further and recommend that
agencies actively seek confidentiality waivers from parties in order to facilitate
greater information sharing.34 This ability to share confidential information is
particularly important in relation to merger investigations which involve
commercially sensitive information, but which require discussions of that
30
31
32
33
34
See ABA Section of Antitrust Law, International Antitrust Cooperation Handbook, above n 5,
7
See ibid 6 fn 11.
An exception is Australia and New Zealand ACA.
6 and 39.
40.
Chapter7|Page306
information between agencies in order for the most useful cooperative measures
to be implemented both for the benefit of parties and agencies. It is
predominantly for this reason that parties frequently provide such waivers in
merger cases.35 Although less relevant to merger analysis, some ACAs also
commit regulators to assist in locating and securing evidence and voluntary
compliance. 36
In relation to coordination, many ACAs, while not committing signatories to
coordinate each transnational investigation, set out criteria to consider when
determining whether coordination of an investigations should occur, including:
(1) whether the enforcement objectives of both parties can be met, (2) the relative
abilities of each party to obtain information necessary to conduct an investigation,
(3) the extent to which each party may obtain relief against anticompetitive
activities, and (4) the costs and benefits to the person subject to the enforcement
activities of each party.37
There is considerable scope for the coordination of ex ante merger review and
bilateral agreements incorporating such recommendations can provide a useful
catalyst and framework for such cooperation. The most famous38 and most
frequently utilised ACA in relation to transnational mergers is that between the
US and the EU.39 The purpose of this agreement is to promote coordination and
lessen the possibility or impact of differences between the parties in the
application of their competition law.40 The agreement is divided into the following
key areas:
35
36
37
38
39
40
See further discussion in chapter 9.

ABA Section of Antitrust Law, International Antitrust Cooperation Handbook, above n 5, 41.
Ibid 42.
Conclusion of this agreement has been described as a landmark in the history of antitrust
policy: Zanettin, above n 25, 279.
Communities Regarding the Application of their Competition Laws (23 September 1991).
Article I.
Chapter7|Page307
Notification41
Exchanges of information42
Cooperation and coordination in enforcement activities43
Cooperation regarding anticompetitive activities in the territory of one

party that adversely affect the interests of the other party44
Avoidance of conflict45
Consultation46
Confidentiality of information47
The agreement provides for traditional comity,48 including notification of mergers

required to be reported to the competition agencies49 and consideration of the
interests of the other party,50 and for positive comity.51 In addition, it provides for
41
42
43
44
45
46
47
48
49
50
Article II.
Article III.
Article IV.
Article V.
Article VI.
Article VII.
Article VIII.
Article II.
Article II(3).
Article V.
Chapter7|Page308
further cooperation and coordination of enforcement actions, particularly in the

form of information sharing and enforcement assistance. In relation to the
exchange of information, it requires officials from the respective competition
authorities meet at least twice a year to exchange information on current activity,
on economic sectors of common interest and to discuss policy changes being
considered and other matters of mutual interest. It further requires that each
party provide the other with any significant information that comes to its attention
about anticompetitive activities relevant to the other agency. This information
should be shared both voluntarily and upon specific request of the other party52
and in all cases will be subject to confidentiality and legal restrictions on the
disclosure of that information.53
In addition to information exchange, the agreement requires each party to render
assistance to the other in enforcement activities to the extent compatible with
law and important interests and within its resources. 54 Where both parties have
an interest in the same activity they may agree to coordinate their activities,
taking into account a variety of factors, including possible cost savings to the
parties involved.55
51
52
53
54
55
Article V.
Article III.
Article VIII.
Article IV(1).
Article IV(2)
Chapter7|Page309
In addition to the 1991 ACA, the EC and the US have formulated an

Administrative Arrangement on Attendance (AAA),56 providing for administrative
arrangements between the respective competition authorities allowing for
reciprocal attendance at certain stages of the procedures in individual cases,57
including in relation to ex ante merger review.58
The EU and US have also established a Merger Working Group (US-EU Working
Group) having the principal objective of enhancing transatlantic cooperation in
the control of global mergers.59 This US-EU Working Group has developed a set
of best practices on cooperation in merger investigations (US-EU Best
Practices)60 which is designed to reduce the risk of divergent outcomes, facilitate
compatible remedies, enhance the efficiency of investigations, reduce burdens on
merging parties and on third parties and increase transparency. 61
These best practices place particular emphasis on the importance of coordination
of investigation timetables62 including, where appropriate, providing merging
56
57
58
59
60
61
62
This arrangement was signed in 1999. See ABA Section of Antitrust Law, International
Antitrust Cooperation Handbook, above n 5, 42.
Geradin, Resen and Henry, above n 3, 15, referring to European Commission, Report from
the Commission to the Council and the European Parliament on the application of the
agreements between the European Communities and the Government of the United States
of America and the Government of Canada Regarding the Application of their Competition
laws - 1 January 2002 to 31 December 2002 [2003] COM(2003) 500 final.
This is reinforced by the US-EU Merger Working Group, Best Practices on Cooperation in
Merger Investigations (October 2002) para 13.
Geradin, Resen and Henry, above n 3, 15, referring to the European Commission, Report
from the Commission, above n 57. See also US-EU Merger Working Group, Best Practices
on Cooperation in Merger Investigations (2002) para 13.
US-EU Merger Working Group, Best Practices on Cooperation in Merger Investigations
(October 2002).
Ibid para 2. See also Geradin, Resen and Henry, above n 3, 15, referring to the European
Commission, Report from the Commission, above n 57. See also Giannino, above n 29,
158.
EU Merger Working Group, Best Practices on Cooperation in Merger Investigations (2002)
paras 3-5.
Chapter7|Page310
parties with the opportunity to confer with the relevant EU and US staffs jointly to
discuss timing issues.63
The US-EU Best Practices also build on the ACAs call for information sharing,
providing that agencies should seek to coordinate with one another throughout
their investigations and keep one another appraised of their progress,64
including through information sharing and regular discussions, subject to
confidentiality restrictions. This includes discussion about market definition,
competitive effects, efficiencies and other matters relating to the substantive
merger analysis.65 Agencies should also, where appropriate, discuss with
merging parties and third parties the possibility of executing confidentiality
waivers to facilitate more effective coordination,66 while making clear that no
prejudice will follow a decision not to provide such a waiver.67
In addition, the agencies should contact one another when learning of a
transaction that appears to require review by each agency68 and, at the start of
any investigation that might benefit from substantial cooperation, each agency
should designate a contact person responsible for setting up a schedule of
conferences between agency staff and to discuss the possibility of coordinating
timetables with merging parties and for coordinating information gathering and
seeking confidentiality waivers.69 In such case efforts should be made to agree
on a tentative timetable for consultation during the course of the investigation. 70
The US-EU Best Practices also provide that where remedies might not always be
identical due to the potential for different effects in the two different markets, to
the extent possible, reviewing agencies should strive to ensure that the remedies
63
64
65
66
67
68
69
70
Ibid para 5.
Ibid para 6.
Ibid.
Ibid para 7-8.
Ibid para 3.
Ibid para 9.
Ibid para 10.
Ibid para 11.
Chapter7|Page311
they accept to do not impose inconsistent obligations upon the merging parties.71
To facilitate this, in appropriate cases they should share draft remedy proposals
or settlement papers upon which they can each make comments.72
These agreements have been utilised frequently73 and the EC has described
cooperation between it and the US agencies pursuant to these agreements as of
considerable benefit, both in avoiding unnecessary conflicts or inconsistencies
between those enforcement activities, and in terms of better understanding each
other's competition policy regimes.74
In particular, information sharing facilitated by these agreements, combined with
voluntary waivers from parties, has been credited with achieving the successful
coordination of most recent transatlantic mergers,75 including the AOL/Time
Warner,76 MCI/WorldCom,77 Boeing/Hughes, AstraZeneca/Novartis and
Metso/Svedala78 and the Oracle/PeopleSoft79 mergers.80 In relation to the
71
72
73
74
75
76
77
78
Ibid para 14.

Ibid para 15.
Giannino, above n 29, 157 fn 39, referring to the remarks of Robert Pitofsky.
European Commission, Report from the Commission, above n 57, 3. In 2002, the last year
in which the EC provided a dedicated report to the European Council on the application of
competition law bilateral agreements, the Commission reported that cooperation between
the Commission and the US agencies, merger cases made up the bulk of notifications under
the agreement (comprising 56 of the 63 notifications made by the Commission in 2002).
Recent Annual Reports indicate that cooperation remains extensive pursuant to these
arrangements: European Commission, Report on Competition Policy 2008 [23 July 2009]
COM(2009) 374 final 28.
See Evidence to Antitrust Modernization Commission, Hearing on International Issues,
Washington DC, 15 February 2006 (revised 2 March 2006) (Eleanor M Fox) 3.
Federal Trade Commission (US), FTC Approves AOL/Time Warner with Conditions:
Competitive Concerns Addressed Through Open Access and Interactive Television
Provisions, DSL Marketing Requirements (Press Release, 14 December 2000) and
European Commission, Commission Gives Conditional Approval to AOL/Time Warner
Merger (Press Release IP/00/1145, 11 October 2000).
Department of Justice (US), Justice Department Clears WorldCom/MCI Merger after MCI
Agrees to Sell its Internet Business: Largest Divestiture of Company in Merger History
(Press Release, 15 July 1998).
See also Federal Trade Commission (US), Federal Trade Commission Clears Combination
of Novartis AGs and Astrazenecas Agricultural Chemical Business: Divestitures to Bayer
AG and Dow Agrosciences Will Ensure Continued Competition (Press Release, 1 November
2000); European Commission, Commission Clears Merger of Agrochemical Businesses of
Chapter7|Page312
WorldCom/MCI merger, confidentiality waivers81 by the parties enabled agencies

to coordinate information requests, meet parties jointly82 and conclude
settlements that met the concerns on both sides.83 As well as minimising
duplication and conflict in relation to information requests, this cooperation
allowed each agency to explore fully, with the benefits of information gathered
through compulsory process, the concerns and tentative conclusions of the other
throughout the investigation, thus reducing the likelihood of inconsistent
conclusions at the end.84
Another highly successful ACA has been that between Australia and New
Zealand. These countries share unique economic, geographic and social
histories that have helped facilitate high levels of cooperation and convergence in
competition law and in other policy areas. In 1983 the Australia/New Zealand
Closer Economics Relations Trade Agreement (ANZCERTA)85 established a free
trade area between Australia and New Zealand (the trans-Tasman market). As
79
80
81
82
83
84
85
AstraZeneca and Novartis, Subject to Substantial Divestitures (Press Release IP/00/844, 26

July 2000); Federal Trade Commission (US), FTC Settlement Preserves Competition in
Global Markets for Rock Processing Equipment (Press Release, 7 September 2001).
European Commission, Commission Clears Oracles Takeover Bid for PeopleSoft (Press
Release IP/04/1312, 26 October 2004). See also Giannino, above n 29, 158-159.
See generally Giannino, above n 29, 157-159, Department of Justice, Justice Department
Clears WorldCom/MCI Merger, above n 77 and Federal Trade Commission (US), Federal
Trade Commission Clears Boeing Cos Acquisition of Hughes Space and Communications:
Transaction Involves Companies Satellite and Launch Vehicle Operations Divisions (Press
Release, 27 September 2000).
See Department of Justice, Justice Department Clears WorldCom/MCI Merger, above n 77:
With the parties' consent, the agencies shared information with one another. See also ABA
Section of Antitrust Law, International Antitrust Cooperation Handbook, above n 5, 43.
Ibid. This included one EC representative moving to the US for several weeks
Eleanor Fox, Evidence to Antitrust Modernization Commission, above n 75, 3. See also
Australia and New Zealand Closer Economics Relations, signed 28 March 1983, [1983] ATS
2 (entered into force 1 January 1983).
Chapter7|Page313
part of the agreement parties were to harmonise national competition laws and
this has occurred to a significant degree.86
In addition, in 1994 the competition agencies entered into a cooperation
agreement87 and in 2006 they entered into a Protocol for Merger Review88
(ACCC/NZCC Protocol) which is designed to minimise procedural conflict, to
reach outcomes based on complete information and, at least where market
effects are substantially the same, to reach non-conflicting outcomes.89
The ACCC/NZCC Protocol is similar in many respects to the EU-US Best
Practices. It recognises that effective cooperation depends significantly on the
cooperation of merging parties90 and that it will be most effective when parties
permit the sharing of confidential information.91 Agencies are therefore
encouraged to seek confidentiality waivers,92 but also to ensure that a decision by
the merging parties not to permit such information sharing should not prejudice
the outcome of the investigation.93 Agencies should notify each other upon
becoming aware of a merger which might affect competition in their market94 and,
where both agencies are likely to review the same transaction, the agencies
should each nominate a contact person and should establish a timeframe for
further contact.95 Agencies might also offer parties the opportunity to confer with
ACCC and NZCC staff jointly to discuss timing and related issues, designed to
synchronise timing of Australian and New Zealand reviews to the extent
86
87
88
89
90
91
92
93
94
95
In relation to mergers, New Zealand has amended its merger legislation to more closely
align with that of Australia: see generally Giannino, above n 29, 165.
Co-operation and Co-ordination Agreement between the Australian Trade Practices
Commission and New Zealand Commerce Commission (1994).
Australian Competition and Consumer Commission and New Zealand Commerce
Commission, Cooperation Protocol for Merger Review (August 2006).
Ibid para 2.
Ibid para 3.
Ibid.
Ibid para 15.
Ibid para 4 and 15.
Ibid paras 7-8.
Ibid para 10.
Chapter7|Page314
permitted by their laws. 96 Evidence from third parties might also be gathered
jointly, or by one party on behalf of them both or the other,97 but the Protocol
does not extend to information obtained compulsorily. 98
The agencies should also liaise throughout the merger review in relation to the
analytical approach being taken, should make contact at appropriate points
during the review and should endeavour to facilitate compatibility of any merger
remedies. These practices are expressed in substantially the same way as the
equivalent practices set out in the US/EU Best Practices agreement.99
Much of the success enjoyed by these countries in relation to the cooperation
and substantial convergence in competition laws is owed to their geographic
proximity, analogous level of economic development and a common culture,100
which may make replication at this level difficult for many other jurisdictions.101
7.2.2 Antitrust Mutual Assistance Agreements

Antitrust Mutual Assistance Agreements are sometimes referred to as second
generation102 agreements because they provide for greater levels of cooperation,
particularly in relation to the exchange of information, than do ACAs.103 AMAAs
96
97
98
99
100
101
102
103
Ibid para 13-14.

Ibid para 18.
Ibid para 20.
Ibid paras 22-28.
See discussion at Giannino, above n 29, 165
See eg Giannino, above n 29. See also Sweeney, Internationalisation of Competition Rules,
above n 21, 279.
7. Note, however, that the reference to generational agreements is not used consistently.
Compare, eg, Giannino, above n 29.
7.
Chapter7|Page315
generally require facilitation by domestic legislation,104 with the result that only
one such agreement has been entered into to date. That agreement is between
Australia and the United States105 and not all of those provisions are applicable to
merger review.106 For example, the Australia-US AMAA explicitly exempts from
disclosure to foreign authorities any information obtained under Clayton Act premerger notification procedures. 107 It does, however, permit information to be
shared if ACPA or FTCA CIDs are used to obtain information from non-party
competitors or customers, or to re-obtain information submitted by the merging
parties pursuant to the HSR Act.108 Information can also be shared pursuant to
this agreement where the parties sign confidentiality waivers, as is now frequently
the case. 109
The Australian-US AMAA also authorises the use of certain compulsory powers
to obtain information on violations of each others competition laws, including the
power to compel testimony or production of documents on behalf of the foreign
party. More generally, the US-Australia AMAA includes commitments regarding
coordination of investigations and notification of enforcement activities, similar to
those found in ACAs.110
104
105
106
107
108
109
110
See ibid 7 and 71. For example, in the United States, the power to enter into such
agreements is provided by the International Antitrust Enforcement Assistance Act 1994, 15
USC 6201-6212.
Agreement Between The Government of the United States of America and the Government
of Australia on Mutual Antitrust Enforcement Assistance (entered into force on 27 April
1999).
chs 4 and 7.
See ibid 52.
See ibid. See International Antitrust Enforcement Assistance Act 1994, 15 USC 6205.
52, fn 29.
See ibid 53.
Chapter7|Page316
7.2.3 UK/France/Germany Common Form (1997-current)

In 1997 the competition authorities of Germany, France and the United Kingdom
adopted a voluntary common filing form.111 The form has, however, rarely been
used.112 There are many explanations for this. First, it is limited in that it is only
available where parties are notifying at least two of the three jurisdictions.113
Second, it does not constitute formal notification in either France or UK114 and it
requires more information that the domestic form in Germany.115 Third, it is no
faster than the existing process116 and, finally, it will not be relevant where the
transaction has a EU dimension, such that it is captured by the EUMR.117
Consequently, there is little incentive for parties to use the common form and as
a result it has had minimal practical impact and all reference to it has been
abandoned in the new UK Office of Fair Tradings Merger Guidelines.118
7.2.4 Current effectiveness of bilateral agreements
Bilateral agreements have provided a valuable tool for facilitating cooperation,
coordination of cases119 and the sharing of ideas about competition law generally
which, at least in relation to those agreements that are regularly invoked, has
helped to stimulate a growing convergence on merger law philosophy, procedure
and analytical approach as well as to reduce conflict between member states. A
111
112
113
114
115
116
117
118
119
J William Rowley, Omar K Wakil and A Neil Campbell, 'Streamlining International Merger
Control' (Speech delivered to the EC Merger Control 10th Anniversary Conference,
Brussels, 14 September 2000) Rowley, Wakil and Campbell, above n 111, 16. See also
William S Dodge, An Economic Defense of Concurrent Antitrust Jurisdiction (2003) 38
Texas International Law Journal 27, 39.
Lise Davey and John K Barker, 'Merger Review Benchmarking Report' (Competition Bureau
(Canada), 2001) chapter 4.
Rowley, Wakil and Campbell, above n 111, 16.
Ibid 17.
Ibid 16.
Ibid.
The form was also adopted prior to the lowering of thresholds for the EUMR.
2009). These replaced the Office of Fair Trading, Mergers Procedural Guidance (OFT526,
May 2003) which refer to the availability of the common form at para 3.26 and 4.30.
Pitofsky, Competition Policy in a Global Economy, above n 21.
Chapter7|Page317
growing convergence in competition between the US and the EU, in particular,

has been facilitated through high levels of transatlantic cooperation, particularly in
relation to merger control120 and, as a result, the overwhelming majority of cases
handled by the US and EC competition authorities have been decided without
conflicts. 121
While bilateral cooperation even where strong will not prevent conflict,122 as
infamously attested to in cases like Boeing/McDonnell Douglas and General
Electric/Honeywell or disagreements, there is no doubt that agreements
encouraging and facilitating greater cooperation can help to reduce them123 and
help to limit any tensions where such conflict and disagreement does occur. For
example, although conflicting opinions between the US DOJ and the EC in
relation to the proposed Oracle/Sun merger124 threatened to strain transatlantic
tensions,125 it is clear that the current dispute was much less hostile than the
earlier Boeing and GE disputes which threatened trade relations between the two
jurisdictions.126
120
121
122
123
124
125
126
Mario Monti Convergence in the EU-US Antitrust Policy Regarding Mergers and
Acquisitions: An EU Perspective (Speech to the UCLA Law First Annual Institute on US and
EU Antitrust Aspects of Mergers and Acquisition, Los Angeles, 28 February 2004) 4.
Giannino, above n 29, 162-163.
See, eg, Giannino, above n 29, 162.
Monti, Convergence in the EU-US Antitrust Policy, above n 120. See also Giannino, above
n 29, 160.
Commissions Decision Regarding the Proposed Transaction Between Oracle and Sun
(Press Release, 9 November 2009) and Sarah Arnott, Transatlantic Row over Oracles Sun
Takeover, The Independent, 11 November 2009.
John Miller and Peppi Kiviniemi, EU Clears Oracle to Buy Sun Microsystems, Wall Street
Journal (Online), 21 January 2010.
See, for example, Editorial, Putting the Sun-Oracle Antitrust Case In Perspective, The Wall
Street Journal, 10 November 2009, observing that yesterdays [DOJ] release is mild
when compared with the last time the DOJ aired its differences with European M&A
regulators . Compare Steve Lohr and James Kanter, Cultural Bent Hangs Over Oracles
Battle for Sun, The New York Times, 11 November 2009. See also Varney, Coordinated
Remedies, above n 126.
Chapter7|Page318
Some such conflicting outcomes might be appropriately attributed to different

market conditions and welfare outcomes within the relevant states127 or might
arise as a result of different assessment of the facts or predictions about future
effects,128 which might occur despite intense cooperation and similar analytical
approach.
For some countries, because transnational mergers most commonly affect their
markets, as is the case with the US and the EU, the level of cooperation and
coordination is now so great that improvement between them may be very
difficult.129 However, despite their many virtues, including the fact that they are
much easier to conclude than are agreements involving multiple parties, bilateral
cooperation alone cannot remove many of the costs associated with multiple
filing requirements for parties, including filing fees and differing filing information
requirements. The agreements themselves are also often more focussed on
cartel prosecution, with merger issues playing only a minor or token role.130 In
addition, the increasing maze131 of relatively incongruent cooperation
agreements,132 while providing scope for improved efficiency in the review
127
128
129
130
131
132
See, eg, Australian Competition and Consumer Commission and New Zealand Commerce
Commission, Cooperation Protocol for Merger Review (August 2006) para 2, which
observes that competition effects relevant to merger analysis on each side of the Tasman
may differ depending on the merger transaction and the relevant markets in question .
See further chapter 5 at 274.
See Giannino, above n 29, 162 and Pitofsky, Competition Policy in a Global Economy,
above n 21.
See Robert Pitofsky, 'EU and US Approaches to International Merger - Views from the US
Federal Trade Commission' (Paper presented at the EC Merger Control 10th Anniversary
Conference, Brussels, 14-15 September 2000). See also Giannino, above n 29, 160.
See, eg, Oliver Budzinski, Towards an International Governance of Transborder Mergers?
Competition Networks and Institutions Between Centralism and Decentralism (2003) 36
New York University Journal of International Law and Policy 1, 8.
xiii.
See Budzinski, above n 130, 8.
Chapter7|Page319
process, particularly for the authorities involved, also adds a layer of legal
material with which business and legal advisors must familiarise themselves. 133
7.3 Plurilateral and Multilateral endeavours

In the past two decades various proposals have been put forward for both the
procedural and substantive harmonisation of multijurisdictional merger review.134
The focus, at least at government level, has been on limited soft (non-binding)
harmonization through best practice recommendations or increased cooperation
between nations. Calls for more substantive action, such as establishing
common filing forms for transnational mergers or the negotiation of a hard law
multi-lateral treaty governing the regulation of such mergers have been ignored
or rejected.
Leaving to one side the EU, which has achieved nearly full harmonization in
relation to transnational mergers having an EU dimension,135 the key forums for
133
134
135
xiii.
See Whish/Wood Report, above n 14, 12 for a discussion of some of the earlier proposals.
The authors note that as early as 1992 the International League for Competition Law, via a
report prepared by Bellamy and Roth, called for the harmonization of the forms and
documents required for notification of mergers and acquisitions according to a common
model form with a view to greater efficiency of procedures and a reduction of transaction
costs, and that in the same year the Special Committee on International Antitrust of the
Section of Antitrust Law of the American Bar Association recommended greater procedural
harmonization for merger enforcement . Shortly thereafter the OECD engaged
Professors Richard Whish and Dianne Wood to prepare a report on merger control
procedures; the report provided some examples of merger cases in the real world and
made recommendations for reform in the international merger review processes (see
Whish/Wood Report, above n 14). The OECD subsequently called for a draft code of best
practices for international merger regulation and the Business and Industry Advisory
Committee to the OECD (BIAC) and the International Chamber of Commerce (ICC) jointly
submitted a Recommended Framework for Best Practices in International Merger Control
Procedures in 2001: BIAC/ICC, above n 11. In 2000 the United States International
Competition Policy Advisory Committee (ICPAC) called for a development of disciplines that
nations could usefully agree upon to guide the review of mergers with significant
transnational or spillover effects: ICPAC Final Report, above n 15, 5.
This is a unique hard-law arrangement and has been considered in the context of the
European Union in chapters 3 and 4. The possibility for similar multi-jurisdiction hard law
arrangements between other OECD states will be considered in chapter 9.
Chapter7|Page320
discussion and progress in relation to transnational merger review have been the
OECD and ICN. Although there have been pushes, from time to time, for the
United Nations and the WTO to play a role in developing a more substantial hard
law agreement relating to international competition law and procedure, these
have, to date, proved unsuccessful. The possibility for future developments
within these organisations will be considered further in chapter 9.
The OECD and the ICN have, however, enjoyed the most significant success in
developing core principles, recommendations and best practices to govern
transnational merger review and these developments have had a demonstrable
effect on increasing convergence of core principles between merger regimes in
different jurisdictions and, in particular, in promoting cooperative endeavours.
The OECD has decades of experience in intergovernmental promulgation of
competition law knowledge and ideas and of making recommendations for
cooperation which have influenced OECD states. In this respect, they have
significantly influenced the creation and content of most bilateral agreements
between these countries.136
Unlike the OECD, the ICN comprises a network of competition agencies, rather
than governments, and it is not limited in its membership to particular countries.
This has both advantages, such as its inclusiveness of developing nations with
emerging competition law regimes, and limitations, such as the fact that its
recommendations carry no legal force, have a built in bias toward agency
agendas (rather than those of government or business) and the size of its
growing membership may inhibit efforts toward meaningful agreement into the
future. To date, however, it has proved highly successful. Part of the explanation
for this success stems from the fact that its exclusive focus is on exploring
136
See, eg, Eleanor Fox, Evidence to Antitrust Modernization Commission, above n 75, 3 and
Pitofsky, Competition Policy in a Global Economy, above n 21.
Chapter7|Page321
mechanisms for cooperation and convergence in competition law matters137 and,

while much of its work has drawn from previous endeavours,138 including those of
the OECD, its recommendations have extended beyond any previous
multijurisdictional efforts. Part of this success may also be attributable to
fortunate timing following the greater proliferation of merger regimes in the 1990s
and to advances in economic understanding of competition law issues, or more
generally to the composition of its membership. Regardless of the reasons for its
success, or the likely endurance of that success, there is little doubt about its
current importance in promoting cooperation and convergence in relation to
competition law and policy.
As with bilateral agreements, both the OECD and ICN have focussed on securing
procedural cooperation and convergence.139 The ICN has, however, recently
begun to pursue greater substantive convergence in relation to merger law and
analysis.
7.4 OECD
The OECD has been at the forefront of cooperative endeavours relating to
competition policy since the 1960s and has played a critical role in addressing
divergence among antitrust authorities on the merger front.140 It has issued
recommendations (both general and merger specific) and has commissioned a
number of valuable reports on competition law issues.
137
138
139
140
See Eleanor Fox, Evidence to Antitrust Modernization Commission, above n 75, 3,

observing that the ICN is a ground-up network that focuses on the low-hanging fruit; it
pursues tasks that are capable of achievement and promises to make a difference.
Galloway notes that the ICN appears to have consolidated and clarified the previous best
practice recommendations: Galloway, above n 11, 183.
Galloway, above n 11, 182.
Varney, Our Progress, above n 22, 5.
Chapter7|Page322
7.4.1 Competition Recommendations

For more than 50 years the OECD Council recommendations on cooperation in
competition law matters have provided the framework for cooperation between
OECD member states,141 both directly and indirectly, by informing the content of
bilateral arrangements between those states.142
The latest in a series of OECD recommendations, which have, over time, been
elaborated and progressively refined by the OECDs Competition Committee, is
its 1995 Council recommendation on cooperation.143 While initial
recommendations144 were largely confined to considerations of
traditional/negative comity when applying their competition laws to conduct that
might impact on other states,145 successive recommendations, including the 1995
recommendation, have provided more ambitious recommendations for
cooperation and placed increase emphasis on mergers.146 This appears
inspired, in part, by the success of the US-EU bilateral agreement147 and includes
recommendations that, where two or more member countries take action against
the same anti-competitive practice they should endeavour to co-ordinate their
action insofar as appropriate and practicable148 and that Member countries
should cooperate in the development of measures to deal with anticompetitive
141
142
143
144
145
146
147
148
See OECD Council, Recommendation of the Council Concerning Merger Review, 23 March
2005, C(2005)34/final.
Although separate bilateral agreements are not needed for OECD countries to give effect to
these recommendations, many have concluded such agreements, many of which go beyond
the OECD recommendations: see Zanettin, above n 25, 56 and 77.
C(95)130/final.
For example the OECD Council, Recommendation of the Council Concerning Cooperation
between Member Countries on Restrictive Business Practices Affecting International Trade,
5 October 1967, C(67)53/final.
See, eg, Zanettin, above n 25, 54.
See ibid 55.
See ibid 56.
C(95)130/final, Recommendation I.A.2.
Chapter7|Page323
practices in international trade, including information sharing, as far as permitted

by domestic laws.149 These recommendations have been incorporated into many
recent bilateral agreements between Member countries.
7.4.2 Merger recommendations
The OECD competition law recommendations encouraging cooperation and
convergence in relation to competition laws have been broad in scope, relating to
competition laws generally, rather than merger law and procedure specifically,
and many of these agreements are restricted in their application to merger review
both because of practical time constraints and because of confidentiality
restrictions. However, in relatively recent years, the OECD has committed time
and resources to studying the costs of multijurisdictional merger review.
Whish/Wood Report 1994
In 1991 the OECD Competition Law and Policy Committee commissioned a study
of the cost of transnational merger review resulting from the proliferation of
merger control regimes, culminating in the 1994 Whish/Wood Report.150 The
terms of reference for the study included reviewing procedures employed by the
Member countries with respect to the pre-merger review and regulatory approval
of mergers,151 identifying areas of procedural differences that impede
cooperation and add unnecessary regulatory costs 152 and identifying
areas of procedural convergence and cooperation consistent with regulatory
goals of Member states.153
149
150
151
152
153

C(95)130/final, Recommendation I.A.3.
Whish/Wood Report, above n 14.
Ibid 9, Term of Reference i.
Ibid, Term of Reference ii.
Ibid, Term of Reference iii.
Chapter7|Page324
The Whish/Wood Report made recommendations for increased cooperation on

the procedural aspects of merger review. It concluded that improved cooperation
in the area of co-ordination timetables, a cooperative approach to remedies and
the ability to discuss issues such as relevant market or method of analysis154
would result in significant benefit to the enforcement authorities.155 On the other
hand, procedural cooperation in other areas, such as general exchanges of files
between agencies, would not materially assist agencies,156 although, subject to
confidentiality restrictions, more targeted information exchanges could be
useful.157
The Report further concluded that the business community would benefit from
greater process convergence and inter-agency co-operation,158 including
common review timetables and more effective application of comity principles159
(especially with respect to remedies), reduction in duplication of information
requirements and improved transparency.160 While acknowledging that there
were inherent limits on the benefits of increased procedural cooperation as long
as substantive laws continued to diverge, the authors concluded that improved
co-operation will help the natural evolution toward a common understanding of
competition law issues161 and substantive convergence. Subsequent
developments confirm the accuracy of these predictions.
154
155
156
157
158
159
160
161
Ibid 14.
Ibid.
Ibid.
Ibid.
Ibid.
Ibid 15.
Ibid 14-15.
Ibid 15.
Chapter7|Page325
From these conclusions the authors made the following recommendations:
There should be increased general cooperation through expansion of the

1986 OECD Recommendation and encouraging negotiation of further
bilateral and multilateral agreements;162
That in some cases waiver by the parties of their confidentiality rights

may be beneficial and could be encouraged;163
That greater clarity is required as to the information that agencies will

regard as confidential and that which will not;164
that notifying parties should be required, at the time of notification, to

indicate whether they have also notified any other agency and to provide
information of any subsequent notification;165
that information that is already in the public domain should be more

efficiently distributed;166
that one or two model filing forms should be developed and should
request common information in a single format and use different country
annexes as appropriate;167 and
that benefits would flow to the private sector from aligning notification
requirements.168
Despite a positive reception, active implementation was initially limited,169 but

many of these recommendations now form part of current bilateral and
multilateral cooperation efforts.
162
163
164
165
166
167
168
169
Ibid 15, Recommendation 1.

Ibid, Recommendation 2.
Ibid 16, Recommendation 6.
The report, did, however, provide a catalyst for the adoption of the OECDs 1995
Recommendation. See Zanettin, above n 25, 55.
Chapter7|Page326
Report on Notification of Transnational Mergers 1999

In 1999 the OECD Committee on Competition Law and Policy prepared and
adopted the Report on Notification of Transnational Mergers170 which
incorporated a common filing form template171 as had been recommended in the
Wood/Whish Report. The template did not receive endorsement by the OECD
Council172 and it has not been adopted by Member countries.173 In relation to
merger filings, the report observed that, while there was a common core of
information requirements to be reported in most countries having notification
requirements, countries specify the information to be produced in different forms
or quantities174 and this inconsistency could interfere with the efficient review of
transnational mergers and impose significant transaction costs on the merging
parties.175 The key benefits of harmonising procedural reporting requirements
were described as:
Reducing the transaction costs for the merging parties to the extent
that the parties are able to prepare and present substantially the same
information to the authorities in more than one country;176
Enhancing co-operation among national authorities examining a merger

to the extent that they are reviewing the same or similar information; 177
and
170
171
172
173
174
175
176
OECD, Report on Notification of Transnational Mergers' (Committee on Competition Law

and Policy, DAFFE/CLP(99)2/FINAL, Feb, 1999).
Ibid, Appendix: Framework for a Notification and Report Form for Concentrations. See also
Rowley, Wakil and Campbell, above n 111, 15-16.
See, eg, Rowley, Wakil and Campbell, above n 111, 16, who note that while 28 jurisdictions
(Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Japan, Korea, Mexico, Netherlands, New Zealand, Norway,
Poland, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States, and
the European Union) reached consensus on the form, it has not been endorsed by the
OECD Council.
See, eg, Stephen G Corones, The Treatment of Global Mergers: An Australian Perspective
(2000) 20 Northwestern Journal of International Law and Business 255, 284.
OECD, Report on Notification of Transnational Mergers, above n 170, 2.
Ibid.
Ibid para 4.
Chapter7|Page327
Contributing to enhanced international co-ordination of other aspects of

merger control, such as convergence in waiting period requirements.
Like the Wood/Whish Report, the 1999 Report attributed many of the procedural
notification differences to differences in national laws governing such
notifications, including differences in policy approaches.178
2001 BIAC/ICC Recommendations
Following the release of the 1999 Report, the OECD Competition Law and Policy
Working Party No 3 requested a draft code of best practices for international
merger control procedures.179 In 2001, the Business and Industry Advisory
Committee to the OECD (BIAC) and the International Chamber of Commerce
(ICC) jointly submitted a Recommended Framework for Best Practices in
International Merger Control Procedures.180 Their submission expressed
opposition to a formalistic code approach to procedural issues and instead
recommended a framework that set forth specific recommendations on basic
principles, while recognizing the need for discretionary latitude in detailed
implementation.181 It identified the following best practices:182
adoption of clear, objective tests for determining if a transaction is subject

to notification requirements;
elimination of notification requirements for transactions having no

appreciable jurisdictional nexus and adoption of clear de minimis
thresholds;
177
178
179
180
181
182
Ibid.
Ibid para 5.
BIAC/ICC, above n 11, 3.
Ibid.
Ibid para 1.1
Ibid para 1.2. Part 2 of the recommendation provides more detail on each of these
recommendations.
Chapter7|Page328
limitation of notification requirements to those aspects of a transaction

having some jurisdictional nexus or elimination of suspensive effect for
those aspects lacking any such jurisdictional connection;
elimination on unnecessary timing restrictions on the parties ability to file

merger notifications and trigger formal review;
elimination of arbitrary filing deadlines;
adoption of reasonable initial notification requirements, designed to obtain

only that information needed to determine if a more extensive
investigation is required; and
adoption of reasonable deadlines for completion of merger review.
BIAC/ICC also recommended ensuring sufficient safeguards were put in place for
procedural fairness, including transparency, non-discrimination, due process and
the ability for an appeal and also safeguards regarding the exchange of
confidential information.183
These best practices now look very familiar, finding favour with the OECD and,
subsequently (although indirectly184), the ICN, though with some additions and
modifications.
2005 Recommendation on Merger Review
In 2005 the OECD issued a Council recommendation on merger review.185 This
was developed in recognition of the fact that
cooperation and coordination among competition authorities with respect to
mergers of common concern can enhance the efficiency and effectiveness of the
183
184
185
BIAC/ICC, above n 11, 14-18.

Specific reference was not made to these recommendations when drafting ICN best
practices, but the similarities between some of the ICN recommendations and the BIAC/ICC
recommendations suggests that they have influenced the development of the ICN
recommendations.
OECD Council, Recommendation of the Council Concerning Merger Review, 23 March
2005, C(2005)34/final.
Chapter7|Page329
review process, help achieve consistent, or at least non-conflicting, outcomes,

and reduce transaction costs.186
It broadly recommends that merger review be effective, efficient, and timely,187

that rules, policies, practices and procedures be transparent and available to the
public and that procedural fairness is exercised in merger review.
OECD Roundtables
In addition to formal recommendations and commissioned reports, the OECD
conducts regular roundtables involving competition authorities to discuss issues
of shared interest.188 These have included an roundtables on Merger
Remedies,189 on Vertical Mergers,190 Media Mergers,191 Substantive Criteria Used
for the Assessment of Mergers,192 Dynamic Efficiencies in Merger Analysis,193
Portfolio Effects in Conglomerate Mergers,194 Mergers in Financial
Services,195 Merger Review in Emerging High Innovation Markets,196 Failing Firm
186
187
188
189
190
191
192
193
194
195
196

2005, C(2005)34/final.
2005, C(2005)34/final, Recommendation A(1)(1).
OECD Best Practice Roundtables on Competition Policy
<http://www.oecd.org/document/38/0,3343,en_2649_34715_2474918_1_1_1_37463,00.html>
OECD, Merger Remedies (Best Practice Roundtable on Competition Policy,
DAF/COMP(2004)21, 23 December 2004).
OECD, Vertical Mergers (Best Practice Roundtable on Competition Policy,
DAF/COMP(2007)21, 12 November 2007).
OECD, Media Mergers (Best Practice Roundtable on Competition Policy,
DAF/COMP(2003)16, 19 September 2003).
OECD, Substantive Criteria Used in the Assessment of Mergers (Best Practice Roundtable
on Competition Policy, DAFFE/COMP(2003)5, 11 February 2003).
OECD, Dynamic Efficiencies in Merger Analysis, above n 36.
OECD, Portfolio Effects in Conglomerate Mergers (Best Practice Roundtable on
Competition Policy, DAFFE/COMP(2002)5, 24 January 2004).
OECD, Mergers in Financial Services (Best Practice Roundtable on Competition Policy,
DAFFE/CLP(2000)17, 15 September 2000).
OECD, Merger Review in Emerging High Innovation Markets (Best Practice Roundtable on
Competition Policy, DAFFE/COMP(2002)20, 24 January 2003).
Chapter7|Page330
Defence197 and Efficiency Claims in Mergers and Other Horizontal

Agreements.198
The roundtables are not formal recommendations endorsed by Council and
generally have less significant impact, but can provide a forum for the sharing of
ideas which can and has contributed in some way to greater convergence in
merger law and policy.
7.4.3 Analysis of OECD
The composition of the OECD as a formal state-based organisation rather than
one comprised of competition agencies is both a strength and a weakness.
Recommendations made by the Council demand a level of consideration by
government not possible for non-governmental agreements.199 However,
recommendations require the consensus of many countries, which is not always
practical and, consequently, some of the core merger work of the OECD lacks
the official support of the Council, placing it on no firmer footing than
recommendations of other non-governmental agencies.
There can, however, be no doubting the significant role the OECD has played
and continues to play in facilitating the discussion of competition law issues and
of promoting cooperation between agencies.200 In particular, the OECD has been
instrumental in the promotion of cooperation as a way of tackling international
197
198
199
200
OECD, Failing Firm Defence (Best Practice Roundtable on Competition Policy,

OCDE/GD(96)23, 1996).
OECD, Efficiency Claims in Mergers and Other Horizontal Agreements (Best Practice
Roundtable on Competition Policy, OCDE/GD(96)65, 1996).
This is particularly true of recommendations for which the authorities might have a vested
interest, such as, for example, a recommendation by that member countries give
competition authorities power to obtain sufficient information to evaluate competitive effects
of a merger: OECD Council, Recommendation of the Council Concerning Merger Review,
23 March 2005, C(2005)34/final, Recommendation A(1)(1).
See, for example, Maher M Dabbah, The Internationalisation of Antitrust Policy (2003) 253
(the OECDs contributions should be regarded as extremely valuable .... See also United
States, 'Developing Cooperative Relationships - United States' (OECD Working Party No 3
on International Cooperation, 2003) 1.
Chapter7|Page331
competition issues201 demonstrated, at least in part, by the relatively consistent

nature of bilateral agreements between OECD Member countries202 and the
striking similarity that the more recent ICN recommendations bare to earlier
OECD reports and recommendations.203
7.5 International Competition Network

The International Competition Network (ICN) is the most recent and, arguably,204
the most successful205 multilateral endeavour for the promotion and
enhancement of cooperation and convergence in competition law and policy.
Unlike the OECD, its membership is open to all countries and it is composed of
competition agencies206 rather than governments.
The ICN was formed in 2001 following the US International Competition Policy
Advisory Committees207 recommendation for the establishment of a Global
Competition Initiative designed to address differences in national approaches to
competition law that have international consequences.208 Its initial membership
201
202
203
204
205
206
207
208
Zanettin, above n 25, 33.

See United States, above n 200, 3, noting that the 1995 Recommendation has provided the
framework for OECD members to cooperate in the absence of a formal bilateral agreement,
and it has served as a model for bilateral agreements even with countries that are not OECD
members.
See, eg, D Daniel Sokol, 'Monopolists Without Borders: The Institutional Challenge of
International Antitrust in a Gilded Age' (2007) 4 Berkeley Business Law Journal 37, 114.
Although there is little debate on the successes of the ICN, it could be argued that the
OECD (and other forums) did the groundwork for the ICN and as such more appropriately
deserves classification as the most important, if not most successful.
See Sokol, above n 203, 112.
See generally William E Kovacic, Extraterritoriality, Institutions and Convergence in
International Competition Policy (Speech to Annual Meeting of the American Society of
International Law, Washington DC, 5 April 2003) 6, noting that the ICN operates through
working groups consisting of government officials and representatives from academia,
consumer groups, legal societies, and trade associations ..
The Final Report of the Committee devoted two of its six chapters to multijurisdictional
merger review: ICPAC Final Report, above n 15.
ICPAC Final Report, above n 15, 28 and see also chapter 6. The Advisory Committee
further recommended (at 29) that the United States explore the scope for collaborations
among interested governments and international organizations to create a new venue where
government officials, as well as private firms, nongovernmental organizations (NGOs), and
Chapter7|Page332
of 16 has grown to a current membership of 107 competition agencies in 96

jurisdictions.209 The ICN provides a multinational forum for the discussion of all
issues relating to competition policy and enforcement, but the importance which
regulators attach to transnational merger review was highlighted by the placing of
this issue at the forefront of the ICNs agenda for discussion.210 As a result, over
the last decade the ICN has made substantial progress in this area.211 In
particular, the ICN has developed and adopted Eight Guiding Principles for
Merger Notification and Review,212 a set of Recommended Practices for Merger
Notification Procedures213 (Recommended Practices for MNP) and, more
recently, a set of Recommended Practices for Merger Analysis214
(Recommended Practices for MA).
7.5.1 Guiding principles and recommendations
The ICN Mergers Working Group (ICN Working Group) formulated the following
Guiding Principles, which were adopted at the ICNs first annual conference in
2002: sovereignty,215 transparency,216 non-discrimination on the basis of
209
210
211
212
213
214
215
216
others can exchange ideas and work toward common solutions of competition law and
policy problems which would include considering approaches to multinational merger
control that aim to rationalize systems for antitrust merger notification and review.
John Fingleton, 'Introduction to the ICN' in John Davies (ed), Merger Control 2010: The
International Regulation of Mergers and Joint Ventures in 64 jurisdictions Worldwide, Getting
the Deal Through (2009) 401.
ICN, Memorandum on the Establishment and Operation of the International Competition
Network (2001).
ICN, Guiding Principles for Merger Notification and Review (Merger Working Group, 2002).
These principles were adopted at the first annual conference of the ICN in September 2002.
ICN, 'Recommended Practices for Merger Notification Procedures' (Merger Working Group
2002, amended 2003, 2004, 2005, 2006).
ICN, Recommended Practices for Merger Analysis (Merger Working Group 2008, amended
2009).
ICN, Guiding Principles for Merger Notification and Review (Merger Working Group, 2002):
Jurisdictions are sovereign with respect to the application of their own laws to mergers.
In order to foster consistency, predictability, and fairness, the merger review process should
be transparent with respect to the policies, practices, and procedures involved in the review,
the identity of the decision-maker(s), the substantive standard of review, and the bases of
any adverse enforcement decisions on the merits.
Chapter7|Page333
nationality,217 procedural fairness,218 efficient, timely and effective review,219

coordination,220 convergence221 and protection of confidential information.222
These Guiding Principles have provided an appropriate framework for the
development of more substantive moves toward the improvement and
harmonisation of merger laws and procedures. In particular, the seventh guiding
principle, convergence, calls for work toward the convergence of merger
processes toward agreed best practices.
These Guiding Principles have also formed the basis for the development of two
sets of recommended practices relating to mergers. The first set of
recommended practices recognises the cost burden facing parties associated
with multiple filings and seeks to provide a best practice framework for reducing
or eliminating the notification burdens where appropriate. This builds on the work
of other bodies, such as the OECD, in its attempt to rationalise procedural
aspects of multi-jurisdictional merger review. The second set of
217
218
219
220
221
222
In the merger review process, jurisdictions should not discriminate in the application of
competition laws and regulations on the basis of nationality.
Prior to a final adverse decision on the merits, merging parties should be informed of the
competitive concerns that form the basis for the proposed adverse decision and the factual
basis upon which such concerns are based, and should have an opportunity to express their
views in relation to those concerns. Reviewing jurisdictions should provide an opportunity for
review of such decisions before a separate adjudicative body. Third parties that believe they
would be harmed by potential anticompetitive effects of a proposed transaction should be
allowed to express their views in the course of the merger review process.
The merger review process should provide enforcement agencies with information needed
to review the competitive effects of transactions and should not impose unnecessary costs
on transactions. The review of transactions should be conducted, and any resulting
enforcement decision should be made, within a reasonable and determinable time frame.
Jurisdictions reviewing the same transaction should engage in such coordination as would,
without compromising enforcement of domestic laws, enhance the efficiency and
effectiveness of the review process and reduce transaction costs.
Jurisdictions should seek convergence of merger review processes toward agreed best
practices.
The merger review process should provide for the protection of confidential information.
Chapter7|Page334
recommendations is targeted at substantive merger analysis, with the intention of

ensuring a consistent and economics-based approach is taken by competition
authorities to merger analysis, thereby increasing consistency and reducing
likelihood of conflict.
7.5.2 Recommended Practices for Merger Notification Procedures
The Recommended Practices for MNP were first adopted in 2002 and aim to limit
the burden partys face when the economic impact of their merger is felt in
multiple jurisdictions. The recommendations,223 developed and expanded
between 2002-2005, are grouped into thirteen key areas:
I.
Nexus to reviewing jurisdiction;224
II.
Notification thresholds;225
III.
Timing of notification;226
IV.
Review periods;227
V.
Requirements for initial notification;228
VI.
Conduct of merger investigations;229
VII.
Procedural Fairness;230
VIII.
Transparency;231
223
224
225
226
227
228
229
230
These are reproduced in full in Appendix 2.

2002, amended 2003, 2004, 2005, 2006), recommendation I.
2002, amended 2003, 2004, 2005, 2006), recommendation II.
2002, amended 2003, 2004, 2005, 2006), recommendation III.
2002, amended 2003, 2004, 2005, 2006), recommendation IV.
2002, amended 2003, 2004, 2005, 2006), recommendation V.
2002, amended 2003, 2004, 2005, 2006), recommendation VI (originally recommendation
VIII). Note that following the 2004 ICN Conference, the recommended practices were reordered, so tht this recommendation became recommendation VI.
2002, amended 2003, 2004, 2005, 2006) recommendation VII.
Chapter7|Page335
IX.
Confidentiality;232
X.
Interagency Coordination;233
XI.
Remedies;
XII.
Competition Agency Powers;
XIII.
Review of merger control provisions.234
The first three of these recommendations were presented and officially adopted
at the first conference of the ICN in Italy, September 2002;235 recommendations
IV, V and XIII were adopted at the ICNs second conference in Mexico in 2003,236
recommendations VI, VII, IX and X were adopted at the third conference of the
ICN held in Korea in April 2004 and recommendations XI and XII were added at
its fourth conference in Germany in June 2005.237
Jurisdictional nexus
The first recommendation concerns the nexus to the reviewing jurisdiction. This
relates to the ICNs guiding principle of sovereignty and, while observing that
jurisdictions are sovereign in relation to the application of their merger laws, the
recommendation calls for jurisdictions to ensure they apply an appropriate local
nexus requirement, sufficient to eliminate transactions unlikely to have any
231
232
233
234
235
236
237
2002, amended 2003, 2004, 2005, 2006), recommendation VIII (originally recommendation
VI).
2002, amended 2003, 2004, 2005, 2006), recommendation IX.
2002, amended 2003, 2004, 2005, 2006), recommendation X.
2002, amended 2003, 2004, 2005, 2006), recommendation XI (originally VII, then XI (2004)
then XIII (2005)).
See Eleanor M Fox, A Report on the First Annual Conference of the International
Competition Network (International Competition Network, 2002) 10.
See Eleanor M Fox and Merit E Janow, A Report of the Second Annual Conference of the
International Competition Network (International Competition Network, 2003) 39.
See Simon J Evenett and Michal Gal, A Report on the Third Annual Conference of the
International Competition Network (International Competition Network, 2004).
Chapter7|Page336
significant effect on local competition.238 This is designed to ensure that those

transactions without sufficient nexus to the regulating state are not burdened
unnecessarily by the substantial costs often associated with multi-jurisdictional
notification.
It is arguable that this recommendation adds little or nothing to prevailing theories
of international law which require that there be some jurisdictional or national
connection before domestic laws and regulations are invoked on foreign
parties.239 Nevertheless, given that corporate mergers often involve companies
with assets or dealings in multiple jurisdictions, the technical connection required
by international law may frequently be met despite little or no prospect of a
merger affecting local competition in any appreciable way. As a consequence,
the recommendation goes beyond international law restrictions, if any, on the
exercise of extraterritorial jurisdiction and also restricts the application of laws to
mergers which, while having some national connection, local dealing or
economic effect, do not have a sufficiently strong nexus to merit a costly
investigation.240
This recommendation is, arguably, the most important and forms an essential
element of any harmonised system of international merger notification and review
to avoid or limit overregulation. In addition to the costs incurred by business in
preparing and filing multiple notifications, low thresholds result in booming costs
to many regulators, resulting in a number of jurisdictions adopting for the first
time, or increasing, fees for review of mergers in an endeavour to fund the
system.241 Appropriate thresholds limit the expenditure of public and private
238
239
240
241
Group 2002, amended 2003, 2004, 2005, 2006), recommendation I. See also Galloway,
above n 11, 183.
See Chapter 5
See ICN, Setting Notification Thresholds for Merger Review (Merger Working Group,
Notification and Procedures Subgroup, Report to the ICN Annual Conference, Kyoto, Japan,
April 2008) 4.
For example, Canada introduced fees for pre-merger notification in November 1997: Davey
and Barker, above n 112, 11. See also DTI, Consumer and Competition Policy Directorate,
Chapter7|Page337
resources in connection with the notification and review of mergers that are
unlikely to raise any competition concerns, while minimizing the costs to society
of mergers that have anti-competitive effects but escape review.242
The recommendation may be more potent, however, if it dealt with both overall
thresholds (applicable to both domestic & foreign mergers) and jurisdictional
nexus requirements. Instead it is restricted to the latter. Existing thresholds are
widely considered to be too low in many jurisdictions,243 evidenced in part by the
fact that the vast majority of mergers currently required to be notified, whether
domestic or foreign, pass through the merger clearance processes unscathed.244
In OECD jurisdictions, typically less than 5% of notifiable mergers give rise to
serious concerns for reviewers.245 This figure could and should be
substantially reduced by applying a more accurate threshold, reviewed regularly
to ensure they only capture those mergers likely to be of genuine concern to the
authorities.246 Although a number of countries have made attempts to review
their thresholds in recent years,247 revised thresholds arguably do not go far
242
243
244
245
246
247
Merger Fees: Summary of Responses to the Consultation on Possible Changes to the

System of Charging Firms for the Costs of Merger Control (Report URN05/1036, March
2005).
ICN, Setting Notification Thresholds, above n 240, 4.
For example, in the US more only approximately 2.4% of the thousands of mergers notified
each year receive requests for stage 2 reviews (based on 1998-2001 statistics): John
Davies (ed), Merger Control 2003, Getting the Deal Through (2003), 12. This statistic did
not change significantly after notification thresholds were lowered following
recommendations from the International Competition Policy Advisory Committee: ICPAC
Final Report, above n 15, 159.
Often the figure in OECD countries is above 95%. In their merger benchmarking report the
Canadian Competition Burea note that one of the attributes of an effective merger review
process is for an agency to cast its net widely enough to capture potentially problematic
transactions, [but to] also have a system in place that allows it to quickly identify cases with
competition issues and quickly close those that do not raise concerns: Davey and Barker,
above n 112, 8.
See Malcolm R Pfunder, 'Twenty years of Hart-Scott-Rodino Merger Enforcement: Some
Reflections on, and Modest Proposals for Reform of, the Hart-Scott-Rodino Pre-Merger
Notification Program' (1997) 65 Antitrust Law Journal 905.
See generally ICPAC Final Report, above n 15, 4. See also Davey and Barker, above n
112, 123.
For example, the United States which now auto-reviews for inflation. See also ICN, Setting
Notification Thresholds, above n 240.
Chapter7|Page338
enough given that the proportion of notifiable mergers raising competition

concerns remains decidedly low.
The comments to the recommendations make clear that to comply, notification
should not be required unless the transaction is likely to have a significant, direct
and immediate economic effect within the jurisdiction concerned248 (emphasis
added). As a result, jurisdictional nexus might be easily established in
accordance with this recommendation despite little prospect of a merger having
serious competitive effects. In this respect, the vague terms in which the
recommendation is expressed provide considerable scope for countries to claim
adherence without introducing new or even reviewing existing jurisdictional
thresholds, simply because they impose a separate and significant nexus
requirement. This was exemplified by the US early claimed adherence to the
recommendations despite being widely regarded has having unrealistically low
thresholds for notification.249 The recommendation itself provides no real
guidance as to what constitutes an appropriate threshold.250 While, for reasons
explained below, it is appropriate that no specific financial or other threshold be
set and made applicable to all jurisdictions, more guidance as to what was
intended by appropriate was needed to place genuine pressure on authorities to
248
249
250
2002, amended 2003, 2004, 2005, 2006)
<http://www.internationalcompetitionnetwork.org/uploads/library/doc588.pdf > at 15 January
2010, Recommendation I(C), Comment 1
Particularly in the early 2000s. A survey commissioned by the Merger Streamlining Group
(Comprised of Alcan Inc, British Telecom, Charles River Associates, Compaq Computer
Corporation, General Electric Company, Gldman Sachs International, NERA, Rio Tinto plc
and Vodephone Group and assisted by Janet McDavid, Phillip Proger, Michael Reynolds, J
William Rowley QC and Neil Campbell) concluded that, while none of the 46 respondent
jurisdictions were inconsistent with the first recommendation, 28 were only partially
consistent and only 18 substantially consistent. Most of those surveyed require a local
presence and/or a defined level of sales in or into the jurisdiction in order to establish
jurisdiction and, among those surveyed, worldwide sales alone are almost never sufficient in
themselves to establish jurisdiction: see J William Rowley and A Neil Campbell,
Implementation of the International Competition Networks Recommended Practices for
Merger Notification Procedures: Final Report (2004) 5 Business Law International 110.
The recommendations provide little guidance regarding the material nexus requirements:
Chapter7|Page339
review existing jurisdictional thresholds. The ICN claimed that this lack of
guidance reflected a lack of consensus on when thresholds constituted a
material nexus or how to arrive at such a threshold,251 with most thresholds
having been based largely on guesswork and experimentation with very little
transparency.252 However, the lack of guidance generated considerable
uncertainty and debate about how jurisdictions [could] establish thresholds that
incorporate appropriate material local nexus standards253 and in response to
these concerns, recently released a report on setting appropriate notification
thresholds.254 This was based on survey evidence from recent revisions of
thresholds in some countries which were based on a thorough review of the
existing notification system and empirical testing of different thresholds255 and
generated some useful data from which the ICN could extrapolate broader
principles for determining an appropriate nexus requirement.256 Although they do
not form part of the recommendations, they will assist in their interpretation.
Most significantly, the ICN Threshold Report notes that the appropriate threshold
system might not be achieved by the simple expedient of increasing or lowering
existing financial thresholds in some cases a broader inquiry might be required
if the balance between non-problematic and problematic transactions is
inappropriate.257 This presents some complications, however, when considered
together with the second of the ICNs recommendations which requires
notification thresholds to be determined objectively.
It is too soon to determine what, if any, effect this guidance will have on
members, but there has been no immediate rush by competition agencies to
review their thresholds following its release.
251
252
253
254
255
256
257
Ibid 3, fn 4.
Ibid.
Ibid 2.
Ibid.
Ibid 4, fn 4.
Ibid.
Chapter7|Page340
Despite its limitations, the recommendation appropriately makes clear that

countries should make endeavours to ensure their laws do not unnecessarily
interfere with foreign mergers having little or no impact on their domestic markets
and, to the extent that it might encourage authorities to produce new or revised
jurisdictional nexus requirements for notification, it has the potential to assist in
alleviating the multi-jurisdictional notification burden.
Notification thresholds
The second set of recommendations adopted by the ICN relate to the criteria
upon which notifiability is determined, rather than the level of the thresholds
themselves. In particular, they recommend that notification thresholds be:
clear and understandable258
based on objectively quantifiable criteria;259 and
based on information that is readily accessible to the merging parties.260
These recommendations are sensible and form an essential element of any

serious reform effort. Not surprisingly they have also appeared in previous calls
for convergence in this area.
The requirement that thresholds be clear and understandable is straight-forward
and uncontroversial; while there is scope for argument as to what in fact is clear
and understandable, the sentiment itself is clear.261
258
259
260
261
2002, amended 2003, 2004, 2005, 2006), recommendation II(A). The Working Group
comments that an essential feature of notification thresholds should be clarity and
simplicity: Working Group comment 1 to recommendation II(A).
2002, amended 2003, 2004, 2005, 2006), recommendation II(B).
2002, amended 2003, 2004, 2005, 2006), recommendation II(C).
Others still have very low turnover requirements and others (such as Turkey) are so
ambigious that it is unclear whether 'thresholds apply to the merger parties' local or global
Chapter7|Page341
In terms of objectively quantifiable criteria, the recommendation is designed to

eliminate the use of criteria such as market share262 or an assessment of the
potential effects of the merger, which are inherently subjective.263 While these
might be essential at later stages of an investigation, they are not an appropriate
measure for determining notifiability. Turnover, on the other hand, is a commonly
used determinant which would conform with this recommendation. Comments to
the recommendation also suggest that jurisdictions seek to adopt uniform
definitions or guidelines with respect to commonly used criteria,264 such as
thresholds, to increase consistency.
Finally, the recommendation calls for thresholds to be based on information that
is readily accessible to the merging parties, described in comments as meaning
available to parties in the ordinary course of business,265 subject to the proviso
that it is reasonable to require parties to report their assets by jurisdiction even if
they do not maintain data in that form in the ordinary course of business.266
It is in the interest of all parties concerned that threshold determinants be both
clear and objectively quantifiable so that parties can accurately identify the
jurisdiction or jurisdictions in which they are required to comply with procedural
262
263
264
265
266
assets and/or turnovers'. In many cases a jurisdictional nexus may be very minimal [p5].
This is also consistent with the OECD approach (above) which does not support the use of
market shares for merger notification thresholds: OECD Council, Recommendation of the
Council Concerning Merger Review, 23 March 2005, C(2005)34/final.
2002, amended 2003, 2004, 2005, 2006), recommendation II(C), comment 1. See
discussion in Rowley, Wakil and Campbell, above n 111, 5. See also Galloway, above n 11,
184.
2002, amended 2003, 2004, 2005, 2006), comment 3 to recommendation II(B).
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation II(C).
The Working Group also note that while local currency values are the preferable measure
for determining notification thresholds, they may not be appropriate in all cases, so that
other measures may be adopted provided criteria is clearly defined transparent and
readily accessible: ICN, 'Recommended Practices for Merger Notification Procedures'
(Merger Working Group 2002, amended 2003, 2004, 2005, 2006), comment 3 to
Recommendation II(C).
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notification requirements. A market share based trigger risks a firm breaching

notification laws and facing hefty fines if they define the market (and therefore
their share within it) reasonably, but differently, from the way in which it is defined
by the competition authority.
Similarly, parties would benefit if informational requirements for initial notification
were comprised of readily accessible information, which will usually be sufficient
to determine whether further investigation of a proposal is warranted.
There is, however, a difficulty with applying objective factors to notification
thresholds in that, while more easily determined by the parties, they are not very
effective at predicting whether a transaction might raise competitive concerns267
and invariably cast a very wide net to catch the few transactions that merit a
closer review.268 Despite this recognition, the ICN reiterates the importance of
setting thresholds at a level calculated to minimize the number of transactions
that must be notified that are unlikely to raise competitive concerns, without
allowing transactions that do raise concerns to fall outside the notification
requirement.269 Although market share or concentration tests might better
achieve this, by more accurately predicting likely anti-competitive concerns,270
such an approach, as well as injecting uncertainty into the process, increases
costs in other ways, so that it has been appropriately rejected by most OECD
jurisdictions271 and several have switched from a market share to an objective
threshold basis for their merger notification requirements following the ICN
recommendation.272
267
268
269
270
271
272

Ibid.
Ibid.
Ibid.
Ibid. See further Appendix 1.
ICN, Setting Notification Thresholds, above n 240, 5. Note, Australia is an exception in this
respect. The Australian 2008 Merger Guidlines recommend notification where the merged
firm will have a post-merger market share of greater than 20 per cent of the relevant market:
ACCC, Merger Guidelines 2008 (2008) [7.15]-[7.16]. See also Stephen P King, 'The 2008
Chapter7|Page343
The challenge is, therefore, to set appropriate objective criteria. 273 Such an
approach reduces error costs, which include the costs of notifying and reviewing
notifications with no competition concerns and the costs of anti-competitive
mergers that escape notification requirements274 and, despite the trade-off in
ability to more accurately target problematic transactions, is to be preferred over
an uncertain subjective approach.275
Timing of Notification
Timing of notification is crucial for merging parties and divergent timing
restrictions can easily complicate commercial planning where multiple
notifications are required.276 Different tests are currently employed for
determining when parties may, or must, notify authorities of a proposed
merger,277 although the level of divergence has been reduced in recent years.
While some jurisdictions do not impose any deadlines for notifications, others
impose minimum deadlines based on a variety of tests relating to how far
progressed merger negotiations are (eg good faith intent or first signed
document) and/or maximum deadlines as short as seven days from the signing
of an agreement.278 Until recently, the EU imposed a maximum deadline of only
273
274
275
276
277
278
ACCC Merger Guidelines: How and Why Have They Changed?' (2009) 32 University of New
South Wales Law Journal 263, 264. However, Australia imposes no penalty for failure to
notify and therefore the subjective notification recommendation poses less risk for parties.
While most jurisdictions already apply an objective criteria for purposes of determining
notification, several jurisdictions, such as, Russia, Portugal, Thailand, Taiwan and Brazil,
continue to require analysis of subjective issues either in order to assess notifiability or as
part of the notification requirements. See also For example, some countries require
assessment of subjective criteria such as acquisition of decisive influence, compared with
more traditional objective criteria like the value of shares or assets: OECD, Report on
Notification of Transnational Mergers, above n 170, 3.
Ibid 4, referring to Swedish study of notification thresholds.
See ICN, Setting Notification Thresholds, above n 240, 5.
See Galloway, above n 11, 185.
Group 2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation III(A) and
This is the case in Poland: Act on Protection of Competition and Consumers 2000 (PL), Art
94.4.
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seven days from the conclusion of agreement, announcement of public bid, or

acquisition of control.279 In addition to affecting the ability of parties to file
notifications in multiple jurisdictions concurrently, the short time frames imposed
by some jurisdictions can cause unnecessary strain on parties. Although some
trigger before which notification cannot be made is desirable in order to prevent
premature notifications,280 there is no practical benefit to be derived from setting
a deadline for notification in circumstances where closure is dependent on
clearance. Such deadlines and inconsistencies compound the problem of
multijurisdictional merger review281 without any useful trade-off.
In response to this problem, the third set of ICN recommendations provides that
notifications should be permitted any time after the parties certify a good faith
intent to consummate the proposed transaction282 and that there should be no
maximum283 deadlines imposed on parties required to notify a transaction where
closing is prohibited until the notification has been reviewed. Even where closing
is not prohibited, parties should be allowed a reasonable time to file following a
clearly defined triggering event. This is based on the view that parties wishing to
279
280
281
282
283
This deadline has now been eliminated: Council Regulation (EC) No 139/2004 of 20 January
2004 on the Control of Concentrations Between Undertakings [2004] OJ L 24.
Galloway, above n 11, 185.
2002, amended 2003, 2004, 2005, 2006), comment 4 to recommendation III(A). To further
assist coordination of filing the ICN Working Group has also suggested that standards for
determining when a definitive agreement to merge, or notification trigger, has been reached
should be clearly defined. However, divergence on the definition of trigger events remains.
See Galloway, above n 11, 185.
The removal of maximum deadlines is, perhaps, even more important. A party that files too
early will ordinarily simply have their notification rejected and can re-notify once the trigger
event has occurred. Failure to notify within a maximum deadline, however, can lead to
substantial pecuniary penalties, even where the merger has not occurred and/or will not
contravene substantive law. These deadlines are particularly problematic where multiple
jurisdictions must be notified in a short period of time. Where parties are prohibited from
closing prior to notification, there is little or nothing to be gained from imposing such
deadlines. It will be in the parties best interests to notify as quickly as possible and, if
parties are slow to notify, no harm is suffered by the authorities or the public because the
merger can not proceed until notification does occur.
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merge have an incentive to file quickly after agreement in any event.284 In this
respect, parties have evidenced a preference to withhold closure until clearance
is granted to avoid the possibility of greater penalties (including divestiture) if the
merger is subsequently challenged.
These are all commendable recommendations seeking to correct an area of
significant inconsistency285 and have already helped to facilitate the coordination
of filing in multiple jurisdictions.286
If all recommendations were widely implemented, parties would have the option
of filing in all necessary jurisdictions simultaneously, facilitating the more timely
and consistent review of mergers.
Review Periods
The time taken for review has been frequently cited as the most important
concern facing merging parties,287 even ahead of the quality of the response,
lower fees and less burdensome filing requirements. This is because lengthy
review periods necessarily delay time-sensitive mergers and, as a result, may put
them in jeopardy. The delay caused by review periods is particularly acute where
review takes place in multiple jurisdictions so that a long drawn-out process in
one can effectively delay a transaction for months.
The ICN Working Group has recognised these delays may jeopardise the
consummation of the transaction, have an adverse impact on the merging parties
individual transaction planning efforts and business operations, and may defer
284
285
286
287
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation III(B).
A recent survey found that of 46 ICN members responding, 37% were substantially
consistent with Recommendation III, 54% were only partially consistent and 9% were
inconsistent: Rowley and Campbell, n 61 at 118. See also Fox and Janow, above n 236, 33.
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation III(A).
Davey and Barker, above n 112, 34.
Chapter7|Page346
realisation of any efficiencies arising from the transaction.288 They also

acknowledge the dichotomy that exists between the needs of the agencies to
have sufficient time to investigate mergers where complex legal and economic
issues arise and the needs of the parties to complete time-sensitive mergers
within a reasonable time. Consequently, this is one of the more difficult areas in
which to achieve consensus. In particular, it is unlikely that a formally agreed
maximum time frame applicable to all mergers could be negotiated and, for
various reasons, this may not be desirable.289
The ICN has, therefore, made the modest recommendation that all merger
reviews should be completed within a reasonable period of time and that review
systems should incorporate procedures that provide for expedited review and
clearance of notified transactions that do not raise material competitive
concerns.290
In this respect, it is also recommended that there should be a specified initial
period of review, no longer than six weeks.291 Many jurisdictions already make
provision for an initial phase of investigation aimed at eliminating those mergers
unlikely to raise competition concerns.292 If they were more widely adopted, these
288
289
290
291
292
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation IV(A).
Different substantive law and methods of analysis applied in regulating jurisdictions might
require at least slightly different time frames; variations in resource capabilities might also
necessitate different time frames and there might be special circumstances requiring
flexibility.
2002, amended 2003, 2004, 2005, 2006), recommendations IV(A) and (B).
2002, amended 2003, 2004, 2005, 2006), recommendations IV(C) and (D) and comment 2
to recommendation IV(C).
Group 2002, amended 2003, 2004, 2005, 2006), comments 1 and 2 to recommendation
IV(B). See also ICN, Implementation of the ICN Recommended Practices for Merger
Notification and Review Procedures (April 2005), Annexure B. Currently, most jurisdictions
with initial review periods adopted a time frame of around 30 days: see Appendix 1.
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recommendations would result in a definitive and readily-ascertainable293 initial

review period which could result either in the expedited clearance of harmless
mergers or early notice to parties that their merger will be subjected to more
detailed scrutiny.
For those mergers requiring further scrutiny, the ICN recommends a
determinable time frame for any extended waiting periods.294 While not seeking
to impose a set review period, the ICN Working Group suggests that extended
Stage 2 reviews should be completed or capable of completion within six months
or less following the submission of the initial notification(s) (emphasis added).295
The reference to capable of completion refers predominantly to the interruption
that occurs when information provided is deemed incomplete or further requests
for information are made.296 While there is no formal recommendation relating to
delays caused by agency requests for further information, the ICN Working
Group has stated that agencies should notify parties in a timely fashion297 of any
deficiencies in their submission and provide specific details of any such
deficiency so that parties can promptly correct their filing.298
The ICN Working Group also observed that, in some complex cases, additional
time may be required by the agencies to reach a determination, and that limited
293
294
295
296
297
298
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation IV(C).
2002, amended 2003, 2004, 2005, 2006), recommendations IV(C) and (D).
For example, in Australia the new ACCCs Guidelines for Informal Merger Review (2004) 5
states that the circumstances which will cause the clock to be stopped on merger review
include the provision of incomplete information or the ACCCs need for additional
information from the parties. Canada has also recently added a clock-stopper to their
second stage review.
In this respect, some agencies are required to notify parties within a set deadline of any filing
deficiencies. Others are not subject to any deadlines, so that a deficient filing detected late
in the review process may restart the review clock.
Chapter7|Page348
exceptions should be permitted if such extension might avoid a more protracted,

formal extension of the waiting period and/or an adverse enforcement decision.299
Requirements for initial notification
This set of recommendations focuses on the information required if the threshold
levels for notification have been met. Given that an extremely high percentage of
mergers reviewed are cleared at the initial stages, it is important that the
information burdens at this stage are as small as possible so that no undue
burden is imposed upon parties whose merger poses little or no threat to the
competitive process.
The key Recommendation V(A) in this respect is that authorities should limit
notification requirements to:
information needed to verify that the transaction exceeds jurisdictional thresholds,
to determine whether the transaction raises competitive issues meriting further
investigation, and to take steps necessary to terminate the review of transactions
that do not merit further investigation.300
The ICN Recommendation makes no attempt to specify the type of information

required, but this has been rectified to a degree by a Report on Information
Requirements for Merger Notification, released in June 2009.301
In addition, practices should be implemented to avoid imposing unnecessary
burdens on parties to transactions that do not present material competitive
concerns.302 In this respect, jurisdictions should permit flexibility in the content of
299
300
301
302
2002, amended 2003, 2004, 2005, 2006),, comment 6 to recommendations IV(C);
Recommendation IV(E).
2002, amended 2003, 2004, 2005, 2006), Recommendation V(A). In particular, as the ICN
Working Group commented, the initial notification should elicit the minimum amount of
information necessary to initiate the merger review process..
ICN, 'Information Requirements for Merger Notification' (Merger Working Group, June 2009).
2002, amended 2003, 2004, 2005, 2006), recommendation V(B).
Chapter7|Page349
initial notifications and reviews303 to cater for the diverse range of transactions
likely to be notified. This might be accomplished by, for example, providing
alternative notification formats (such as long and short form options) and
discretionary waivers in relation to information not relevant in a particular case.304
Authorities should also consider accepting information that provides substantially
the information they require, even if not in the precise format requested, where
parties have used an alternative format for submission in other jurisdictions.305 In
addition, they should be able to waive information requirements during premerger consultations where the burden of compiling and submitting the
information would outweigh its value to the agencies.306 Conversely, parties
should be allowed to submit additional information where it may assist in early
resolution.307 Agencies should also provide guidance to parties on notifiability of
transactions and content of a notification where requested by the parties.308
It is also recommended that jurisdictions limit translation requirements and formal
authentication burdens in the initial notification stage.309 While the notification
itself could appropriately be required to be in the official language of the relevant
jurisdiction, supporting documents should not need to be translated in their
entirety summaries and important excerpts should be considered sufficient.
Translation currently imposes a significant time and financial burden for many
303
304
305
306
307
308
309
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation V(B).
2002, amended 2003, 2004, 2005, 2006), comment 2 to recommendation V(C).
2002, amended 2003, 2004, 2005, 2006), recommendation V(C).
2002, amended 2003, 2004, 2005, 2006), recommendation V(D). At least 20 jurisdictions of
the 53 recently examined in an ICN project require all supporting documents to be fully
translated: ICN, Implementation of the ICN Recommended Practices, above n 292,
Annexure B.
Chapter7|Page350
multi-jurisdictional merger notifications310 and this recommendation is valuable

when implemented.
The recommendations are sensible attempts to limit cost associated with merger
notification, particularly for parties whose mergers raise no competition
concerns.311 For those that do raise concerns, they encourage substantial
compliance to be accepted by authorities where this would facilitate parties
submitting the same information to multiple jurisdictions and avoid cosmetic but
expensive formal changes, although it is not apparent that this is occurring at any
significant level.
Current systems requiring limited initial information include Canada,312 Germany,
the US and Norway.313 Short form notifications in some countries are also
directed toward this goal,314 although are less desirable than minimal initial
notification requirements as part of a two-stage process designed to screen out
unproblematic transactions, because they require a determination to be made
and evidence given of qualification for the short form system.315 There are,
however, some systems still heavily criticised as requiring too much up-front
information, notably the EU and, in relation to formal notification, Australia.316
310
311
312
313
314
315
316
See, eg, ICN, 'Report on the Costs and Burdens of Multijurisdictional Merger Review'
(Mergers Working Group, Notification and Procedures Subgroup, November 2004) 18, citing
testimony by Michael Belchman before ICPAC, 3 November 1998, Tr at 54-57, who noted
that the translation requirement [in the US] can be extremely costly for foreign companies,
especially those who typically write all internal documents in their native language. Having
to translate all documents, not just the key documents, is extremely costly.
See, eg, ICN, Setting Notification Thresholds, above n 240, 5.
Note, however, that Canadas merger regime has recently been reviewed and new
notification forms have been developed: see discussion in Canadas New Merger Control
Law (14 January 2010) Competition Law Canada
<http://www.ipvancouverblog.com/2010/01/merger-control-in-canada/> at 22 January 2010.
Ibid.
Ibid fn 11.
See, eg, Poddar, above n 165.
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Transparency
The next key set of recommendations relates to transparency. In particular, it is
recommended that merger laws be applied with a high level of transparency,
particularly with respect to the jurisdictional scope of the merger control law, the
competition agencys decision-making procedures, and the principles and criteria
the competition agency uses to apply the substantive review standard317 and that
they be subject to appropriate confidentiality requirements.318
The ICN Working Group notes that transparency of this nature is important to
achieve consistency, predictability and, ultimately, fairness in applying merger
control laws.319 An important element of transparency is ensuring laws,
regulations, policy and other key materials320 are made available to the public in a
timely manner.321 In this respect, the Working Group envisages not only the
publication of substantive law and procedural requirements,322 but also the issue
of press releases on important decisions, delivering and publishing speeches and
issuing statements signifying any change in enforcement policy, as well as
general guidelines.323
A number of jurisdictions now have such guidelines or other notices providing
parties with information on the procedural and substantive requirements of their
merger regulation324 as well as guidance by way of speeches and other
317
318
319
320
321
322
323
324
ICN, Recommended Practices, n 36, recommendation VIII(B).

ICN, Recommended Practices, n 36, recommendation VIII(A) (originally Recommendation
VI).
ICN, Recommended Practices, n 36, comment 1 to recommendation VIII(A).
See ICN, Recommended Practices, n 36, comment 3 to recommendation VIII(B).
ICN, Recommended Practices, n 36, comment 2 to recommendation VIII(A). This is
expanded on in recommendation VIII(C) which calls for authorities to make available to the
public information relating to the current state of merger control law, policy, and practice.
ICN, Recommended Practices, n 36, comment 1 to recommendation VIII(C).
See further ICN, Recommended Practices, n 36, comment 3 to recommendation VIII(C).
See, eg, ACCC, Merger Guidelines (November 2008), ACCC, Merger Review Process
Guidelines (July 2006), ACCC, Formal Merger Review Process Guidelines (June 2008),
Competition Bureau (Canada), Merger Review Process Guidelines (18 September 2009),
Competition Bureau (Canada), Merger Enforcement Guidelines (2004), Office for the
Chapter7|Page352
publications. In many cases, wider information has been provided in response to

the ICNs recommendations.325 Much of this information is now freely available
online, either through dedicated domestic websites or on the ICNs own website
which hosts information pages and template documents on a large number of
ICN members merger regimes.326
In this respect, recent revisions to merger guidelines have helped to provide a
foundation for discussion among international antitrust agencies regarding the
325
326
Protection of Competition (Czech Republic), Notice of the Office for the Protection of
Competition on the Pre-notification Contacts with Merging Parties (current to 10 June 2009),
Office for the Protection of Competition (Czech Republic), Notice on the Prohibition of
Implementation of Concentrations Prior to the Approval and Exemptions Thereof (current to
10 June 2009), Danish Competition Authority, Executive Order Calculation of Turnover in
the Competition Act (No 895 of 21 September 2000), Danish Competition Authority,
Executive Order on the Notification of Mergers (No 480 of 15 June 2005), European
Commission, Commission Notice on the Definition of Relevant Market for the Purposes of
Community Competition Law [1997] OJ C 372, 5, European Commission, Guidelines on the
Concentrations between Undertakings of 5 February 2004 [2004] OJ C 31, 5-18,
Competition Authority (Ireland), Notice in Respect of Guidelines for Merger Analysis
(Decision No N/02/004, 16 December 2002), Competition Authority (Ireland), Notice in
Respect of the Review of Non-notifiable Mergers and Acquisitions (Decision No N/03/001,
30 September 2003), Competition Authority (Ireland), Revised Procedures for the Review of
Mergers and Acquisitions (February 2006), Fair Trade Commission (Korea), Guideline for
Review M&A (20 December 2007), Competition Board (Turkey), Guidelines on the Voluntary
Notification of Agreements, Concerted Practices and Decisions of Associations of
Undertakings <http://www.rekabet.gov.tr/dosyalar/form/form3.doc> at 20 January 2010,
Competition Board (Turkey), Guidelines on the Definition of Relevant Market
<http://www.rekabet.gov.tr/word/Guidelines_on_the_Definition_of_Relevant_Market.doc> at
20 January 2010, Competition Commission (UK), CC2 Merger References: Competition
Commission Guidelines (June 2003), Competition Commission (UK), CC3 Market
Investigation References: Competition Commission Guidelines (June 2003), Competition
Commission (UK), CC7 - Chairman's Guidance on Disclosure of Information in Merger and
Market Inquiries (July 2003), Competition Commission, CC8 Merger Remedies:
Competition Commission Guidelines (November 2008), Department of Justice and Federal
Trade Commission (US), Antitrust Enforcement Guidelines for International Operations Issued by the US Department of Justice and the Federal Trade Commission (1995) and
Department of Justice and Federal Trade Commission (US), Horizontal Merger Guidelines
(1992, revised 8 April 1997).
See, eg, ACCC, Revised Processes Proposed for Informal Merger Reviews, Press Release
No 208/04 (2004).
The ICNs web page contains a template for more than 60 jurisdictions. In addition, the
Global Competition Forum, established by the International Bar Association, also provides
free online information about the merger laws in numerous jurisdictions: Global Competition
Forum <http://www.globalcompetitionforum.org/>.
Chapter7|Page353
convergence of merger practices more globally327 and have improved

transparency with respect to merger procedures.
In relation to the provision of information on important decisions, the ICN Working
Group recommends that a reasoned explanation be provided for decisions to
challenge, block or condition the clearance of a transaction, and for clearance
decisions that set a precedent or represent a shift in enforcement policy or
practice.328 Currently, few jurisdictions provide detailed explanations for
decisions, other than in cases where mergers are challenged.329 Reasoned
explanations in the circumstances suggested by the ICN Working Group might
prove valuable in establishing a body of precedent to guide parties as to the type
of concerns held by the various agencies. Anything more substantial would
threaten to slow down the entire process and increase the time delays so
abhorred by merging parties.
In the recent past, there was little transparency in the regulation of mergers in
many jurisdictions.330 While this has now improved significantly, there is still clear
scope for improvement.331 These recommendations are relatively innocuous for
agencies and have perhaps the best chance of wide-ranging adherence in the
short term, enabling parties to be better informed, thereby reducing some of the
uncertainty frequently cited as a major source of frustration for the parties.
327
328
329
330
331

ICN, Recommended Practices, n 36, comment 2 to recommendation VIII(C).
Australia is an example of a country in which this does occur and has for some years. See
also Varney, Coordinated Remedies, above n 126, 6.
In 2000, the ICPAC noted the lack of transparency in merger review that existed at the time
and claimed greater transparency would highlight differences, stimulate discussion and
adjustments: ICPAC Final Report, above n 15, 4.
This is clear from a recent ICN investigation of compliance which demonstrated that a
substantial amount of important information was not yet readily available to the public. See
ICN, Implementation of the ICN Recommended Practices, above n 292, 8-13.
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Conduct of Merger Investigations

Merger investigations should be conducted in a manner that promotes an
effective, efficient, transparent and predictable merger review process332 and
should include opportunities for meetings or discussions between the parties and
the authorities. Where a merger investigation proceeds through the initial stages
into a more detailed, second stage inquiry, parties should be advised of why
clearance was not given within the initial review period.333
These recommendations are designed to increase transparency and the early
identification of problematic issues for the parties which may facilitate faster
resolution.334 While these would seem to be largely common sense
recommendations, for those countries which could not currently claim substantial
adherence the recommendations might provide an important catalyst for reform.
It is also recommended that where there are no definitive deadlines relating to
merger investigations, procedures should be adopted to ensure that the
investigation is completed without undue delay and that agencies avoid
imposing unnecessary or unreasonable costs and burdens on merging parties in
connection with merger investigations.335 The key difficulty with these
recommendations is that the terms undue delay and unnecessary or
unreasonable costs and burdens are inherently subjective so that the parties
332
333
334
335
2002, amended 2003, 2004, 2005, 2006), recommendation VI(A).
2002, amended 2003, 2004, 2005, 2006), recommendation VI(C). Where the relevant
jurisdiction has only one phase of investigation, the competition agency should advise the
merging parties of perceived competitive concerns as promptly as possible: comment 1 to
recommendation VI(C). In this respect, see also Varney, Coordinated Remedies, above n
126, 6, who notes that the European Commission and some other agencies issue
statements of objections or similar documents during the course of an investigaiton and
that this assists in avoiding surprises between the competition agencies of the world.
2002, amended 2003, 2004, 2005, 2006), comment 2 to recommendation VI(C).
2002, amended 2003, 2004, 2005, 2006), recommendations VI (D) and (E).
Chapter7|Page355
views on what might be unreasonable may be far removed from those of the
agencies. Nevertheless, the recommendations might bring to light the importance
of focusing on the task of determining whether the merger should be cleared or
challenged, rather than using the notification process as a means of gathering
information for subsequent legal challenges. The ICN Working Group suggests
that requests for information focus on aspects of the transaction that raise
potential competition concerns and parties should be permitted to submit
information in the manner in which they maintain the information in the ordinary
course of their business.336 In this respect, it is also suggested that agencies be
sensitive to the costs associated with full-text translations, should impose
translation requirements only selectively, and should consider ways to reduce the
burden of translations wherever possible.337
Finally, it is recommended that investigations be conducted with due regard for
applicable legal privileges and related confidentiality doctrines and transparent
policies should be put in place for the exchange of such information with other
competition agencies.338
Procedural fairness
This recommendation provides that merging parties and third parties with a
legitimate interest in a proposed merger should be afforded procedural fairness in
the sense that they should be provided with a meaningful opportunity to express
their views.339 Third parties should also be allowed to express their views during
the review process. Procedural fairness should apply equally to domestic and
336
337
338
339
2002, amended 2003, 2004, 2005, 2006), comments 1-2 to recommendation VI(E).
2002, amended 2003, 2004, 2005, 2006), comment 4 to recommendation VI(E).
2002, amended 2003, 2004, 2005, 2006), comment 3 to recommendation VI(F).
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation VII. See also
Evenett and Gal, above n 237, 7.
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foreign firms.340 In addition, prior to an adverse finding, parties should be advised

sufficiently of the competitive concerns held by the agency and have a
meaningful opportunity to respond.341 This might result in amendments
alleviating the competitive concern or the agreed imposition of conditions that
would allow the merger to proceed while addressing the agencys concerns.342
The agency responsible for review should ensure processes are implemented
fairly, efficiently, and consistently.343 Finally, it is recommended that merger
review systems provide an opportunity for timely review by a separate
adjudicative body on the merits within a timeframe which would allow the merger
to remain viable.344
Many OECD countries comply with the first recommendation, but the requirement
for a commercially viable appeal option, is still not satisfied in most countries.345
Confidentiality
It is recommended that information received by authorities from the merging
parties and third parties in relation to the proposed merger should be subject to
appropriate confidentiality protections.346 The need for a certain level of
confidentiality in merger reviews to avoid prejudicing important commercial
340
341
342
343
344
345
346
2002, amended 2003, 2004, 2005, 2006), comments 1-3, recommendation VII(A).
2002, amended 2003, 2004, 2005, 2006), recommendation VII(B).
2002, amended 2003, 2004, 2005, 2006), comment 3 to recommendation VII(B).
2002, amended 2003, 2004, 2005, 2006), recommendation VII(D)
2002, amended 2003, 2004, 2005, 2006), comment 2, recommendation VII(E). This applies
only to adverse findings.
While most countries have judicial review or court appeal processes in place, they can rarely
be considered timely.
2002, amended 2003, 2004, 2005, 2006), recommendation IX(A).
Chapter7|Page357
interests347 has long been recognised and has formed part of most bilateral
competition agreements. Confidentiality rules should balance commercial
interests of the parties with the need to ensure procedural fairness348 and the
public interest and the need for transparency in the review process. Where an
agency determines that certain information will not be granted confidentiality
status, parties should have the opportunity to contest that decision prior to
disclosure of the information. In addition, agencies should avoid unnecessary
public disclosure of confidential information.349
It is also recommended that agencies seek to defer contacts with third parties
until the proposed transaction becomes public where such deferral would not
adversely affect the agencys ability to investigate effectively or completely within
applicable deadlines.350
Protection of confidential information, perhaps because it is often supported by
separate domestic legislation, is one area in which there appears to be
substantial convergence.
Interagency coordination
The recommendation of the ICN relating to merger notification and procedures
deals with interagency coordination; agencies should seek to coordinate their
review of mergers that may raise competitive issues of common concern.351 In
347
348
349
350
351
2002, amended 2003, 2004, 2005, 2006), comment 1 to recommendation IX(A).
2002, amended 2003, 2004, 2005, 2006), comment 2 to recommendation IX(A). See also
recommendation IX(D), which provides that confidentiality rules should strike an appropriate
balance between protecting the confidentiality of third-party submissions and procedural
fairness considerations.
2002, amended 2003, 2004, 2005, 2006), recommendation IX(E).
2002, amended 2003, 2004, 2005, 2006), recommendation IX(C).
2002, amended 2003, 2004, 2005, 2006), recommendation X(A).
Chapter7|Page358
particular, this is designed to reduce conflict and duplication and to avoid

unnecessary delays and burdens for parties and agencies.352 Comments to this
recommendation make clear that any interagency coordination is voluntary and in
no way prejudices the rights of each agency to reach their own independent
decisions.353 Agencies should also encourage and facilitate the parties
cooperation in the coordination process.354 It is also recognised that convergence
towards best practices would assist in the effectiveness of interagency
coordination.355 To a significant degree this is already occurring, at least at a
bilateral level, between members with existing agreements.
Finally, it is recommended that reviewing agencies seek remedies tailored to
cure domestic competitive concerns and seek to avoid inconsistency with the
remedies in other jurisdictions.356 This is a particularly important
recommendation in the context of multi-jurisdictional merger review where there
is the potential for remedies to conflict, causing problems for the parties and
friction between nations.357
Remedies
In 2005 the ICN adopted relatively uncontroversial recommendations relating to
merger remedies. This set of recommendations is directed toward ensuring
remedies are directed toward competitive harm identified, that the process for
352
353
354
355
356
357
2002, amended 2003, 2004, 2005, 2006), comment 2 to recommendation X(A).
2002, amended 2003, 2004, 2005, 2006), recommendation X(D).
2002, amended 2003, 2004, 2005, 2006), recommendation X(E).
The Working Group suggests that competition agencies should invite the merging parties to
consider coordinating and timing the substance of their remedy proposals: ICN,
'Recommended Practices for Merger Notification Procedures' (Merger Working Group 2002,
amended 2003, 2004, 2005, 2006), comment 1 to recommendation X(E). See also Varney,
Coordinated Remedies, above n 126.
Chapter7|Page359
their adoption is transparent and that remedies are effective and easy to
administer.
In relation to the first, it is recommended that remedies address the identified
competitive harm arising from the proposed transaction.358 In particular, a
merger remedy should not have the objective of improving premerger
competition359 and parties should be permitted to propose alternative resolutions
and have them considered by agencies prior to imposition of an outright
prohibition. This is perhaps the most important in the context of multiple filings.
Adoption of a remedy having transnational consequences might effectively
prevent a merger or merger generated efficiencies globally, leading to
overregulation, when a more targeted domestic remedy might be sufficient to
redress likely anti-competitive harm.360
A transparent framework must also be provided for proposal, discussion, and
adoption of remedies.361 In this respect information about procedures for
adopting remedies should be readily available to those involved in the merger
review process, including, for example, how and to whom remedies should be
proposed, the types of remedies that the agency generally prefers and in which
instances, and any standard terms or implementation provisions the remedy
should include.362
Where competitive concerns are identified, parties should be given timely
information about those concerns and have the opportunity to consider and
358
359
360
361
362
2002, amended 2003, 2004, 2005, 2006), recommendation XI (A).
2002, amended 2003, 2004, 2005, 2006), comment 1, recommendation XI (A).
See Varney, Coordinated Remedies, above n 126.
2002, amended 2003, 2004, 2005, 2006), recommendation XI (B)
2002, amended 2003, 2004, 2005, 2006), comment 1, recommendation XI (B).
Chapter7|Page360
propose remedies to address those concerns prior to the final decision.363 Third
parties should also be consulted regarding the appropriateness of a proposed
remedy.364
Finally, procedures and practices should be established to ensure that remedies
are effective and easily administrable. 365 In particular, they should not require
significant administrative intervention by the agency after the transaction is
consummated. 366 In this respect structural remedies are generally to be
preferred over behavioural remedies.367 This is consistent with general practice
in OECD countries. Remedies should also define the parties compliance
requirement clearly and precisely.368 Where the remedy involves divestiture,
characteristics of a suitable buyer and deadlines should be clear,369 and the
remedy should enable the buyer to be a viable and long-term competitor in the
market in which the competitive harm was identified.370 Remedies should also
be required to be implemented in a timely manner371 and appropriate means
should be provided to ensure implementation, monitoring of compliance, and
enforcement of the remedy. 372
363
364
365
366
367
368
369
370
371
372
2002, amended 2003, 2004, 2005, 2006), recommendation XI (C).
2002, amended 2003, 2004, 2005, 2006), comment 1, recommendation XI (C).
2002, amended 2003, 2004, 2005, 2006), recommendation XI (D)
Chapter7|Page361
These recommendations are appropriate, and largely uncontroversial,373

reflecting existing best practice among OECD states. Where multiple agencies
pursue an enforcement action with regard to the same conduct, substantial
divergence in remedial approach risks inconsistent results that may undermine
one or more jurisdictions enforcement, and may also frustrate a firms good faith
efforts to comply with ordered relief. 374 Consequently, coordination of merger
remedies, in particular, may significantly decrease costs of compliance.375
Competition Agency Powers
The most recent set of recommendations adopted by the ICN relates to the
powers of competition agencies to enforce merger laws. Recommendation XII
provides that competition agencies should have the authority and tools
necessary for effective enforcement of applicable merger review laws,376
including the ability to initiate enforcement actions and to seek sanctions for
non-compliance,377 should have sufficient staffing and expertise to discharge
their enforcement responsibilities effectively378 and should have sufficient
independence to ensure the objective application and enforcement of merger
review laws. 379
Most, if not all, of these recommendations, reflect current practice in OECD
states and appear directed at developing competition regimes. There is also a
natural self-interest involved in a network of competition agencies collectively
373
374
375
376
377
378
379
ICN, Merger Remedies Review Project (Merger Working Group, Analytical Framework
Subgroup, June 2005).
Varney, Our Progress, above n 22, 11. See also Varney, Coordinated Remedies, above n
126.
2002, amended 2003, 2004, 2005, 2006), recommendation XII (A).
2002, amended 2003, 2004, 2005, 2006), comments 1 and 2 to recommendation XII(A).
2002, amended 2003, 2004, 2005, 2006), recommendation XII (B).
2002, amended 2003, 2004, 2005, 2006), recommendation XII (C).
Chapter7|Page362
recommending that their powers and resources should, in most cases, be

increased and there are likely to be substantially divergent views as to what
constitutes the authority and tools necessary for effective enforcement.
Consequently, it may prove difficult for many competition agencies to convince
their governments that wider powers are necessary to conform to this
recommendation.
Review of merger control provisions
This set of recommendations calls for the periodic review of merger control
provisions and consideration of reforms promoting convergence towards
recognized best practices.380 In addition to assisting convergence, it is
important that the threshold levels for merger control be periodically reviewed to
account for inflation or substantial changes in the market and this is recognised,
albeit briefly, by the working group in their comments to these recommendations.
For example, one of the criticisms of the US prior to the establishment of the ICN,
was that its thresholds had not kept pace with inflation, resulting in an increasing
number of relatively benign mergers being captured by the pre-merger
notification net. Since that time, the US has reviewed its thresholds and have
provided for automatic inflationary-based increases to these thresholds. 381 Not
all jurisdictions currently engage in such review whether manual or automatic,
and more work is needed to encourage compliance with this recommendation.
380
381
2002, amended 2003, 2004, 2005, 2006), recommendation XI(A) and (B) (originally
recommendation VII).
This was, however, largely (if not entirely) as a result of recommendations from its
International Competition Policy Advisory Committee rather than from the work of the ICN.
See ICPAC Final Report, above n 15, 13.
Chapter7|Page363
7.5.3 Recommended Practices for Merger Analysis

The ICN has recently developed recommended practices that provide a legal
framework for substantive merger analysis.382 The Recommended Practices for
MA383 were first adopted in 2008 and follow on from and compliment work done
by the Mergers Working Group in producing a Merger Guideline Workbook' in
2006.384 The Recommended Practices for MA are grouped into six key areas:
I.
The Legal Framework for Competition Merger Analysis (2008)
II.
Use of Market Shares: Thresholds & Presumptions (2008)
III.
Entry and Expansion (2008)
IV.
Competitive Effects Analysis in Horizontal Merger Review: Overview

(2009)
V.
Unilateral Effects (2009)
VI.
Coordinated Effects (2009)
This has been facilitated, in particular, by an emerging consensus among OECD

countries, in particular, as to the purpose of the merger regulation and an
increasing appreciation among agencies for the need to apply rigorous and
sophisticated economic analysis to merger review.
The Legal Framework for Competition Merger Analysis (2008)
This recommendation makes clear that the purpose of merger law as part of
competition policy is to identify and prevent or remedy only those mergers that
are likely to harm competition significantly385 and should not be used to pursue
382
383
384
385

ICN, 'Recommended Practices for Merger Analysis' (Merger Working Group 2008, amended
2009).
See preface to ICN, 'Recommended Practices for Merger Analysis' (Merger Working Group
2008, amended 2009). See also ICN, Merger Guideline Workbook (Merger Working
Group, April 2006).
2009), recommendation I(A)
Chapter7|Page364
other goals,386 such as industrial policy.387 Consistent with this approach, it is

also recommended that merger law and policy should provide a comprehensive
framework for effectively addressing mergers that are likely to harm competition
significantly 388 and that any decision to take enforcement action in relation to a
merger should not be based on expected anticompetitive effects that are
insignificant or transient in duration.389 The goal, when prohibiting or remedying a
merger, should not be to enhance pre-merger competition but rather to restore or
maintain competition likely to be affected by the merger. 390 This is appropriate
and consistent with the recommendation XI of the Recommended Practices for
MNP on merger remedies.
Use of Market Shares: Thresholds & Presumptions (2008)
The substance of this set of recommendations, which are not always clearly
expressed and are at times repetitive, is that while agencies should give careful
consideration to market definition and the calculation of market shares and
market concentration,391 they should not use these tools as the exclusive
determinant of anti-competitive effects.392 Market shares and concentrations,
when based on properly defined product and geographic markets393 can,
386
387
388
389
390
391
392
393
2009), comment 1, recommendation I(A).
See also Antitrust Modernization Commission, Report and Recommendations (April 2007)
<http://govinfo.library.unt.edu/amc/report_recommendation/toc.htm> 3 at 19 January 2010
which makes clear the view of the Commission that Antitrust law in the United States is not
industrial policy
2009), recommendation I(B).
2009), recommendation II(A).
2009), recommendation II(A).
2009), comment 3, recommendation II(A). Comment 4 provides some guidance regarding
matters to be considered in assessing market share.
Chapter7|Page365
however, provide an indication of the competitive significance of each merging

firm in the relevant market394 and therefore provide useful initial guidance to help
identify mergers that may raise competitive concerns requiring further
analysis.395 In this respect, the absence of high market shares or post-merger
concentration ordinarily supports a conclusion that a given transaction requires
no further analysis396 and a merger that does not significantly increase postmerger market share or concentration will normally indicate that the premerger
competitive conditions [will not] be significantly altered by the merger.397 As a
result, agencies might consider setting threshold levels of market shares and
measures of concentration under which it commits itself not to, or is generally
unlikely to, challenge a merger or over which it is likely to continue an in-depth
analysis of the mergers effects on competition.398 However, agencies should be
transparent about the meaning and use of any presumptions399 and, where such
presumptions are used, to prevent, or at least reduce, false positives based on
market share and concentration, a mechanism should be in place to ensure that
any such presumption may be overcome or confirmed by a detailed review of
market conditions.400 No enforcement decisions preventing or remedying a
394
395
396
397
398
399
400
2009), comment 1, recommendation II(A).
2009), recommendation II(B).
2009), comment 4, recommendation II(A). Note that Australia has just abandoned this
approach: see generally King, above n 272.
2009), comment 2, recommendation II(C).
2009), recommendation II(C).
Chapter7|Page366
merger should be made solely on the basis of market shares and

concentration.401
Although poorly drafted, this series of recommendations appropriately
acknowledges the value of market shares and concentration as a starting point
and initial guide to likely competitive effects, but stresses the importance of
applying a more sophisticated economic analysis before imposing merger
remedies or preventing a merger based on these criteria alone. This reflects the
current practice of most OECD states.402
Entry and Expansion (2008)
The last of the original recommendations on market analysis relates to entry and
expansion and highlights the importance of assessment of firm entry and the
expansion of existing competitors in analysing the competitive effects of a
merger.403 The possibility of such entry and expansion can impose important
competitive constraints on the merged firm404 and agencies should consider
whether the possibility of such entry or expansion will deter or offset the likely
anticompetitive effects of a merger.405 In doing this, agencies should consider
whether entry and/or expansion would be: (a) likely; (b) timely; and, (c) sufficient
in nature, scale and scope.406 Some guidance is given in the commentary for
making this assessment. This is not controversial and, again, at least in theory,
401
402
403
404
405
406
2009), comment 3, recommendation II(C).
For example, Australia removed this presumption in its latest merger guidelines: ACCC,
Merger Guidelines (November 2008).
2009), recommendation III(A).
2009), comment 2, recommendation III(A).
2009), comment 3, recommendation III(A).
2009), recommendation III(B).
Chapter7|Page367
already forms a fundamental part of the merger analysis undertaken by OECD

competition agencies.
Competitive Effects Analysis in Horizontal Merger Review: Overview (2009)
In 2009 the ICN developed three further recommended practices for merger
analysis, focussing on the assessment of competitive effects. The first
recommendation provides that the goal of competitive effects analysis for
horizontal merger assessment is to determine whether a merger is likely to harm
competition significantly by creating or enhancing the merged firms ability or
incentives to exercise market power, either unilaterally or in coordination with
rivals407 and that therefore, when conducting a competitive effects analysis,
agencies should consider whether a merger is likely to result in anticompetitive
unilateral or coordinated effects.408
Market power is defined in the commentary to the recommendation as, in relation
to sellers, the ability profitably to raise price above competitive levels for a
significant period of time, and/or to lessen competition on parameters other than
price, such as quality, service, or innovation.409 In relation to buyers, market
power is defined as the ability profitably to reduce the price paid to suppliers
below competitive levels for a significant period of time, which may in some cases
lead to an anticompetitive reduction in supplier output.410 In each case the
commentary proposes a forward looking with and without test for making this
assessment411 and stresses that the counterfactual or without part of this
test should be informed by both existing market conditions and by any significant
407
408
409
410
411
2009), recommendation IV(A).
2009), recommendation IV(B).
2009), comment 1, recommendation IV(A).
Chapter7|Page368
changes in the state of competition likely to occur without the merger.412

Consistent with Recommendation II, it stresses that while market share and
concentration changes are relevant in this respect, the assessment should be
based on a more comprehensive assessment of market conditions,413 grounded
in both sound economics and the facts of the particular case.414
Unilateral Effects (2009)
This recommendation builds on the previous one, encouraging agencies, when
assessing the possibility of a merger resulting in anticompetitive unilateral effects,
to assess whether the merger is likely to harm competition significantly by
creating or enhancing the merged firms ability or incentives to exercise market
power independently.415 This analysis should not be restricted to a consideration
of market shares and concentration416 which might over or underestimate the
potential for anticompetitive effects.417 The economic theory or model used to
conduct the analysis should be the one that best fits the characteristics of the
market or markets at issue 418 and must be based on sound and robust
economic principles, fit the facts of the market, and suitable data must exist to
412
413
414
415
416
417
418
ICN Recommended Practices for Merger Analysis, Recommendation IV(A), Comment 4.
2009), recommendation IV(C).
2009), recommendation V(A).
2009), comment 2, recommendation V(A).
2009), comment 2, recommendation V(A).
2009), recommendation V(B).
Chapter7|Page369
calibrate the model.419 The commentary provides an overview of some of the

more common theories and models.420
Using the relevant model, agencies should assess the competitive constraints
and other factors relevant to the ability of the merged firm to exercise market
power421 and the commentary provides some factors that might be considered
relevant in making that assessment, including any substantiated claims by the
merging parties that a merger will generate efficiencies sufficient to prevent or
mitigate anticompetitive unilateral effects from the merger.422
Coordinated Effects (2009)
The final recommendation relates to the assessment of the likelihood of postmerger coordinated effects. It recommends assessing whether the merger
increases the likelihood that firms in the market will successfully coordinate their
behaviour or strengthen existing coordination in a manner that harms
competition.423 To do this agencies should assess whether the relevant market
conditions are conducive to such coordination and specifically analyse whether
and how the merger would affect those market conditions and the firms ability or
incentives that would make coordination more likely post merger. 424 Agencies
should, when conducting this assessment, consider whether conductions
normally necessary for successful coordination are present, including the ability
to identify terms of coordination, the ability to detect deviations from the terms of
419
420
421
422
423
424
2009), comment 2, recommendation V(B).
2009), comment 1, recommendation V(B).
2009), recommendation V(C).
2009), comment 2, recommendation V(C).
2009), recommendation VI(A).
2009), comment 1, recommendation VI(A).
Chapter7|Page370
coordination and the ability to punish deviations.425 Some factors relevant to

making this determination are set out in the commentary.426 The final in this
series of recommendations provides that agencies should assess the extent to
which existing competitive constraints and other factors would likely deter or
disrupt effective coordination.427
7.5.4 Other
In addition to its recommendations, the ICN has provided merger-specific
assistance through the development of a Merger Guidelines Workbook,428 a
Handbook on Investigative Techniques for Merger Review,429 a Merger
Remedies Review Report,430 a ICN paper on Defining Merger Transactions for
Purposes of Merger Review431 and various other reports and reviews.
7.5.5 Analysis of ICN
The ICN has made, and continues to make, a significant contribution to improving
international cooperation in competition law432 and thereby eliminating some of
the unnecessary cost-burdens associated with multi-jurisdictional merger review.
The procedural recommendations adopted by the ICN membership are to be
welcomed, in that they address many of the problems currently associated with
425
426
427
428
429
430
431
432
2009), recommendation VI(B).
2009), comment 2, recommendation VI(B).
2009), recommendation VI(C).
ICN, Merger Guideline Workbook, above n 384.
ICN, ICN Investigative Techniques Handbook for Merger Review (Merger Working Group,
Investigative Techniques Subgroup, June 2005).
ICN, Merger Remedies Review Project (Merger Working Group, Analytical Framework
Subgroup, June 2005).
ICN, 'Defining Merger Transactions for Purposes of Merger Review' (Merger Working Group,
2007).
See Sweeney, Internationalisation of Competition Rules, above n 21, 323. See also Sokol,
above n 203, 112.
Chapter7|Page371
transnational mergers.433 Although recommended practices are meaningful only if

they are implemented,434 the trend, at least among OECD countries, appears to
be toward adherence.435 While early procedural recommendations have helped
motivate and facilitate considerable levels of procedural cooperation and
convergence, the most recent procedural recommendations and associated
guides appear to draw from existing best practice among OECD states and
therefore add little to prevailing law and policy.
As with recent procedural additions, the new recommendations on merger
analysis appear to reinforce existing best practice. Consequently, at least among
OECD states, they add little to the existing analytical framework, but rather
appear directed to the many emerging competition law regimes. These new
recommendations are also convoluted and provide less clarity than their
procedural counterparts. They also involve considerable overlap, both internally
and with each other.
There are a number of other limitations associated with the ICNs
recommendations. One such limitation stems from the fact that many of the
recommendations themselves are sufficiently vague that nations might honestly
claim adherence by following the letter if not the spirit of the recommendations.436
Consequently, it is easy to conclude substantial adherence by OECD and other
member states despite no genuine convergence.
Another, perhaps more important, limitation on the ICNs recommendations is
with the nature of the agreement itself as simply a set of recommendations
with no binding force. As a result they lack any potent force at governmental
433
434
435
436
See Eleanor Fox, Evidence to Antitrust Modernization Commission, above n 75, 3-4.
See Fox and Janow, above n 236,14.
See ICN, Implementation of the ICN Recommended Practices, above n 292, 2. Compare
Rowley and Campbell, above n 249. See also Fox and Janow, above n 236, 33-34 and
Sokol, above n 203, 113.
See Fox and Janow, above n 236, 33.
Chapter7|Page372
level437 so that it is mainly in relation to those aspects of merger review within the
purview of the relevant agencies that some real movement has been seen toward
conforming to these best practices. This limitations hould not be overstated,
however, as in many cases it is the competition agencies that have both the
ability and the inclination to effect real change in domestic competition law and
policy.438
In addition to achieving a significant level of adherence to its recommendations
among OECD states, the ICN has facilitated the formation of an intellectual
consensus about competition policy norms.439 This has led some to describe the
ICN has having a transformational effect440 on international competition law.

To date the vast majority of efforts toward cooperation, coordination and
convergence have been directed at procedural aspects of multi-jurisdictional
merger review and it is clear that the ICN and OECD, in particular, have enjoyed
considerable success in advancing adherence and convergence in this area
through their sensible and mutually reinforcing non-binding recommendations.
The success in increasing procedural convergence toward recognised best
practice has reduced costs for competition agencies and, to a more limited
degree, for merging parties. While not eliminating multiple filing requirements
437
438
439
440
See Rowley and Campbell, above n 249 and Sweeney, Internationalisation of Competition
Rules, above n 21, 325. See also ICN, Implementation of the ICN Recommended Practices,
above n 292, 11.
See White & Case LLP, White & Case Global Merger-Control Survey Finds Flood-Tide May
Be Ebbing After Years on the Rise (Press Release, 16 January 2003).
Kovacic, above n 206, 6. See also Varney, Our Progress, above n 22, 3, who claims that
working groups and committee roundtables are some of the most fruitful opportunities for
antitrust officials at the highest levels to focus on merger practices. Similarly, Campbell and
Rowley, above n 4, 283, observe that when agencies interact repeatedly, their approaches
to substantive issues tend to converge informally and gradually with generally accepted
economic frameworks serving as reference points.
Fingleton, above n 209.
Chapter7|Page373
and associated costs, it has helped reduce them in some cases by promoting
transparency and the use of objective notification thresholds which incorporate an
appropriate jurisdictional nexus. It has also benefited parties by reducing some
uncertainty, facilitating coordination of multiple notifications,441 avoiding
duplication in the provision of information in some cases, providing more
commercially realistic timetables for review and enhancing coordination of
investigation and remedies where appropriate. Institutional recommendations
and the many bilateral agreements that reinforce them have also played a critical
role in addressing divergence among antitrust authorities,442 both procedurally
and in relation to substantive law.443
441
442
443
See generally ABA Section of Antitrust Law, International Antitrust Cooperation Handbook,
above n 5, iii and 5-8.
See generally Campbell and Rowley, above n 4, 273.
Chapter7|Page374
PART IV: THE COST OF COMPLIANCE
This part assesses the cost, economic and otherwise, of the existing mechanisms
for the regulation of transnational mergers. This involves an assessment of the
costs incurred in enforcing and complying with substantive laws and those
associated with the procedures put in place to monitor and assess compliance,
including costs associated with the extraterritorial application of these laws and
procedures and the duplication that inevitably entails for transnational mergers.
This cost assessment will provide a benchmark by which possible alternative
approaches to the regulation of transnational mergers may be assessed. These
alternatives will be developed and considered in Part V.
Chapter8|Page375
Chapter 8
The cost of transnational merger regulation
[T]he proliferation of merger control regimes is imposing significant and
unnecessary transaction costs on virtually all international transactions,
and in particular on those transactions which do not raise any significant
competitive concerns whatsoever.1
8.1 Introduction
Despite increased levels of cooperation, particularly between countries enjoying
close bilateral ties, and growing convergence between national merger laws and
policy, significant differences remain between national merger control regimes
and the analytical approaches taken by regulators to their enforcement.2 As a
result, the unilateral extraterritorial application3 of national laws to trans-national
mergers continues to impose significant costs on merging parties,4 competition
authorities and society at large. As merger activity becomes more frequent and
Business and Industry Advisory Committee to the OECD (BIAC) and International Chamber
of Commerce (ICC), 'Recommended Framework for Best Practices in International Merger
Control Procedures' (4 October 2001) 2.
See, eg, Robert D Paul, 'The Increasing Maze of International Pre-Acquisition Notification'
(2000) 11 International Company and Commercial Law Review 123
<http://www.whitecase.com/memo_increasing_maze_notification_robert_paul.html> at 18
February 2004, who describes multijurisdictional acquisition laws as a hodge-podge. See
also Nathan R Viavant, 'Agreeing to Disagree?: Continuing Uncertainties in Transatlantic
Merger Clearance Post-EC Merger Regulation' (2008-2009) 17 Tulane Journal of
International and Comparative Law 177, 201 and Daniel J Gifford and Robert T Kudrle,
'Rhetoric and Reality in the Merger Standards of the United States, Canada, and the
European Union' (2004-2005) 72 Antitrust Law Journal 423.
See, eg, Michele Giannino, International Cooperation and the Regulation of Transnational
Mergers (D Phil Thesis, Queen Mary College of University of London, 2006) 16 and 18.
See, eg, Eleanor M Fox, 'Competition Law and the Agenda for the WTO: Forging the Links
of Competition and Trade' (1995) 4 Pacific Rim Law & Policy Journal 1, 14 and Konrad von
Finckenstein, 'International Antitrust Cooperation: Bilateralism or Multilateralism?' (Speech
delivered to the American Bar Association Section of Antitrust Law and the Canadian Bar
Association National Competition Law Section, Vancouver, 31 May 2001).
Chapter8|Page376
increasingly transnational5 and more nations adopt merger regimes,6 this cost
will, in the absence of any meaningful reforms, continue to rise.7
Previous chapters have considered in some depth the benefits associated with
the detection and prevention of anti-competitive mergers and the processes
employed to achieve this goal.8 They have also examined some of the costs
associated with national merger laws and processes and their extraterritorial
application. Despite the costs, it was established that the regulation of mergers
through PMN, whether mandatory or voluntary, remains the most appropriate
way of achieving the goal of enhancing and maintaining global modern consumer
welfare and that the extraterritorial application of substantive merger laws, based
on local economic impact, was an appropriate, and at times necessary,
mechanism for furthering this goal.
The purpose of this chapter is not, therefore, to debate the merits of PMN,
extraterritorial jurisdictional assertions or substantive laws, but rather to draw
together all of the costs associated with this current system of merger regulation
with a view to benchmarking it against other possible regulatory approaches.
See generally J William Rowley, Omar K Wakil and A Neil Campbell, 'Streamlining
International Merger Control' (Speech delivered to the EC Merger Control 10th Anniversary
Conference, Brussels, 14 September 2000) 1-2, Paul, above n 2 and ICPAC, 'International
Competition Policy Advisory Committee to the Attorney General and Assistant Attorney
General for Antitrust - Final Report' (Department of Justice, United States, 2000) 2 (ICPAC
Final Report) 47.
See generally Choe Chongwoo and Chander Shekhar, 'Compulsory or Voluntary Premerger Notification? Theory and Some Evidence' (Working Paper No 13450, MPRA Paper,
2009) 1.
See, eg, A Neil Campbell and J William Rowley, 'The Internationalization of Unilateral
Antitrust Law Journal 267, 297, William E Kovacic, Extraterritoriality, Institutions and
Convergence in International Competition Policy (Speech to Annual Meeting of the
American Society of International Law, Washington DC, 5 April 2003) 3 and W Adam Hunt,
Business Implications of Divergences in Multi-Jurisdictional Merger Review by International
Competition Enforcement Agencies (2007-2008) 28 Northwestern Journal of International
Law and Business 147, 147.
See, in particular, chapter 4.
Chapter8|Page377
8.2 The current cost of merger regulation

8.2.1 Introduction and cost allocation
The current system of unilateral application of multiple merger regimes to
transnational mergers imposes costs which may be broadly classified as costs to
merging parties, cost to third-parties, costs to competition authorities and costs to
the consumer and taxpaying public. Before identifying the various costs incurred
by each group, it is important to understand that in many cases these costs will
overlap. For example, although there is a cost to authorities in reviewing
mergers, where this cost is fully funded by the parties through the provision of
filing fees, that cost should be attributed to the parties themselves and not
counted twice when calculating the sum cost of merger regulation as
demonstrated below.9
FIGURE 8.1
FIGURE 8.2
FIGURE 8.3
COST ALLOCATION
WHERE THERE ARE NO
NOTIFICATION FEES
COST ALLOCATION
WHERE AGENCY
PARTY FUNDED BY
NOTIFICATION FEES
COST ALLOCATION
WHERE AGENCY
FULLY FUNDED BY
NOTIFICATION FEES
For illustrative purposes, it will be assumed that in each of Figures 8.1, 8.2 and
8.3 the total cost for a single merger review to parties (excluding fees) is $10m
and total cost to the regulator is $2m. In each example the total cost of merger
The cost breakdowns represented in the diagrams are not intended to be proportionate by
merely illustrative. The proportion of costs attributable to different groups will vary
depending on the specific regimes and nature of the merger.
Chapter8|Page378
review will be $12m, regardless of whether or not filing fees are incurred
(assuming the fees go toward funding the agencys merger review process). In
Figure 8.2 a filing fee of $1m would transfer part of this total cost from the
regulator to the parties in the form of filing fees and, in Figure 8.3 the transfer
would be total. This cost transfer to parties must be acknowledged, both so as to
accurately calculate the sum cost of merger review and to facilitate an
assessment of the appropriateness or otherwise of relevant cost-transfers within
the review process. Although this example oversimplifies the equation ignoring,
for example, the filing fees of other non-problematic mergers which may crosssubsidise the review cost of more complex mergers it serves an illustrative
purpose.
Additional overlap and cost-transfers will arise when the consumer-public is
added to the equation. Consequently if, for example, a single transnational
merger review costs $10m for parties (including $2m filing fee), $2m for
authorities and $8m for consumers (comprised of $6m in increased cost as a
pass-on fee from the merging parties and $2m in deferred cost-savings) the total
cost to society would not be $10m + $2m + $8m ($20m) but rather would be $4m
for parties ($10m less the $6m passed-on to consumers) + $0m for the
competition authority + $8m for consumers (a total of $12m).10 Where the review
relates to an anti-competitive merger, the cost to consumers would be reduced to
$6m, representing the cost passed on by the merging parties.11 This overlap is
demonstrated in the following diagrams.
10
11
This breakdown of figures is not intended to be representative, but have been selected for
illustrative purposes only.
In such a case there would at least theoretically be no deferred efficiency gains for the
public. Although the merger has not proceeded, it is assumed in this example that one or
more of the parties to the proposal would pass on the cost to their consumers. The net cost
to consumers will in fact be less if the PMN process effectively prevents a merger which
would have produced anti-competitive effects.
Chapter8|Page379
FIGURE 8.4
FIGURE 8.5
PRO-COMPETITIVE MERGER
WHERE AGENCY PARTLY
FUNDED BY PARTIES
ANTI-COMPETITIVE MERGER
WHERE AGENCY PARTLY
FUNDED BY PARTIES
In Figure 8.4 the agency incurs a cost but it is wholly off-set by funding from
notification fees and taxation. The cost to consumers includes funding the
agency and loss associated with delayed merger benefits as well as corporate
pass-on. In Figure 8.4 consumer loss is reduced to that related to agency
funding and corporate pass-on.
As with the previous examples, these are intended to be illustrative only rather
and do not purport to accurately identify the proportional allocation of costs; it is
likely that in many cases the pass on to consumers will be significantly higher
than illustrated. The examples also clearly and deliberately ignore some
indirect costs and benefits of merger review. One indirect benefit for the public
and agencies might, for example, relate to the use of PMN fees to fund other
competition monitoring and enforcement activities, thus reducing the burden on
the public purse and/or increasing the amount of publicly beneficial enforcement
activity the agencies can carry out, such as detecting and prosecuting cartel
conduct. In such a case, borrowing from the above example, if the cost to
authorities is $2m, but the filing fee is $4m, then although the cost to parties will
remain static, the cost to society as a whole might be less than $2m because less
Chapter8|Page380
is being asked of the public purse than would be necessary absent the merger
fee.12
The cost-analysis becomes again more complex when multiple notifications are
involved. In such a case, synergies generated through cooperative enforcement
endeavours13 and overlapping notification requirements might significantly reduce
the cost to individual regulators and, at least proportionately, to parties. This is
represented (in part) by Figure 8.6.
FIGURE 8.6 COST SYNERGIES OF TRANSNATIONAL MERGER
REVIEW FOR AGENCIES
Figure 8.6 suggests that the costs to each authority in a cooperative multijurisdictional review should be reduced as duplication is reduced, including
duplication of economic analysis or data collection from interested third parties.14
At the extreme, some agencies might choose to defer all or part of an
assessment to another agency. It is clear, however, that those agencies that do
12
13
14
The benefit of deterrence of other anti-competitive mergers achieved through the existence
and enforcement of merger laws and procedures is also not factored this equation. Flow-on
benefits, such as providing additional employment opportunities, funded through the use of
fees, and increasing expert experience in evaluating mergers (which might also enhance
economic assessments in other areas of competition law and policy), have also been
removed from this assessment.
See generally D Daniel Sokol, 'Monopolists Without Borders: The Institutional Challenge of
International Antitrust in a Gilded Age' (Research Paper No 1034, University of Wisconsin
Legal Studies, 2007) 60-61.
See chapter 2, section 2.2.5, above.
Chapter8|Page381
not cooperate with others, whether actively or passively, will not enjoy the benefit
of these cost synergies.
The cost to parties will, however, increase as more agencies review their
transaction, but will not do so proportionately.15 Fees represent a fixed cost and
are, therefore, not proportionally reduced as the number of notifications required
increases. Information requirements will, however, overlap and, to the extent that
they do (for example, global sales figures), the parties will experience cost
synergies. The cost of delay should also be proportionally reduced, at least
where parties are able to coordinate the timing of their notifications. In those
cases delay will not be cumulative, but will be concurrent, the total delay caused
being commensurate with that imposed by the slowest reviewing jurisdiction.
Conversely, the cost associated with uncertainty of outcome increases as the
number of regulators increase.16
FIGURE 8.7 AVERAGE COST TO AGENCIES OF COOPERATIVE
MULTIPLE REVIEW 17
15
16
17
See chapter 5, section 2.5.5, above.

All of these costs will be examined in more detail below.
The proportions represented are illustrative only; many variables will be involved, such as
whether or not authorities cooperate and the nature that cooperation these variables will
be discussed below. Each circle represents the average cost of review per transaction for
each authority, beginning with the cost involved for a single reviewer; of course costs will not
normally be borne evenly by each reviewing jurisdiction
Chapter8|Page382
FIGURE 8.8 CUMULATIVE COST TO PARTIES OT MULTIPLE REVIEW 18
When making a final cost assessment it is, therefore, important to keep in mind
not only cost-transfers between those impacted by the merger review process,
but also possible cost synergies generated when mergers are reviewed in
multiple jurisdictions.
All of these costs will first be assessed and allocated based on the manner in
which they are incurred. For example, where agencies expend internal or
external resources conducting merger reviews those costs will be attributed to
them, regardless of their funding source. This attribution does not ignore the
reality that such costs may frequently be funded by parties, or by the public
through taxes, but is intended to identify the source of costs with a view to
determining if and how these costs might be avoided or minimised.
18
Each circle represents the total cumulative cost associated with substantive and
procedural compliance, which will increase, though not proportionately, as the number of
reviewing jurisdictions increases.
Chapter8|Page383
8.2.2 The cost to business

The process of examining mergers prior to completion emerged when only a
handful of jurisdictions had merger laws and there was limited, if any, crossborder activity. The cost of compliance with merger laws and procedures was,
therefore, generally isolated to the single jurisdiction in which companies were
located. Even then, the cumulative cost of domestic merger review for parties in
the US alone was estimated at almost US$1 billion a year for transactions raising
no significant competition law concerns.19
Today there are literally dozens of countries requiring pre-merger notification and
more considering the introduction of such systems.20 In addition there are
voluntary systems of notification almost always adopted by the parties and
numerous other regimes that prohibit anti-competitive mergers (requiring
adherence to substantive laws) without requiring that they be notified prior to
consummation. While, as noted earlier, the explosion of reviewing jurisdictions21
may have reduced, through cooperation, the average cost of merger review for
individual regulators,22 the cost to business has escalated significantly.23
19
20
21
22
23
Rowley, Wakil and Campbell, above n 5, 9-10, citing a 1997 study by Sims and Herman: J
Sims and D P Herman, The Effect of Twenty Years of Hart-Scott-Rodino on Merger
Practice: A Case Study in the Law of Unintended Consequences Applied to Antitrust
Legislation (1997) 65 Antitrust Law Journal 865 at 877-878.
See generally Paul, above n 2.
See Paul, above n 2.
Although it may have increased total cost, partly due to the digital age generating more
documents and because of the increasing complexity of merger analysis, cooperation it may
have decreased cost proportionately when compared with single jurisdiction review.
See, eg, ICPAC Final Report, above n 5, 58, quoting Submission by Lester L Coleman,
Executive Vice President and General Counsel, Halliburton Company, in response to
Advisory Committee Multijurisdictional Merger Review Merger Case Study questionnaire re
the Halliburton/Dresser transaction, at 4 (9 March 1999). See also ICPAC Final Report,
above n 5, 91 and Independent Music Publishers and Labels Association (Impala,
International Association) v Commission of the European Communities (T-464/04) [2006]
ECR II-2289, in which the proposed merger was reviewed by at least 12 jurisdictions (see
para 229).
Chapter8|Page384
Example: Alcan-Pechiney-Alusuisse merger24

The parties had assets or revenue in at least 40 jurisdictions.
Law firms providing advice: 35
New merger regimes entering force between the public

announcement of the merger and completion: 2
Merger notification filings made: 16
Merger notification filing fees paid: over US$100,000
Languages in which notifications made: Czech, English,

German, Polish, Portuguese, Russian, Spanish, Turkish
Time taken to comply with US second request: almost 6

months
Boxes of printed material generated in Montreal office:

400
A 2002 study of business costs for mergers25 concluded that a typical multijurisdictional merger review required filing in 5.6 jurisdictions with an additional
2.2 jurisdictions considered26 at an average combined external cost of
24
25
26
J William Rowley and Omar K Wakil, 'International Mergers: The Problem of Proliferation'
(Paper presented at the 33rd Annual Conference on International Antitrust Law and Policy,
New York, September 2006) 8 and Jacques Bougie, Reflections on the Merger Task Force
at the Turn of the Millennium: The Requirement for Convergence of Multijurisdictional
Merger Review Systems in International Bar Association, EC Merger Control: Ten Years On
(2000) 73-81.
PriceWaterhouseCoopers, 'A Tax on Mergers? Surveying the Time and Costs to Business of
Multi-jurisdictional Merger Reviews' (June 2003) (although report was 2003, the study data
comes from 2002). See also Joe Sims and Deborah P Herman, 'Twenty Years of HartScott-Rodino Merger Enforcement: The Effect of Twenty Years of Hart-Scott-Rodino On
Merger Practice: A Case Study In The Law of Unintended Consequences Applied To
Antitrust Legislation' (1997) 65 Antitrust Law Journal 865 and Rowley, Wakil and Campbell,
above n 5, 9-13.
PriceWaterhouseCoopers, above n 25, 15. This is an average only. Many are required to
notify many more jurisdictions. For example, the MCI/WorldCom merger of 1997 was
notified to more than 30 competition authorities; see Wilson, Joseph, Globalization and the
Limits of National Merger Control Laws: Gaps in Global Governance and the Need for an
45.
Chapter8|Page385
Aus$5.6m.27 Costs were made up of 65% legal fees, 19% filing fees and 14%
fees for advisors. The more complex the deal, the higher the cost.28 Even for
mergers subject to only initial stages of review, the average external cost
(comprising mostly legal fees) has been estimated at Aus$931,000.29 In addition
to the external costs, average internal costs of compliance for business have
been estimated at 28 person-weeks where only initial reviews are conducted or
120 person weeks where in-depth reviews are involved.30 Added to the cost of
notification itself is the cost associated with delaying the transaction.31 Where
only an initial review is conducted the average duration for the review of a
transaction is estimated at five months;32 rising to nine months when an in-depth
review is conducted.33
27
28
29
30
31
32
PriceWaterhouseCoopers, above n 25, 4. The estimate was made in Euro currency

(3.3m). Conversion to Australian dollars is accurate as at 20 January 2005.
Ibid.
Ibid. The figure was listed as 545,000 and the Australian currency conversion was
performed on 10 January 2005.
Ibid 4. The study also concluded that for initial reviews a doubling of the number of reviews
(merger jurisdictions) leads to a doubling of external costs for which there are no economies
of scale. However, the study did find economies existed in relation to internal costs (at 5).
This is perhaps attributable to the fact that nexus thresholds, timing requirements and, in
particular, informational requirements differ substantially in most jurisdictions so that legal
experts in a variety of jurisdictions need to be engaged to investigate first, whether
notification is required and, if it is, to then prepare the necessary documentation for
submission. Economists, who form another large portion of external costs, would also be
required, in many cases, to evaluate the economic impact of a potential merger for each
jurisdiction required to be notified. It has also been suggested that, given the small sample
group in the PriceWaterhouseCoopers study, these figures may not reflect the true cost to
the parties which may in fact be higher: Eleanor M Fox and Merit E Janow, A Report of the
Second Annual Conference of the International Competition Network (International
Competition Network, 2003) 13.
This cost arises for both the parties and for consumers and business who may be deprived
of the benefits associated with increased efficiency, such as cost savings or increased
quality products: see Simon J Evenett, How Much Have Merger Review Laws Reduced
Cross-Border Mergers and Acquisitions? in J William Rowley (ed), International Merger
Control: Prescriptions for Convergence (2001) 39, Lise Davey and John K Barker, 'Merger
Review Benchmarking Report' (Competition Bureau (Canada), 2001) 96 and .
PriceWaterhouseCoopers, above n 25, 29. See also Concern expressed about the potential
for multijurisdictional filing to discourage or delay consumer-friendly transactions in ICN,
'Report on the Costs and Burdens of Multijurisdictional Merger Review' (Mergers Working
Group, Notification and Procedures Subgroup, November 2004) 9, citing Charles A James,
Assistant Attorney General for the Antitrust Division, United States Departement of Justice,
Chapter8|Page386
This study is the only detailed empirical study aimed at quantifying the
management time, duration and external costs to business of merger review in
multiple jurisdictions.34 Its focus was cross-border transactions with high
average transaction values35 and, as a result, it might both overstate and
understate36 the business costs associated with merger review when smaller
transactions are factored into the equation. It also predates EU substantive
reforms and some broader trends toward convergence in the economic analysis
adopted for the assessment of potential competitive effects of mergers, both of
which have gone some way toward enhancing predictability and improving
transparency in some states. Conversely, the subsequent increase in PMN
jurisdictions means that the study now underestimates the likely number of
jurisdictions that must be evaluated and notified and the expense associated with
filing fees, which have been introduced or increased in some countries.
Even allowing for the passage of time since the empirical data was gathered, the
conclusions of the study clearly demonstrate that the cost of transnational merger
review to parties is significant. The identification of the costs incurred and the
proportionate breakdown of those costs also continues to provide useful
guidance as to the nature of costs faced by business in multi-jurisdictional merger
review and provides some direct evidence of the type of cost that are of most
concern to business. These costs can be divided into the following broad
categories:
33
34
35
36
Perspectives on the International Competition Network (2001) 4(3) ABA International

Antitrust Bulletin <http://www.abanet.org/antitrust/committees/international/fallwinter01.pdf>.
PriceWaterhouseCoopers, above n 25, 29.
Ibid 4.
Ibid 15.
For example, it understates business costs by ignoring opportunity cost associated with
delay: see J William Rowley and A Neil Campbell, 'A Comment on the Estimated Costs of
Multi-Jurisdictional Merger Reviews' (September 2003) The Antitrust Source 1, 1.
Chapter8|Page387
Substantive compliance
cost of complying with substantive law of affected states
Procedural compliance
cost of determining notifiability (both mandatory and voluntary)
cost of filing
filing fees
compliance with information requirements
legal fees (external costs)
resources (physical and material) (internal costs)
delay and uncertainty (internal costs)
divergent outcomes
other costs associated with merger regulation

o
cost of merger remedies37
cost of conflicting decisions
cost of Type I errors
cost of excessive remedies (remedial over-reach)
Cost of compliance with substantive laws

The cost of compliance with substantive laws in each jurisdiction involves due
diligence in ensuring an awareness of both the existence and terms of any
relevant substantive laws and an assessment of likely adherence based on
predicted interpretations,38 determined by reference to analytical guidelines and
any available precedent. Consequently, not only the evaluation of the proposed
merger, but also the evaluation of the ways to evaluate it, can represent
significant transaction costs.39 In this respect, to achieve compliance, parties, or
37
38
39
Where inappropriate, these comprise both a cost to business and a cost to consumers; for
present purposes only the cost to business is assessed.
As discussed in chapter 3, even where substantive approaches appear identical, factors
such as aggressiveness of enforcement will be relevant in assessing viability of transactions
in any given jurisdiction.
Sokol, Monopolists Without Borders, above n 13, 60.
Chapter8|Page388
their advisers, must maintain an awareness of the law and the analytical
approaches governing their assessment, which often involves engaging foreign
legal advisors to assist. 40 This is made more difficult by the dynamic nature of
merger review law and procedure, with change often triggered by a change of
political regime, agency leadership or guideline revision.41
There has, over the past decade, been greater convergence toward a competitive
based merger test predicated largely on two key theories of harm, unilateral and
coordinated effects, as identified in recent ICN recommendations.42 To a degree,
this may make substantive compliance both easier, in that it need not be tailored
to specific jurisdictional requirements or modified to adhere to the most restrictive
merger laws, and also more predictable.
Most notably this has occurred through the adoption by the EU and many of its
member countries of the SIEC test for mergers. Although the gap between the
former EU dominance test, as applied in practice, and the new SIEC test, does
not appear large,43 greater convergence of stated law and approach may have
some long term predictability and consistency benefits for parties. However,
adoption of new laws, even where apparently consistent with other regimes, will
40
41
42
43
See, eg, Fox, Competition Law and the Agenda for the WTO, above n 4, 14.
The United States currently provides an example of all of these: see, eg, Daniel A Crane,
Obamas Antitrust Agenda (2009) 32(3) Regulation 16 and D Daniel Sokol, 'Change and
Continuity in International Antitrust Under an Obama Administration' (January 2009) GCP:
The Online Magazine for Global Competition Policy <http://ssrn.com/abstract=1317922> at
18 February 2009 and Christine A Varney, An Update on the Review of the Horizontal
Merger Guidelines (Speech delivered to the Horizontal Merger Guidelines Review Projects
Final Workshop, Washington DC, 26 January 2010).
2009).
Even prior to the change to the European test, studies demonstrated that, in relation to
substantive approaches to merger review in different jurisdictions, business believed such
approaches to be moderately consistent: PriceWaterhouseCoopers, above n 25, 40.
Compare Gotts and Proger who argue that substantive differences might be more
problematic than procedural ones: Ilene Knable Gotts and Proger, Philip A,
'Multijurisdictional Review: A Societal Cost That Must be Streamlined' (2001) 5 The M&A
Lawyer 7. See also Alberto Heimler, Was the Change of the Test for Merger Control in
Europe Justified? An Assessment (Four Years After the Introduction of SIEC) (2008) 4
European Competition Journal 85.
Chapter8|Page389
experience a period of transition as appropriate precedent is established and, at

least for this transitional period, may increase, rather than decrease the cost of
adjudicating substantive compliance in the short term.
In addition to general substantive convergence,44 efforts at increasing
transparency, through new and updated merger guidelines modelled on
emerging best principles, increased provision of reasons for merger decisions, as
well as through the collection of comparative merger information,45 is continuing
to facilitate an understanding of substantive approaches which is helping to
alleviate some of these substantive compliance costs.
Although costs associated with compliance with substantive laws remain far from
trivial,46 they do not appear to present significant cost concerns for parties. It is
clear that the primary concern or parties lies in compliance with procedural
requirements. 47
Cost of determining notifiability
A major source of cost to business of multi-jurisdictional merger review lies in
determining whether their proposal triggers notification requirements48
mandatory or voluntary in multiple jurisdictions.49 Some have even speculated
44
45
46
47
48
49
Compare Chris Noonan, The Emerging Principles of International Competition Law (2008)
97 who observes that there still remain significant levels of diversity and convergence is
occurring slowly.
See, eg, John Davies (ed), Merger Control 2010: The International Regulation of Mergers
and Joint Ventures in 64 Jurisdictions Worldwide, Getting the Deal Through (2009) and the
ICN web site.
See, eg, Campbell and Rowley, above n 7, 300.
ICN, Report of Costs and Burdens, above n 32,15, quoting Barry Hawks testimony to the
ICPAC Advisory Committee: the differences in the merger controls and in substantive
tests are not a significant cost problem. Its the volume of merger laws and the number of
transactions that must be notified.
The US the FTC have, for example, reported that they have responded to thousands of
telephone calls seeking information concerning the reportability of transactions : Federal
Trade Commission and Department of Justice, Hart-Scott-Rodino Annual Report Fiscal Year
2008: Section 7A of the Clayton Act, Hart-Scott-Rodino Antitrust Improvements Act of 1976
(Thirty-first Annual Report) (2008) 2. See also Wilson, above n 26, 46.
See, eg, Ariel Ezrachi, 'Limitations on the Extraterritorial Reach of the European Merger
Regulation' (2001) 22 European Competition Law Review 137, 139, fn 22, ICN, Report of
Chapter8|Page390
that this determination might, at least in some cases, constitute the largest
transaction cost.50
The task of assessing notifiability is one parties must take seriously, given that
most mandatory regimes impose substantial fines for failure to comply with the
notification provisions,51 most commonly in the form of a percentage or turnover,
or may declare a transaction void, even if failure to notify was unintentional52 and
even if the merger itself raised no substantial competition concerns.
The cost is largely dissociated from the cost of substantive compliance because
triggers are usually not indicative of a likely substantive breach. It is also distinct
from the cost of notification itself. Although the data associated with determining
notification may be recycled in the notification process where thresholds are
triggered, thereby reducing notification costs, no such cost efficiencies can be
gained where the parties investigations reveal that notification is not required.
While the cost of determining notifiability has increased with the growth of merger
regimes globally, the average cost per jurisdiction of making this assessment has
been reduced as a result of the increasing adoption by countries of objective
triggers53 to replace previously vague or subjective thresholds.54 For example,
50
51
52
53
54
Costs and Burdens, above n 32, 4 and 17, Rowley and Wakil, above n 24, 5 and ICPAC
Final Report, above n 5, 3.
ICN, Report of Costs and Burdens, above n 32, 16, quoting Debra Valentines testimony to
the ICPAC Advisory Committee on 11 September 1998, p 98 Transcript (who was in turn
reiterating a thought from Barry Hawk): You know what my hugest transaction cost is - the
thing that takes me the longest to figure out - simply whether I should file or not. See also
Rowley and Wakil, above n 24, citing Daniel Cooperman, Senior Vice President, General
Counsel and Secretary Oracle Corporation, Testimony before the Antitrust Modernization
Commission (8 November 2005) at 2 and ICPAC Final Report, above n 5, 91.
Chander Shekhar and Philip L Williams, Should the Pre-Notification of Mergers Be
Compulsory in Australia? (2004) 37 The Australian Economic Review 383, 385. See also
See, eg, Paul, above n 2.
This is attributable, in part, to recommendations of ICPAC (ICPAC Final Report, above n 5,
97) and, more recently, the International Competition Network. See ICN, Report of Costs
and Burdens, above n 32, 13.
ICN, Report of Costs and Burdens, above n 32, 11, observing that in many countries filing
requirements are vague, subjective or difficult to interpret.
Chapter8|Page391
since 2000, objective turnover thresholds have replaced market share based
thresholds in the Czech Republic, Greece55 and Slovakia. As a result, the need
for parties to engage in local market share analysis in OECD jurisdictions has
largely, but not entirely, been eliminated as a precursor to determining
notifiability.56 While more subjective economic information will remain relevant for
firms that meet the notification threshold and in assessing substantive
compliance, for those mergers that do not trigger notification requirements,
objective thresholds increase certainty, reducing the risk of fines for failure to
notify, may avoid the need to incur the costs associated with rigorous economic
analysis and, in some cases, may also avoid the necessity of retaining local
counsel.57
Nevertheless, some OECD jurisdictions still impose subjective market-share
based thresholds, including Portugal, Spain and Turkey, that will increase both
the costs of determining notifiability and associated uncertainty. Australia, New
Zealand and the United Kingdom also recommend notification based on levels of
market share, but as these countries operate voluntary notification systems,
parties do not risk penalties for failure to notify.
Even where objective thresholds are in place, substantial costs remain, as
merging parties must first ascertain their notifiability requirements (incurring
substantial legal fees) and then gather documentation of local sales, assets and
turnover, all often requiring conversion into local currency,58 to determine whether
55
56
57
58
In Greece there is still a post-merger notification requirement based on a relatively low

market share.
Notably, the three jurisdictions permitting voluntary notification all suggest notification based
on market share or concentration data. Turkey, Spain and Portugal also continue to impose
notification requirements based on market share.
It has been observed that the 'pace of change and the lack of reliable sources of information
in many jurisdictions' compounds the problem of multi-jurisdictional merger review and that
in some countries local practitioners disagree as to the existence or nature of merger
notification requirements: see Rowley, Wakil and Campbell, above n 5, 3.
In the OECD alone, currencies used for setting thresholds include Australian dollars,
Canadian dollars, US dollars, Czech Korunas, the Danish and Norweigen Kroner, the
Hungarian Forint, the Icelandic Krona, the Japanese Yen, the Korean Won, the Polish Zloty,
Chapter8|Page392
these thresholds have been met. This process necessitates a significant

investment of time and resources.59
Cost of notification
The most significant cost to parties usually arises where notification thresholds
are met.60 Costs incurred are both direct, or external (such as filing fees and fees
for advisors (legal, industrial and economic)) and indirect, or internal (such as
'diverted executive time and the delayed or foregone achievement of merger
efficiencies').61
(a) Filing fees
Filing fees imposed for notification are the most obvious62 and objectively
identifiable compliance cost incurred by business. Firms engaged in global
commerce may now be required to notify in dozens of jurisdictions,63 even if they
have no local presence,64 and filing fees may be substantial in each.65 For
example, a firm required to notify in the US, Canada and Mexico could incur
59
60
61
62
63
64
65
the Swedish Krona, the Swiss Franc, the Turkish Lira, the Pound Stirling for the UK and the
Euro.
See generally ICN, Report of Costs and Burdens, above n 32, 4.
Ibid 7.
Although the focus of this research is on OECD jurisdictions, there are now more than 70
jurisdictions with pre-merger notification regimes: see ICN, 'Merger Notification Filing Fees'
(Mergers Working Group, April 2005) 4. See also Kovacic, Extraterritoriality, above n 7, 3,
ICN, Report of Costs and Burdens, above n 32, 16, quoting Thomas Donilons testimony to
the ICPAC Advisory Committee on 11 September 1998, p 90-92 Transcript and Malcolm R
Pfunder, Twenty Years of Hart-Scott-Rodino Merger Enforcement: Some Reflections on,
and Modest Proposals for Reform of, the Hart-Scott-Rodino Premerger Notification Program
(1997) 65 Antitrust Law Journal 905.
See, eg, Spencer Weber Waller, The Twilight of Comity (2000) 38 Columbia Journal of
Transnational Law 563, 574-575, observing that most major transnational mergers or
acquisitions end up filing for antitrust review in multiple jurisdictions, including many
countries in which they have little or no actual operations or sales and that the current
record appears to be the Exxon-Mobil merger, which may ultimately involve the filing of up to
40 [575] premerger notifications in different jurisdictions.
See generally ICN, Merger Notification Filing Fees, above n 63, 4, observing that more than
30 jurisdictions currently charge fees.
Chapter8|Page393
notification costs of AU$368,546,66 even if the merger has no prospect of harming

competition. Some have estimated average notification costs for transnational
mergers to be in the millions of dollars.67
Filing fees vary significantly between jurisdictions.68 Some countries impose fees
designed to cover all or part of the costs of the review process69 or to fund
merger enforcement generally,70 some use the fees to cross-subsidise other
enforcement activity71 and yet others impose no fees or impose fees only where a
second stage review is initiated or competition concerns raised.72 In some cases
the level of fees will be variable,73 adjusted for the size of the merger,74 likely
competitive impact, or based on the number of hours actually taken to review the
merger,75 but in many cases a flat fee will apply.76
Figure 8.9 provides a breakdown of fees charged in OECD jurisdictions and the
EU. Figures provided include the lowest applicable fee for notification77 and the
highest in local currency and include a conversion of fees into Australian dollars
for comparative purposes:
66
67
68
69
70
71
72
73
74
75
76
77
Calculated as AU$306,883 (US) + AU$50,703 (Canada) AU$10,960 (Mexico). Both Canada

and Mexico impose a flat fee. For the US the highest fee, based on party size, has been
selected. Conversion conducted on 12 December 2009.
Chongwoo and Shekhar, above n 6, 19, observing that the International Competition
Network has estimated average notification costs over multiple jurisdictions to be as much
as 3.28 million euros. See also ICN, Merger Notification Filing Fees, above n 63.
See generally ICN, Merger Notification Filing Fees, above n 63 and Appendix 1.
See ICN, Merger Notification Filing Fees, above n 63, 17.
It may, for example, also fund litigation against those parties who merge without notifying
(whether required to notify or not). See ICN, Merger Notification Filing Fees, above n 63, 4.
See, eg, ICN, Merger Notification Filing Fees, above n 63, 4 and Rowley, Wakil and
Campbell, above n 5, 7.
See generally ICPAC Final Report, above n 5, 107.
ICN, Merger Notification Filing Fees, above n 63, 7.
The US is an example of such a system.
This is the case in Switzerland.
Of the 21 OECD states that impose notification fees, nine impose a flat fee. See Appendix
1. See also Alexandr Svetlicinii, Competitiveness and Competition: International Merger
Control from the Business Prospective (2008) in Vinko Kandija, Andrej Kumar (eds), Years
of European Union (2008) 50 Rijeka (Croatia) 7 and ICN, Merger Notification Filing Fees,
above n 63, 7-14.
Some jurisdictions allow waiver of fees in exceptional cases these are not represented in
the table.
Chapter8|Page394
FIGURE 8.9 FILING FEES IN OECD JURISDICTIONS AND THE EU 78

Country
Australia
(formal)
Australia
(informal)
Austria
Belgium
Lowest
Highest
25,000
25,000
1,500
0
30,000
0
Canada
50,000
50,000
CzechRepublic
100,000
Denmark
0
EU
0
Finland
0
France
0
Germany
3,000
Greece
1,350
Hungary
4,000,000
Iceland
0
Ireland
8,000
0
0
0
100,000
0
0
0
0
100,000
1,350
12,000,000
0
8,000
1.2%valueupto
60,000
0
0
0
Mexico
10,000
10,000
Netherlands
NewZealand
Norway
Poland
Portugal
Slovakia
Spain
Sweden
15,000
2,250
0
5,000
7,500
3,319
1,530
0
Switzerland
5,000
Italy
3,000
Japan
Korea
Luxembourg
78
Currency
Australian
dollars
Australian
dollars
Euro
Euro
Canadian
dollars
Korunas
Kroner
Euro
Euro
Euro
Euro
Euro
forints
Krona
Euro
Euro
Yen
Won
N/A
$US
(converted)
Euro
$NZ
Kroner
zloty
Euro
Euro
Euro
Krona
45,000
2,250
0
5,000
25,000
3,319
60,000
0
hourlyrateof
SwissFrancs
100400
Lowest$AU
Highest$AU
25,000
25,000
2,404
0
48,071
0
51,703
51,703
6,286
0
0
0
0
4,807
2,163
23,689
0
12,819
6,286
0
0
0
0
160,237
2,163
71,066
0
12,819
4,807
96,142
0
0
0
0
0
0
10,960
10,960
24,036
1,789
0
1,954
12,018
5,318
2,452
0
72,107
1,789
0
1,954
40,059
5,318
96,142
0
106424per
hour
5,299
Conversion rates obtained from XE Universal Currency Converter <http://www.xe.com/ucc/>

on 12 December 2009. Statistics from Davies, Merger Control 2010, above n 45, except the
UK figures which have been amended to reflect fee increase on 1 October 2009: see
Enterprise Act 2002 (Merger Fees) (Amendment) Order 2009.
Chapter8|Page395
Turkey
UK
USA
0
30,000
45,000
0
90,000
280,000
Lira
Pounds
$US
0
53,447
49,320
0
160,340
306,883
The relative fees, by size, are represented in Figure 8.10.

FIGURE 8.10 RELATIVE FILING FEES IN OECD JURISDITIONS 79
Switzerland
NewZealand
Poland
Greece
Slovakia
CzechRepublic
Mexico
Ireland
Australia(formal)
Portugal
Austria
Canada
Hungary
Netherlands
Spain
Italy
Germany
UK
USA
0
50000
100000
Highest$AU
79
150000
200000
250000
300000
Lowest$AU
Conversion rates obtained from XE Universal Currency Converter <http://www.xe.com/ucc/>

on 12 December 2009. Statistics from Davies, Merger Control 2010, above n 45, except the
UK figures which have been amended to reflect fee increase on 1 October 2009: see
Enterprise Act 2002 (Merger Fees) (Amendment) Order 2009. Switzerland imposes a
maximum fee based on an hourly rate and therefore cannot be represented in the chart.
Chapter8|Page396
It has been estimated that, cumulatively, filing fees represent approximately 19%
of external merger costs for a typical transnational merger.80 While for large
mergers this sum will normally comprise only a very small percentage of the
overall value of the merger and may be relatively easily absorbed, for smaller
transactions, which are likely to become increasingly transnational in impact,81
the cost of filing in multiple jurisdictions will occupy a significantly larger
proportion of the value of the proposed merger,82 particularly where flat fees are
adopted,83 and may effectively subsidise the additional costs associated with
reviewing more complex transactions.84
The appropriateness or desirability of filing fees is one area about which there
remains no international consensus and, although fees might not always be
considered large by reference to the relevant transaction value, and might not
provide any serious deterrent against merging,85 parties have raised concerns
about the increasing cost of merger filing fees that apply to multinational
transactions.86
(b) Compliance with information requirements
Although filing fees can be significant, particularly for relatively small mergers,
costs associated with complying with information requests may be significantly
higher.87 Mandatory pre-merger notification systems are designed to place the
80
81
82
83
84
85
86
87
PriceWaterhouseCoopers, above n 25.

For example, high technology industries frequently transcend national borders, even if they
dont have any large physical operations.
ICPAC Final Report, above n 5, 92, observing that although filing fees may account for only
a tiny fraction of the total cost of a large transaction, multiple filing fees may impose
relatively significant costs on smaller transactions.
ICN, Merger Notification Filing Fees, above n 63, 7, observing that some smaller business
view flat fees as unfair because they impose a proportionally higher burden on smaller firms
(and perhaps smaller transactions).
See, eg, ICN, Merger Notification Filing Fees, above n 63, 7.
ICN, Merger Notification Filing Fees, above n 63, 16.
PriceWaterhouseCoopers, above n 25, 21. Many of these costs were canvassed in more
detail in chapter 4. See also Pfunder, above n 63 and Richard Burnley, 'An Appropriate
Chapter8|Page397
onus on the party holding the relevant information to divulge it, rather than
requiring regulators to seek it out and the cost of doing so can be substantial,
even at initial stages of an investigation and even for relatively simple
transactions.88 In addition to the information requirements themselves,
differences in customs, formalities, languages, holidays, and filing deadlines all
increase the likelihood of delay, expense and filing error.89
In many OECD jurisdictions the cost of compliance with information requirements
has, at least for those mergers that do not raise serious competition concerns,
been mitigated through the introduction of early termination procedures90 or the
increasing use of stage 1 screening applications91 which now typically, but not
always, impose less onerous information requirements, and consequently less
compliance costs, than is required for a detailed merger review. Nevertheless,
base information requirements are often still considerable, and include
information about markets, competitors, customers and suppliers, and market
entry conditions in each of the markets in which the merging parties operate.92
This will normally require parties to engage economists and industry experts and
to sift through thousands or even millions of records for relevance and
privilege.93 As a result, although depth of information requirements and time
88
89
90
91
92
93
Jurisdictional Trigger for the EC Merger Regulation and the Question of Decentralisation'
(2002) 25 World Competition 263, 265-266.
See ICN, Report of Costs and Burdens, above n 32, 16, quoting Charles Biggios testimony
to the ICPAC Advisory Committee on 26 February 1998, p 84 Transcript, observing that
[s]imple transaction costs around the world can be quite staggering. Many times even
simple transactions require numerous duplicative filings.
Paul, above n 2.
In some jurisdictions early termination requests, which allow parties to consummate a
merger despite the stipulated period of delay not having passed, are available. For
example, in the US in the 2008 fiscal year, of 1,726 transactions notified, 1,385 included
requests for early termination and 1,021 of those requests were granted: FTC and DOJ,
Hart-Scott-Rodino Annual Report Fiscal Year 2008, above n 48, Appendix A.
Most jurisdictions, including the US and EU, now provide for a two stage process designed
to approve mergers raising no concerns early before they are subjected to significant delay
or hefty compliance costs. See Appendix 1.
Wilson, above n 26, 46.
Christine A Varney, 'Procedural Fairness' (Paper presented at the 13th Annual Competition
Conference of the International Bar Association, Fiesole, Italy, 12 September 2009). Varney
Chapter8|Page398
taken for review might be limited where investigations are terminated at the first
stage of the review process, the time and expense associated with preparing the
initial notification will often still be substantial. To a large extent this cost may be
unavoidable given the increasing complexity of merger analysis.94 This is
because the level of market information required in most jurisdictions reflects the
extensive data requirements needed for a determining accurate market definition,
crucial to any initial assessment of the likely competitive impact of a merger.95
Information costs are significantly more substantial for transactions raising initial
anticompetitive concerns and requiring detailed review by the regulators.96 In
such a case the PMN process can cost millions of dollars and delay a transaction
for months, even years.97
The cost becomes more considerable again when multiple notifications are
required. Some of the cost of multiple notification can be rationalised as a result
of overlapping requirements, such as global sales statistics and general industry
information and, and where regulators cooperate, parties may be able to give
evidence simultaneously, thereby reducing some duplication and associated
expense. Nevertheless, much information still needs to be tailored to specific
local requirements which are often complex and technical.98 Consequently, a
94
95
96
97
98
further notes that the age of electronic records has made this task enormously expensive
and time-consuming for parties.
This complexity stems in part from greater recognition of economic principles and analysis.
:William J Baer, Twenty Years of Hart-Scott-Rodino Merger Enforcement: Reflections on
Twenty Years of Merger Enforcement Under the Hart-Scott-Rodino Premerger Notification
Program (1997) 65 Antitrust Law Journal 825.
Global Economy (2006) 74-75 and Baer, above n 94.
In the United States, the HSR statute only permits one additional request for information (the
second request) and, as a result, an investigation extended by the issuance of a second
request filing typically requires a significant investment of FTC resources and the parties
involved: Federal Trade Commission, Performance and Accountability Report: Fiscal Year
2008 (2008) 58.
See, in particular, Rowley, Wakil and Campbell, above n 5, 9-10.
See, eg, Pfunder, above n 63, Baer, above n 94 and Burnley, above n 87, 265-266.
Chapter8|Page399
deep familiarity with different legal systems99 is required, invoking the need for
local experts in most cases.
One potentially significant cost of multiple review lies in compliance with
translation requirements.100 Although ICN recommendations have led to some
reduction of translation requirements for some of the more peripheral documents,
core documents, including the notification itself, will frequently still need to be
submitted in a specified language. For example, parties to the proposed AlcanPechiney-Alusuisse merger were required to make notifications in Czech,
English, German, Polish, Portuguese, Russian, Spanish and Turkish.101
These requirements, some substantive and some technical,102 all continue to
make a multi-jurisdictional transaction a complex, expensive and time-consuming
process'.103
Internal and resource costs
Significant costs are also incurred internally. Most significantly, compliance with
notification requirements place a drain on executives time and productivity,104
including compiling information,105 attending meetings and giving evidence at
hearings.
99
100
101
102
103
104
105
Burnley, above n 87, 265-266. [footnotes omitted]. See also ICN, Report of Costs and
Burdens, above n 32, 12, noting that this will frequently require retention of local counsel
which can be made more complicated by the fact that, in many jurisdictions, few attorneys
may be experienced in competition law. See also ICPAC Final Report, above n 5, 92.
ICN, Report of Costs and Burdens, above n 32, 18 (quoting Michael Blechmans ICPAC
testimony on 3 November 1998, transcript at 54-57).
See Rowley and Wakil, above n 24, 8 and Jacques Bougie, Reflections on the Merger Task
Force at the Turn of the Millennium: The Requirement for Convergence of Multijurisdictional
Merger Review Systems in International Bar Association, EC Merger Control: Ten Years On
(2000) 73-81.
See Chongwoo and Shekhar, above n 6, 2.
ICN, Report of Costs and Burdens, above n 32, 13.
Ibid 18 (quoting Michael Reynolds testimony to ICPAC on 3 November 1998, transcript at
70).
Chapter8|Page400
Executives time and productivity lost due to a protracted investigation (or series
of investigations) takes a heavy toll on the parties to the transaction. In each
jurisdiction where some form of compliance is required, senior officers of the
companies involved will have to spend many hours conducting, coordinating, and
supervising the search for financial and market information that will have to be
produced to each of the regulating authorities involved. The senior officers will
also likely have to make themselves available to counsel and to the authorities for
interviews and other information gathering activities, which distract the senior
officers from the business of the firm. ... loss to the company of the executives
time and productivity will compound with each follow up request propounded by
the regulating authorities.106
These costs are difficult to quantify in monetary terms and can be highly variable,
depending on the nature of the particular transaction involved, although there is a
clear correlation between the complexity of the merger and the executive time
consumed in compliance.107
In addition, physical resources are expended in producing documents and
making multiple copies. For example, the US FTCs simultaneous investigation
of the proposed dual-listed company alliance between the Royal Caribbean and
Princess cruise companies and the hostile tender offer for Princes by the Carnival
cruise company, involved the production of approximately 2,000 boxes of
documents, in addition to interviews and hearings, and resulted in an FTC
recommendation to close the investigation.108
These kind of intensive information obligations consume paper resources and
associated energy expenditures, transportation and storage costs and can
impose both a significant economic cost on parties (and the authorities) and a
related environmental cost.
106
107
108
ICPAC Final Report, above n 5, 93 (quoting Kobak Submission at 721-22).

See Joseph J Simons, Merger Enforcement at the FTC (Keynote Address to the Tenth
Annual Golden State Antitrust and Unfair Competition Law Institute, Antitrust and Unfair
Competition Law Section of the State Bar of California, Santa Monica, California, 24 October
2002).
Chapter8|Page401
In some jurisdictions this cost has been partially mitigated through acceptance of
electronic filing of certain documents, but in many cases physical documents
must still be produced.
Delay
In addition to the more direct and quantifiable costs discussed above, in most
cases PMN will delay, often significantly, the consummation of a planned
merger.109
Whether delay results from procedural overload or duplication, or from the
sincere regulatory pursuit of [a] theory of competition, the additional time spent in
the regulatory process may be the largest and most important transactions cost
of all and the one that thwarts the most potentially procompetitive
transactions.110
There are two key sources of delay. The first relates to variations on the time at
which notification may be made. These asynchronous triggering events111 can
cause significant and unnecessary problems112 and may prevent realisation of
synergies that would otherwise be possible where mergers are reviewed in
multiple jurisdictions, such as coordination between jurisdictions, as
demonstrated in Figure 8.11.
109
110
111
112
Where multiple filings are required, delays can be considerable, with the average duration of
review for a merger subjected to multiple review calculated at approximately seven months:
Chongwoo and Shekhar, above n 6, 2. See also ICN, Report of Costs and Burdens, above n
32, 4, Frederick G Hilmer, Mark Rayner and Geoffrey Taperell, National Competition Policy
(Report by the Independent Committee of Inquiry, Commonwealth of Australia, 25 August
1993) (Hilmer Report) 83, Baer, above n 94.
Rowley and Wakil, above n 24, citing Daniel Cooperman, Senior Vice President, General
Counsel and Secretary Oracle Corporation, Testimony before the Antitrust Modernization
Commission (8 November 2005).
ICN, Report of Costs and Burdens, above n 32, 17 (quoting Donna Patterson testimony on
11 September 1998, transcript at 100) claiming that it is whether you have to file, and then
lining up all the time frames that are the tricky problems.
Chapter8|Page402
FIGURE 8.11 TIME TRIGGERS FOR FILING
Figure 8.11 makes clear that, in a non problematic merger, if country A permits
notification at any stage after good faith intent agreement, but countries B and C
require more certainty before notification may be made, and the review by each
takes approximately the same time, then the length of delay in practice might be
doubled, or more.
To a large extent, this source of delay has been removed as a major concern for
parties, with most jurisdictions now allowing notification at early stages of a
proposed merger, facilitating coordinated reviews between jurisdictions.
However, even within the OECD, Finland, Greece, Hungary, Ireland and Portugal
all require notification within a relatively short period of a nominated event, such
as a decision to merge or publication of a public bid.113
The second, and predominant, source of delay is the review process itself. As
most jurisdictions require that parties refrain from consummating a merger prior
to their decision, or for the duration of a nominated review period, the time taken
for review may delay realisation of merger efficiencies,114 reduce the value of the
transaction115 or, in extreme cases jeopardise the transaction itself.116 This delay
can be exacerbated by the absence of strict deadlines and by lengthy review
113
114
115
116
The timeframe for each is: Finland (7 days), Greece (10 days), Hungary (30 days), Ireland
(30 days) and Portugal (7 days). See also Appendix 1.
See chapter 4 for further discussion of the cost of delay.
See, eg, Burnley, above n 87, 265.
Ibid 265-266.
Chapter8|Page403
periods.117 Even where strict deadlines exist, the deadline clock will frequently
be stopped until information requests are complied with, which may take many
months, and other stop-the-clock triggers may generate further delay.
In some cases the delay will not be significant. For simple mergers, requiring
notification, clearance at an early stage may not significantly delay the conclusion
of the merger, if at all. However, in the majority of cases there will be some level
of delay that directly results from the PMN process and this will almost always be
the case where investigations proceed to a second stage analysis.118
At least where the proposed transaction is pro-competitive, the 'opportunity' costs
attributable to delay119 can at times be more significant than compliance with
information requirements120 and have been estimated at costing 'upwards of
US$1.5 billion a years' for 250 transactions, or 'US$5.6 million per transaction'.121
The time sensitive nature of most mergers122 also means that delay may, at the
extreme, cause parties to abandon the transaction.123 This is even more likely
where the merger relates to a high-technology industry, such as electronics,
computers or software, with a very short life cycle. 124
Where multiple jurisdictions review a merger then, although delay is concurrent
rather than cumulative, at least where the notification time trigger is the same, the
117
118
119
120
121
122
123
124

See Chongwoo and Shekhar, above n 6, 385 at 387 discussing possible causes of delay.
See, eg, Sokol, Monopolists Without Borders, above n 13, 60.
See ICPAC Final Report, above n 5, 93, noting that during the time that deals are delayed,
the parties to a transaction lose the savings, efficiencies and synergies (assuming there are
any) that induced their respective business decisions to deal in the first place, and the
economy is denied whatever competitive benefits would result (quoting Sims and Herman,
above n 25, 885-886). see also Alexandr Svetlicinii, 'Competitiveness and Competition:
International Merger Control from the Business Prospective' (Paper Paper presented at
th
Economic Integration, Competition and Cooperation, 6 International Conference, Opatija,
19-20 April 2007) 7.
Ibid. See also Sokol, Monopolists Without Borders, above n 13, 60 and Hunt, above n 7,
155.
ICN, Report of Costs and Burdens, above n 32, 13
Chapter8|Page404
delay experienced will be commensurate with that imposed by the slowest

jurisdiction.125 This is demonstrated in Figure 8.12.
FIGURE 8.12
DELAY RESULTING FROM MULTIPLE MERGER REVIEWS
The more jurisdictions that review the merger, the more likely that a single
jurisdiction will delay consummation. For example, even where each jurisdiction
imposes the same maximum time frame for review, the more jurisdictions
involved in reviewing the transaction, the higher the probability that the delay
incurred will approach the maximum stipulated time frame.126
In practice, there is considerable variation in time permitted for review, as
highlighted in Figure 8.13:
125
126
As a result multibillion dollar transactions can, and have, been delayed pending approval by
jurisdictions where the companies presence was insignificant: Paul, above n 2.
See, eg, Chongwoo and Shekhar, above n 6, 2, relying on the ICN, Report of Costs and
Burdens, above n 32.
Chapter8|Page405
FIGURE 8.13 MERGER REVIEW PERIODS IN OECD COUNTRIES 127

Turkey
Australia(informal)
Poland
Canada
Australia(formal)*
Italy
Mexico
Greece
Denmark
Portugal
Norway
NewZealand*
Spain
Iceland
Netherlands
USA
Korea
Japan
Ireland
Germany
Sweden
France
EU
Switzerland
CzechRepublic
Slovakia
Austria
Hungary
Belgium
UK*
Finland
0
127
50
100
150
200
Stage1(standard)
Stage1(additional)
Stage2(presumptivemaximum)
Stage2(additional)
250
300
The timeline indicated in the X axis represents days. Statistics based on legislation and/or
guidelines as set out in Davies, Merger Control 2010, above n 45 (with the exception of
Canada, updated based on recent legislative changes). Some statistics are less clear than
others owing to a lack of transparency of predicted timeframes in some cases. An asterisk
represents a jurisdiction in which notification is voluntary. Stage 1 (standard) refers to the
expected outer deadline for a stage 1 decision; stage 1 (additional) refers to additional time
Chapter8|Page406
This table represents only those deadlines imposed formally by legislation or

which are internally imposed by agency guidelines. It does not consider stop the
clock activity, which may delay the review for many months, such as compliance
with information requirements (particularly between a first and second stage
review).128 It is also restricted to regulatory review periods. For those
jurisdictions in which the regulators have no power to block a merger and require
judicially imposed injunctions, significant additional delays will be imposed by the
court system. Where appeals are involved delay can amount to several years.
However, largely for this reason,129 it is only very rarely that parties defend their
mergers in court, with the vast majority of mergers challenged by regulators being
abandoned or resolved through merger remedies.
Even where court challenges are not involved, the total time taken for the review
of large transactions will be considerably greater than that represented in Figure
8.13, with the average duration of review for a merger subjected to multiple
review calculated at approximately seven months.130
Uncertainty
In addition to direct costs, multiple reviews and associated delay can also lead to
uncertainty.131 As merger review always involves some subjective predictions
128
129
130
131
permitted for authorities to complete a stage 1 assessment. Stage 2 (presumptive

maximum) also refers to the presumptive outer limit for an in-depth review (leaving aside
stop-the-clock factors) and Stage 2 (additional) refers to additional time regulators might be
able to obtain to conclude their review.
Because of different uses of stop-the-clock mechanisms, different workloads and agency
efficiencies, the theoretical timeframe for review might also give the false impression that
some jurisdictions are significantly more efficient at dealing with merger reviews than others.
For example, while some impose onerous information requirements and may frequently
make use of stop-the-clock mechanisms, others might routinely complete the review
process much sooner than the deadlines permit.
See chapter 4, above.
Chongwoo and Shekhar, above n 6, 2 relying on the ICN, Report of Costs and Burdens,
above n 32.
See A Neil Campbell and Jeffrey P Roode, McMillan Binch, International Mergers: The
Highest Common Denominator Effect of Cross-Border Divestitures and Licensing Remedies
Chapter8|Page407
about the future, some level of uncertainty will exist even where only a single
reviewing jurisdiction is involved. However, the level of uncertainty will increase
as the number of reviewing jurisdictions mount.132
In some cases, uncertainty might cause no identifiable loss damage to the
parties. In other cases, however, it might allow speculators and rival bidders to
cash in on the entrepreneurial insight of the notifying firm, while it awaits
clearance from the regulator,133 might enable competitors to raid customers and
staff134 or, at its most extreme, might cause a transaction to be abandoned.
Divergent outcomes
Where multiple reviews are conducted with respect to the same conduct, the
potential for conflicting outcomes arises with no current mechanism for its
resolution.135 Divergent outcomes may sometimes simply reflect different
approaches to the law or its application136 or result from the different market
impact felt in each jurisdiction, or a combination of both. The potential for conflict
is not necessarily costly in itself, and, at least for the vast majority of mergers that
raise no competitive concerns, it is generally accepted as part of the cost of
acting globally in a system of sovereign nation states.
Where reviewing agencies do reach different decisions, in some cases it will be
possible for those different outcomes to be accommodated by appropriately
132
133
134
135
136
(Aug/Sept 1997) Global Competition Review quoted in ICPAC Final Report, above n 5, 53.
See also Burnley, above n 87, 266.
See, eg, Sokol, Monopolists Without Borders, above n 13, 60-61.
Chongwoo and Shekhar, above n 6, 1 . ICN, Report of Costs and Burdens, above n 32, 13.
ICN, Report of Costs and Burdens, above n 32, 13 . See also Sokol, Monopolists Without
Borders, above n 13, 60-61.
See, eg, Stephen G Corones, The Treatment of Global Mergers: An Australian Perspective
(2000) 20 Northwestern Journal of International Law and Business 255, 282 and Burnley,
above n 87, 265-266.
See Eleanor M Fox, 'GE/Honeywell: The US Merger that Europe Stopped - A Story of the
Politics of Convergence' in Eleanor M Fox and Daniel A Crane (eds), Antitrust Stories (2007)
331, 356-357 noting that [a]nticompetitive and efficient are not self-defining terms
Nations do not agree on what is anticompetitive.
Chapter8|Page408
confined merger remedies and,137 at least where they are designed to reduce
local anticipated competitive harm, are not a leading cause of concern for parties.
The most significant cost occurs where inconsistent remedies are imposed which
extend beyond those necessary to remedy the competition concerns identified
and which generate negative externalities by impacting on the ability of firms to
merge beyond the reviewing jurisdiction.
Example
A wishes to merge with company B and the merger would have a significant
economic impact in both countries X and Y, each of which adopt identical merger
laws, procedures and analytical approaches, but both of which focus on local,
rather than global, market effects. In country X the merger is pro-competitive
because there is a significant amount of local market competition. In country Y the
merger is anti-competitive because the local market is concentrated138 and/or the
effects of the merger are felt more directly (because, for example, the bulk of
goods to be produced by the merged entity will be supplied in country Y).
Divergent outcomes in this example would not be a product of different substantive
approaches to merger regulation but would reflect the fact that the same conduct
produced different market impacts in different countries. Where Y is able to
impose behavioural or structural remedies designed to alleviate anti-competitive
effects in its own country, without significantly impacting on the viability of the
transaction with respect to country X, the cost of this divergence to parties cannot
be considered unreasonable. However, the cost of that divergence can be
considered disproportionately high if country Y imposes remedies that prevent or
limit realisation of benefits with respect to country X,139 or which effectively prevent
the merger proceeding at all.
137
138
139
Christine A Varney, Coordinated Remedies: Convergence, Cooperation, and the Role of

Transparency (Speech delivered to the Institute of Competition Law, New Frontiers of
Antitrust Conference, Paris, 15 February 2010).
See, eg, the proposed acquisition by Coca-Cola Company of Cadbury Schweppes
beverages, which was challenged in Australia, with Cadbury Schweppes David Kap-pler
noting that the Australian reaction was unique because of the small market share of Cokes
biggest rival in Australia: Aussie Block on Cadburys Coke Deal, The Evening Standard,
London, 8 April 1999. The proposed acquisition in Australia would have seen Cokes share
of the carbonated soft drink market increase from 65% to approximately 75% and the ACCC
considered that this would potentially give the Coke business control of the carbonated soft
drink market in Australia: Australian Competition and Consumer Commission, ACCC
Opposes the Coca-Cola/Schweppes Acquisition (Media Release MR 35/98, 8 April 1999)
See ICPAC Final Report, above n 5, 52: Such outcomes rarely, if ever, occur.
Chapter8|Page409
While the possibility of clashes increases as more regimes adopt merger review
processes,140 the likelihood of clashes, particularly between OECD jurisdictions,
is continuing to be reduced as countries move toward common goals, substantive
laws, adopt similar analytical approaches and cooperate in relation to the
development of merger remedies. As a result, such conflicts occur rarely.141
Jurisdictions cooperate in vetting international mergers. In 99.9% of cases,
they see eye-to-eye on the outcomes of investigations, even if nuances of
analysis differ. The authorities share their analyses, and they listen to the
concerns of one another. The range for clashes narrows as the competition
authorities of the various nations intensify their communications with one another,
both regarding abstract principles and regarding laws and analysis as applied
to particular cases.142
Consequently, although divergent outcomes can be costly for parties, a

disproportionate amount of attention is often placed on the possibility of divergent
outcomes for merger review143 given the infrequency with which such differences
occur.
Cost of agency error
Parties also experiences costs where agencies make errors that prevent procompetitive mergers proceeding.144 These are related to the costs associated
with divergent outcomes and can affect economic efficiency, growth and
development.145
140
141
142
143
144
145
See Jonathan Galloway, Convergence in International Merger Control (2009) 5(2) The
Competition Law Review 179, 179-180.
See, eg, ICPAC Final Report, above n 5, 52, which also acknowledges that different
outcomes are not necessarily inconsistent.
Fox, GE/Honeywell, above n 136, 356.
See, eg, Paul, above n 2, who claims that the possibility of conflicting decisions is very
troubling. See also Giannino, above n 3, generally and specifically at 273.
These are referred to as type I error costs. See Campbell and Rowley, above n 7, 309.
Sokol, Monopolists Without Borders, above n 13, 59-60. There is a cost associated with
failing to appropriately detect and prevent mergers that would significantly impact on
competition, or of ex post review, detection and unscrambling of mergers consummated in
the absence of an effective screening process.
Chapter8|Page410
8.2.3 The cost to third parties

Third parties, such as affected competitors and customers, might also directly
experience costs, including making submissions to regulators in relation to a
proposed merger or giving evidence in response to requests from the
regulators.146
In most cases this cost will not be onerous or unreasonable, but if third parties
receive multiple requests from different reviewing authorities to give evidence
with respect to the same proposed transaction, this cost could quickly escalate.
The cost will, however, be minimised where authorities cooperate in obtaining
and sharing third party evidence.
In rarer cases third parties might litigate to challenge the validity of a merger
under the relevant substantive law, although the cost of such litigation is often
prohibitively high.147
8.2.4 The cost to authorities
In addition to business costs, there are also significant burdens imposed on
regulators in terms of time and resources. Although ultimately funded by the
taxpaying public or by parties through filing fees,148 these costs are initially
incurred directly by the regulators.149 These costs are difficult to isolate and
146
147
148
149
See PriceWaterhouseCoopers, above n 25, 18. This study did not examine these indirect
costs of merger review.
For example, in neither Australia (in relation to informal clearance) and the US does the
decision of the competition authority not to challenge a merger prevent a third party
mounting a legal challenge.
See ICN, Merger Notification Filing Fees, above n 63, 5
Chongwoo and Shekhar, above n 6, 3. See also ICPAC Final Report, above n 5, 45,
observing that the number of mergers reviewed in the United States with international
implications has increased significantly during the last few years.
Chapter8|Page411
quantify in terms of agency budgets and vary considerably for different

mergers,150 but include:
The cost of advising parties on the notifiability of transactions.
The cost of monitoring markets for merger activity that has not been
notified.151
The cost of reviewing initial notifications and determining whether to

further investigate their legality. 152 In some cases this might involve
consultation with other reviewing agencies.153
The cost of conducting in-depth investigations, including:

o
Gathering evidence from merging parties and third parties (and

storing that evidence);
Reviewing thousands, sometimes millions, of documents;154
Coordinating reviews with other agencies;
Conducting economic analysis, including through merger

simulations.
150
151
152
153
154
The cost of formulating a decision and/or initiating court proceedings.
For example, the UK Competition Commissions costs of reviewing twelve mergers referred
in 2002 and 2003 varied from 262,000 to 524,000 per case: ICN, Merger Notification Filing
Fees, above n 63, 5. Fees charged by authorities in some jurisdictions might serve as a
vague proxy for total merger enforcement costs, (on this basis has been estimated that
average notification costs over multiple jurisdictions to be as much as 3.28 million euros):
see Chongwoo and Shekhar, above n 6, 19.
FTC, Performance and Accountability Report 2008, above n 96, 60: the FTC continues to
devote attention to the identification of unreported, usually consummated, mergers that
could harm consumers.
In the United States alone, the DOJ and FTC receive between 4500-5000 notifications
annually. Chongwoo and Shekhar, above n 6, 3 fn 6 referring to R W Tritell, International
Aspects of United States Merger Review Policy, Federal Trade Commission, Key Speeches
and Presentations.
For example, in the United States initial determination must be made about whether the
clear a merger to the FTC or the DOJ for further investigation. In Europe, determination
must be made about whether the one-stop-shop can be used that is, whether the merger
in fact has a Community Dimension.
See Varney, Coordinated Remedies, above n 137.
Chapter8|Page412
Although, as observed in Figure 8.7, the average agency cost of reviewing

transnational mergers should normally decrease when multiple agencies are
notified,155 such mergers impose a greater regulatory cost globally. The
reduction in average agency cost can occur in cases of regulatory cooperation,
which may prevent or reduce duplication in the gathering of evidence gathering,
including hearings involving parties and third parties.156 There are, however,
some additional costs associated with reviewing a transnational merger, including
the cost of cooperation itself. For example, resources are expended in meeting
with other regulators sometimes including travel to another country so that in
some cases an individual regulators costs might even increase, but the average
cost to all regulators who cooperate in relation to the review of transnational
mergers should decrease.
8.2.5 The cost to the public
The cost to the consumer and taxpaying public of merger review takes a number
of different forms:
Allocation of taxes to fund agencies.157
Pass-on transaction costs from parties.
Type I error (over-regulation) which prevents the realisation of benefits

associated with pro-competitive mergers.158
Type II error (under-regulation) which allows mergers with anticompetitive effects.159
155
156
157
158
This assumes the merger is equivalent in size to one required to be notified only
domestically.
interested regulators. Although there are costs associated with sharing information between
regulators, these are outweighed by the costs savings achieved through information sharing.
This might take the form of additional taxes or reallocation of tax dollars from activity that
might be preferred by consumers.
See Sokol, Monopolists Without Borders, above n 13, 59-60 and Hunt, above n 7, 153.
Chapter8|Page413
Deterrence160 or delay of pro-competitive merger activity161 which might

delay innovation or the realisation of cost savings that might otherwise
flow from merger-generated efficiencies.162
Allocation of resources from other enforcement activity which might

produce greater benefits for consumers.163
The cumulative cost to the public is highly variable, depending, in part, on the
level of competitive benefit, or detriment, that any given merger is likely to
produce. Multiple reviews also increase the likelihood of Type I error; that is, the
probability that a competitively benign merger will be mistakenly blocked is
increased proportionately with the number of jurisdictions reviewing the
transaction. Conversely, however, the risk of Type II error is reduced where
more reviewing jurisdictions are involved; the more agencies that review a
merger, the less likely that an anti-competitive merger will escape undetected.
Additional complexities are generated by the nationalistic approach normally
taken to the assessment of a mergers competitive impact. Where one or more
reviewing states prohibit a merger based on considerations of only local
competitive effects, or as a result of considering national interest factors
159
160
161
162
163
There is a cost associated with failing to appropriately detect and prevent mergers that
would significantly impact on competition, or of ex post review, detection and unscrambling
of mergers consummated in the absence of an effective screening process. See chapters 3
and 4.
See generally J William Rowley and Omar K Wakil, 'International Mergers: Rowley and
Wakil, above n 24, 2.
See Campbell and Rowley, above n 7, 309, claiming that there is a cost to society where
merger review processes prevent procompetitive or benign commercial practices and
innovations, or when legal uncertainty about the scope or enforcement of competition laws
causes a firm to avoid or abandon such practices. Campbell and Rowley observe that these
chilling effects are difficult to estimate because they relate to beneficial activities which do
not take place (at 310).
This will, however, be off-set in part by deterrence of anti-competitive activity which limits or
removes the need for investigation of those mergers the net loss associated with
deterrence of pro-competitive mergers might, therefore, be reduced. This does note,
however, mean that the net cost cannot (or should not) be reduced or benefit increased.
At least where agencies are under-resourced, disproportionate allocation of funding to
merger review may re-direct enforcement resources away from other important enforcement
activity, such as cartel enforcement.
Chapter8|Page414
unrelated to competition law, a global welfare deficit may result,164 even if there
are some local welfare improvements.165
8.3 Analysis and Conclusion

Nationally, at least, law makers and regulators operate on the assumption that
the benefits both social and financial generated through their merger laws
and procedures outweigh the cumulative cost of the review and enforcement
process. While these assumptions are difficult to demonstrate empirically,166
some estimates suggest that this goal is comfortably achieved,167 so that net
global welfare is enhanced through the merger review processes.
It is clear, however, that, despite its benefits,168 the total costs involved in the
regulation of merger activity are substantial, both at national level, but also even
more acutely where mergers transcend national borders and are subject to
multiple substantive and procedural rules and regulations.169
Many of these transaction costs are rationally related to the efficient review of
transactions that have the potential to create appreciable anticompetitive effects
within the reviewing jurisdiction.170 There have been no detailed empirical
studies to suggest that costs impose a significant (if any) deterrence to merger
164
165
166
167
168
169
170
See Ezrachi, above n 49, 140, Wilson, above n 26, 45 and Budzinski, above n 130, 7.
See Budzinski, above n 130, 5-6.
See, eg, Sokol, Monopolists Without Borders, above n 13, 61, in particular fn 86, observing
that [s]ystematically proving [merger control regimes create more benefits than costs]
remains an academic challenge. In particular, social benefits, such as preventing
accumulation of wealth and associated political power, may not be able to be quantified in
useful monetary terms.
FTC, Performance and Accountability Report 2008, above n 96, 38 (estimating consumer
savings at $360 million for the 2008 fiscal year) and 70 (estimating consumer savings of
$805 million for the 2007 fiscal year). See also Federal Trade Commission, Performance
and Accountability Report: Fiscal Year 2009 (2009) 63, estimating consumer savings for the
2009 fiscal year at $791m. It is also estimated that in 2009 the US Federal Trade
Commission saved consumers approximately 21 times the amount of resources devoted to
the merger program: FTC, Performance and Accountability Report 2009, above n 167, 65.
See generally ICPAC Final Report, above n 5, 94-95.
Ibid 94-95. See also Corones, above n 135, 282.
ICPAC Final Report, above n 5, 94-95.
Chapter8|Page415
activity171 and the empirical evidence that does exist suggests the multijurisdictional merger review process imposes an average tax burden on parties
(based on the value of deals) of only 0.11%, although this tax burden is likely to
be disproportionately felt by smaller business.172
Nevertheless, while the corporate tax associated with transnational merger
review might, in many cases, be small in relative terms,173 it is apparent that the
growing incidence of multijurisdictional merger review is imposing unnecessary
costs in a large number of transactions that present little, if any, actual
competitive concerns'.174 Consequently, where it is possible to reduce or avoid
some of the identified costs without depriving society of associated benefits of
merger review,175 competition agencies have a responsibility to do so.176
Continuous efforts to reduce, and appropriately allocate, regulatory cost remains
in the interests of all involved or affected by the merger review process.177
It is to this end, that the following chapters consider possible options for reducing
or re-allocating the cost burdens identified above.
171
172
173
174
175
176
177
Even if the costs do not act as a significant deterrent to merger activity generally, especially
with respect to large transactions, they should still be minimised wherever possible: Andrew
White, 'Is there too much regulation of Mergers?' in Policy Directions for Global Merger
Review, a Special Report by the Global Forum for Competition and Trade Policy (1999) 133,
135.
As a result, multijurisdictional merger review might keep companies from attempting lowervalue mergers: see Hunt, above n 7, 153.
See, eg, Spencer Weber Waller, The Twilight of Comity (2000) 38 Columbia Journal of
Transnational Law 563, 575.
See Rowley, Wakil and Campbell, above n 5, 8, quoting ICPAC Final Report, above n 5, 95.
See also Wilson, above n 26, 45.
See, eg, Baer, above n 94.
Sokol, Monopolists Without Borders, above n 13, 60: See further Hunt, above n 7, 153.
See also Eleanor M Fox, 'Can We Control Merger Control? An Experiment' (1999) 10 Policy
Directions for Global Merger Review 79, 81.
Chapter8|Page416
PART V: OPTIONS FOR REFORM, PROPOSAL &

CONCLUSIONS
The ... incongruence of the borders of competitive interaction and

competition control is intuitively problematic.1
Despite an increasingly globalized economy and related increase in transnational

merger activity,2 geographically constrained national laws continue to govern
transnational mergers.3 As a consequence, despite the relatively high level of
convergence among OECD nations on the substantive laws governing anticompetitive mergers and of the appropriate economic approach to take for
merger analysis, the remaining differences,4 combined with the multiplicity of
review processes, increases compliance cost for business and for regulators, and
increases the risk of regulatory error or remedial externalities, with the result that
the current approach to regulating transnational mergers is sub-optimal from a
modern global consumer welfare perspective.
Rationalisation of the costs of multi-jurisdictional merger review is particularly
important because mergers are subject to regulatory intervention regardless of
the likelihood of the conduct infringing substantive law. Previous chapters have
Oliver Budzinski, The Governance of Global Competition: Competence Allocation in

International Competition Policy (2008) 26.
Although global merger activity slowed in 2009 as a result of the global financial crisis, the
slump followed a surge in merger activity and the pace of merger activity is expected to rise
into the future. Merger Activity Highest Since 2008, More Deals Predicted,
MoneyNews.com, 4 March 2010 <http://moneynews.com/InvestingAnalysis/Merger-ActivityHighest-Deals/2010/03/04/id/351594> at 18 March 2010
See Evidence to Antitrust Modernization Commission, Hearing on International Issues,
Washington DC, 15 February 2006 (revised 2 March 2006) (Eleanor M Fox) 7
See discussion of some key differences to enforcement approach in Daniel J Gifford, The
Draft International Antitrust Code Proposed at Munich: Good Intentions Gone Awry (1997) 6
Minnesota Journal of Global Trade 1, 3.
Chapter9|Page417
examined the benefits and limitations of the current approach to transnational

merger regulation and have highlighted the attendant costs.
As a consequence of the significant cost the current system imposes on benign
and even globally beneficial mergers, it is incumbent on governments and
regulating authorities to seek to minimise these costs and more efficiently
regulate merger activity where possible.
This part considers possible alternate approaches that might more closely
approach the optimal welfare standard. In particular, it will consider approaches
that might better reflect the reality of global markets and effects, including by
recognising and avoiding, as far as possible, duplicated compliance and by
minimising the prospect of conflicting national outcomes. Following this
examination, chapter 10 will make recommendations about the preferred future
direction of transnational merger regulation.
Chapter9|Page418
Chapter 9 Options for Reform

The problem that multiple notifications can cause to the merging firms
themselves for example the cost of multiple filing, the workload involved in
generating the data necessary for each filing, the delay involved in obtaining
clearances from numerous jurisdictions, the differing procedural and
substantive laws from one jurisdiction to another are obvious. One of the
major issues facing the world of competition law is to devise a sensible
mechanism for investigating and adjudicating upon mergers having an
international dimension in a way that minimizes the administrative burden on
business while at the same time ensuring that mergers do not escape
scrutiny which could have detrimental effects upon competition.1
9.1 Introduction
In the past few decades various proposals have been put forward for both
procedural and substantive harmonisation of transnational mergers.2 The focus,
at least at government and agency levels, has been on limited soft
harmonization through best practice recommendations3 or increased bilateral
cooperation between nations. Calls for more substantive action, such as
1
2
Richard Whish, Competition Law (6 ed, 2009) 802 [footnotes omitted].

For a discussion of some of the key recommendations see, for example, Richard Whish and
Diane Wood, Merger Cases in the Real World A Study of Merger Control Procedures
(OECD, 1994) (Whish/Wood Report) 12. See also Joseph Wilson, Globalization and the
Limits of National Merger Control Laws: Gaps in Global Governance and the Need for an
219-272, discussing and critiquing various proposals for transnational merger review.
Suggestions have ranged from establishing common notification forms, to agreeing on best
practices for merger review, to recommendations regarding thresholds: see generally J
William Rowley (ed), International Merger Control: Prescriptions for Convergence (2001).
See also ICPAC, 'International Competition Policy Advisory Committee to the Attorney
United States, 2000) 13: US should continue to support OECD efforts to further develop a
common framework for merger notification .
For example, US-EU Merger Working Group, Best Practices on Cooperation in Merger
Investigations (2002), Australian Competition and Consumer Commission and New Zealand
Commerce Commission, Cooperation Protocol for Merger Review (August 2006), ICN,
'Recommended Practices for Merger Analysis' (Merger Working Group 2008, amended
2009) and ICN, 'Recommended Practices for Merger Notification Procedures' (Merger
Working Group 2002, amended 2003, 2004, 2005, 2006).
Chapter9|Page419
establishing common filing forms for transnational mergers4 or the negotiation of

a multilateral treaty governing the regulation of such mergers have been ignored
or rejected.5 Additionally, much of the focus for increased cooperation or
harmonisation has extended to competition law generally, rather than merger
regulation specifically, although the increase in transnational merger activity in
the last two decades has led to a renewed interest in reducing the costs
associated with its regulation.
It is clear that, despite improvements in cooperative endeavours, the current
system of applying national merger laws to transnational activity produces both
over-regulation and under-regulation, as described in chapter 8, resulting in
duplication of process, increased delay, increased risk of Type I error6 and the
risk of divergent outcomes7 which, while rare,8 increase uncertainty9 and can
strain the trade relations between the countries involved.10 It also significantly
increases the cost for merging parties and regulators, a pattern likely to continue
as markets expand beyond the confines of national borders. In this respect, it is
5
6
10
See, eg, Whish/Wood Report, above n 2, discussed further below, and J William Rowley
and A Neil Campbell, 'Multi-Jurisdictional Merger Review - Is it Time for a Common Form
Filing Treaty?' in Policy Directions for Global Merger Review, a Special Report by the Global
Forum for Competition and Trade Policy (1999).
See generally Whish/Wood Report, above n 2 and Rowley and Campbell, above n 4.
The more agencies that review a transaction the more likely one of them will block a
competitively benign merger. Conversely, multi-jurisdictional merger review does reduce the
risk of Type II errors that is, it reduces the risk that an anti-competitive merger will be
allowed to proceed.
See, eg, Gustav P Chiarello, who observes that because the impact of a merger will be
different in each market parties should expect the substantive analysis to vary between
jurisdiction: cited in White & Case LLP, White & Case Global Merger-Control Survey Finds
Flood-Tide May Be Ebbing After Years on the Rise (Press Release, 16 January 2003) 2.
See generally ICPAC Final Report, above n 2. See also, PriceWaterhouseCoopers, 'A Tax
on Mergers? Surveying the Time and Costs to Business of Multi-jurisdictional Merger
Reviews' (June 2003) 26, where it is observed that even where substantive tests diverge,
[t]he economic issues raised by an in-depth review are normally similar across different
jurisdictions .
of Antitrust Conference, Paris, 15 February 2010) 4.
See, eg, Michael A Utton, International Competition Policy: Maintaining Open Markets in the
Global Economy (2006) 87 and Varney, Coordinated Remedies, above n 9, 4.
Chapter9|Page420
apparent that the current system is sub-optimal in achieving the goal of detecting
and preventing mergers likely to significantly reduce global modern consumer
welfare at the lowest practical cost to all affected parties.11
This chapter evaluates possible future directions in merger control that would, as
far as practical, maximise global modern consumer welfare,12 and thereby more
closely approach an optimal level for the regulation of transnational mergers.13
This requires consideration of mechanisms which, while not undermining national
sovereignty or ignoring the nationalistic tendency likely to influence competition
analysis under national law, also provide scope for consideration of competitive
harm beyond a single national border and within the greater global marketplace.14
A range of options will be considered, from the modest development of the
existing system of national laws, applied extraterritorially and supported by
cooperation and best practices guidance, through to the establishment of a
substantive international merger code that would be enforced by a supranational
body. The options presented are not mutually exclusive and an optimal merger
policy may be required to draw from several of these approaches.
11
12
13
14
David Snyder, 'Mergers and Acquisitions in the European Community and the United States:
A Movement Toward a Uniform Enforcement Body?' (1997) 29 Law & Policy in International
Business 115, 115: the current system of extraterritorial application of competition laws,
while beneficial from a purely competitive standpoint, is not optimally efficient for the world
market.
See generally Fox, Evidence to Antitrust Modernization Commission, above n 3, 8, who
urges that we contemplate maximizing world welfare.
See, ICN, 'Report on the Costs and Burdens of Multijurisdictional Merger Review' (Mergers
Working Group, Notification and Procedures Subgroup, November 2004) 20, quoting Joseph
Winterscheid who claims that an optimal policy will seek to minimize transaction costs and
burdens without reducing the public benefit and without compromising the ability of any
jurisdiction to enforce its own competition laws:. See also A Neil Campbell and J William
Rowley, 'The Internationalization of Unilateral Conduct Laws - Conflict, Comity, Cooperation
and/or Convergence?' (2008-2009) 75 Antitrust Law Journal 267, 268: Legal standards
should attempt to promote optimal economic outcomes by minimizing the aggregate costs
(public and private) of under-enforcement errors, over-enforcement errors (including chilling
effects), and compliance and enforcement activities.
See, eg, Fox, Evidence to Antitrust Modernization Commission, above n 12, 8, arguing that
we should devise methodologies that take account of antitrust harms beyond any one
nations borders.
Chapter9|Page421
9.2 Comprehensive International Code

9.2.1 Overview
The desirability of incorporating competition law principles into an international
agreement or code, supported by a supranational enforcement authority, has
been debated for decades. Calls for such a code have normally arisen in the
context of competition law generally and have usually sought to include very
general competition law obligations, designed predominantly to deal with cartel
activity and market access,15 rather than more specific substantive and
procedural obligations dealing with transnational mergers. Mergers present
unique challenges for competition law regimes, in that they are normally
accompanied by a mandatory ex ante review process, are time sensitive and
involve significant costs for pro-competitive and anti-competitive mergers alike.
It is, therefore, possible that the motivations behind incorporating general
competition law principles in an international code will not apply equally to
mergers. For example, while deterrence, detection and prosecution of hard core
cartel activity is likely to be improved whenever new countries develop new cartel
laws or enhance existing laws, the creation of new merger regimes serves to
significantly increase the cost of merger review. As a result, the benefits of a
general substantive code will not necessarily translate into significant cost
savings for the current merger review process, with costs principally attributable
to the ex ante review process, rather than any significant substantive
divergence.16
Nevertheless, it is clear that the uncertainty, delay and duplication inherent with
multi-jurisdictional enforcement of transnational merger activity17 might be
15
16
17
See, for example, Eleanor Fox, 'Toward World Antitrust and Market Access' (1997) 91
American Journal of International Law 1.
Snyder, above n 11, 116.
See ICPAC Final Report, above n 2, 3.
Chapter9|Page422
mitigated or avoided by the existence of a central law and regulatory authority on

mergers, so that an assessment of both the desirability and practicality of such an
option warrants further exploration. However, when making this assessment
efficiency trade offs will need to be monitored to ensure that the inefficiencies of
the current system are not simply replaced with different inefficiencies at a
supranational level.18
9.2.2 Previous attempts at producing an international code
For nearly a century, attempts have been made to develop binding competition
law rules at an international level.19 It is useful to briefly examine these proposals
and the reasons that they have failed before making an assessment of the merits
or otherwise of any future international code.20
Early attempts at an international agreement
The first attempt took place at the League of Nations Economic Conference in
1927,21 which sought some general regulation of monopolies. This attempt
failed, largely due to the significant divergence in policy goals then prevailing
between the US and the European nations.22
18
19
20
21
22
See, eg, John McGinnis, 'The Political Harmony of International Antitrust Harmonization' in
Richard A Epstein and Michael S Greeve (eds), Competition Laws in Conflict: Antitrust
Jurisdiction in the Global Economy (2004) 126, 127, warning that even if uncoordinated
national regimes are inefficient, it does not follow that an international regime will be more
efficient. See also John McGinnis, 'The Political Economy of International Antitrust
Harmonization' (2003-2004) 45 William and Mary Law Review 549 and David S Evans, Why
Different Jurisdictions Do Not (and Should Not) Adopt the Same Antitrust Rules (Working
Paper, 16 February 2009) 22.
See, eg, Damien Geradin, 'The Perils of Antitrust Proliferation - The Process "Decentralized
Globalization" of Antitrust and the Risks of Over-Regulation of Competitive Behaviour'
(2009) 10 Chicago Journal of International law 189, 189 and Daniel J Gifford, The Draft
International Antitrust Code Proposed at Munich: Good Intentions Gone Awry (1997) 6
Minnesota Journal of Global Trade 1, 1.
What follows is not an exhaustive list but highlights those attempts made at a government
level or which have received some significant support or traction.
See discussion in John Braithwaite and Peter Drahos, Global Business Regulation (2000)
187.
Ibid.
Chapter9|Page423
The next significant proposal occurred after World War II, with the attempt to
establish an International Trade Organisation (ITO).23 The Havana Charter,
which never entered force, would have contained provisions dealing with
restrictive trade practices which could have been regulated by the ITO.24
Although this attempt originated in the US, promoted by Presidents Roosevelt
and Truman,25 it was opposed by big business26 and, as a result, by the US
Congress and ultimately failed.27
A subsequent attempt by the UN Economic and Social Council to formulate a
restrictive business practices agreement was also rejected by the US.28
The Munich Group 1993 Draft International Antitrust Code
The next significant call for an international competition law agreement came in
the form of a Draft International Antitrust Code (DIAC), developed by a group of
competition law scholars,29 collectively referred to as the Munich Group,30 which
was submitted to members of the GATT in July 1993.31
23
24
25
26
27
28
29
See discussion in Geradin, The Perils of Antitrust Proliferation, above n 19, 193, Braithwaite
and Drahos , above n 21, 187, Gifford, Draft International Antitrust Code, above n 19, 1 and
Gary Hufbauer and Jisun Kim, 'International Competition Policy and the WTO' (2009) 54
Antitrust Bulletin 327, 328.
See Braithwaite and Drahos, above n 21, 187 and Eleanor M Fox, 'Competition Law and the
Agenda for the WTO: Forging the Links of Competition and Trade' (1995) 4 Pacific Rim Law
& Policy Journal 1, 2-3.
Braithwaite and Drahos , above n 21, 187.
See, eg, Gary Hufbauer and Kim, above n 23, 330.
Although 53 countries signed the Havana Charter, the rejection of the charter by the US
Congress prevented it from entering into force: see Braithwaite and Drahos , above n 21,
188. See also Geradin, The Perils of Antitrust Proliferation, above n 19, 193, F M Scherer,
Competition Policies for an Integrated World Economy (1994) 38 and Brendan Sweeney,
'Global Competition: Searching for a Rational Basis for Global Competition Rules' (2008) 30
Sydney Law Review 209, 210.
See, eg, Geradin, The Perils of Antitrust Proliferation, above n 19, 193 and Scherer, above n
27, 39.
The members of the group were Dr Josef Drexl, Professor Wolfgang Fikentscher, Professor
Eleanor M Fox, Dr Andreas Fuchs, Andreas Heinemann, Professor Ulrich Immenga, Dr
Hans Peter Kunz-Hallstein, Professor Ernst-Ulrich Petersmann, Professor Walter R Schluep,
Professor Akira Shoda, Professor Stanislaw J Soltysinski, Professor Lawrence A Sullivan:
Chapter9|Page424
The DIAC, if implemented would have committed members to enacting minimum

standards within their national laws,32 including with respect to merger laws and
procedures. Although referred to as a code, the reference to minimum
standards, with express permission for members to adopt stricter national rules,33
means that it may be more appropriately categorised as an international
agreement.34
To complement the proposed substantive law requirements, the DIAC would
have established an International Antitrust Agency (IAA)35 to operate within the
framework of the GATT and subsequent WTO.36 The IAA would have been
comprised of a President experienced in the field of national or international
antitrust law37 who would be assisted by an International Antitrust Council
comprising twenty members.38 The IAA would have powers, inter alia, to:
ask for individual competition law actions to be initiated by national

antitrust authorities;
30
31
32
33
34
35
36
37
38
Wilson, above n 2, 231. See further Chris Noonan, The Emerging Principles of International
Competition Law (2008) 45-46.
See further Wilson, above n 2, 231. Although the members of the group also referred to
themselves as the International Antitrust Code Working Group (see G Bruce Doern and
Stephen Wilks, Comparative Competition Policy: National Institutions in a Global Market
(1996) 316) they were widely referred to as the Munich Group as a result of the fact that the
study was first presented at the Max Planck Institute in Munich.
Joseph P Griffin, Foreign Governmental Reactions to US Assertions of Extraterritorial
Jurisdiction (1998) 6 George Mason Law Review 505, 508: In July 1993, a Draft
International Antitrust Code was submitted to members of the [GATT and was] intended
eventually to be open for acceptance by parties to the WTO. See also Doern and Wilks,
above n 30, 316: An independent study presented in July 1993 at the Max Planck Institute
in Munich advocated a draft international antitrust code including provisions for an
International Antitrust Authority and dispute settlement panels and see Gifford, Draft
International Antitrust Code, above n 19, 4.
See Gifford, Draft International Antitrust Code, above n 19, 25.
DIAC, article 2(2), reprinted in Gifford, Draft International Antitrust Code, above n 19, 33.
DIAC, article 19, reprinted in Gifford, Draft International Antitrust Code, above n 19, 60. See
further Griffin, above n 31, 231 and 234.
The DIAC was drafted prior to the establishment of the WTO; consequently it refers to the
MTO rather that the WTO.
DIAC article 19, reprinted in Gifford, Draft International Antitrust Code, above n 19, 60.
Ibid.
Chapter9|Page425
bring cases against national antitrust authorities before national courts

when the national authority failed to take appropriate measures;
sue private persons, including seeking injunctions, before national courts;
appeal decisions in national cases, even where not party to the original
proceeding; and
sue a party to the agreement whenever that Party was thought to have
violated its obligations under the Agreement.39
In addition to the IAA, the DIAC would have established an International Antitrust
Panel (IAP) to decide disputes. 40 The Panel would have consisted of members
with antitrust experience, appointed by the Contracting Parties for six year terms.
In addition to providing a forum for the IAA to bring actions against non-compliant
parties, Contracting Parties could themselves have brought an action against
another Party before the IAP, whenever they considered the other party in
violation of its DIAC obligations. Proceedings before the IAP would have been
governed by the Dispute Settlement Rules of the then proposed WTO. 41
In relation to mergers specifically, part three of the DIAC, entitled the Control of
Concentration and Restructuring,42 included both substantive and procedural
obligations for mergers having an international dimension.43 Substantively, the
DIAC provided minimum obligations, including requiring Contracting Parties to
prohibit concentrations which would create or increase the power of one or more
undertakings, either separately or jointly, to impede effective competition in the
relevant market. 44
39
40
41
42
43
44
DIAC article 19(2), reprinted in Gifford, Draft International Antitrust Code, above n 19, 61.
DIAC Part Three, articles 8-13, reprinted in Gifford, Draft International Antitrust Code, above
n 19, 41.
DIAC article 9(1)(a), reprinted in Gifford, Draft International Antitrust Code, above n 19, 43.
Chapter9|Page426
Procedurally, the DIAC provided for prior notification of mergers having an

international dimension and suspension of the proposed transaction for a period
of three months following notification, with the possibility of a further period of
suspension of three months.45 Such mergers would be required to be notified to
the national authorities of Parties affected by the transaction as well as to the
IAA. In relation to the form of notification, the DIAC required national authorities
to establish in their national law details of the information to be given in the
notification in accordance with a standardized form for notification and request of
information to be used by the International Antitrust Authority.46 If notified of a
merger, the IAA would have had the power to give recommendations to national
authorities47 and intervene by bringing action against a private person or
company before the relevant national courts, provided it did so within nationally
prescribed time limits.48
In an apparent attempt to promote global over national welfare, the DIAC would
also have obliged national authorities to consider the competitive structure of all
markets concerned, including actual or potential competition from abroad.49
However, as a partial concession to national interest, Article 12 of the DIAC
provided for an overwhelming public interest justification for mergers, to be
determined by a national body separate from the competition authority and
subject to the requirement that the decision would not unreasonably harm the
legitimate interests of other affected Parties.50
Where national authorities found concentrations did not meet the substantive
criteria in the DIAC they would have been obliged to issue a decision declaring
45
46
47
48
49
50
DIAC article 10(2)(a)(b), reprinted in Gifford, Draft International Antitrust Code, above n 19,
33.
DIAC article 10(1)(c), reprinted in Gifford, Draft International Antitrust Code, above n 19, 45.
DIAC article 11(1)(b), reprinted in Gifford, Draft International Antitrust Code, above n 19, 45.
Chapter9|Page427
that the concentration was permitted.51 If national authorities found that, following
modifications, the substantive criteria in the DIAC were not met, they would
similarly have been obliged to permit the merger, subject to reasonably
necessary conditions, provided those conditions did not require continuous
supervision.52 In addition, to avoid disputes between Contracting Parties, where
more than one national authority reviewed a merger, consent of them all would
have been required, failing which the IAA would have had the power to instruct
the national authorities on how to decide.53
Implementation of the DIAC would have involved radical reform to the prevailing
system of national merger regulation. In addition to the complexities and deferral
of power associated with the establishment of the IAA and IAP, the requirements
that national regulators be independent of Government,54 that authority be
conferred on a separate national body to determine whether an overwhelming
public interest existed to justify a merger and that a formal (and apparently
binding) decision be taken by national authorities on whether a merger should be
permitted or prohibited (which would appear to exclude the possibility of third
party participation), would have represented significant procedural departures
from the status quo. In addition, the requirement that national authorities permit a
merger not meeting the DIACs substantive test also appears internally
inconsistent with the minimum standard approach to substantive law, which
should have permitted countries to develop stricter merger tests.55
In addition, the DIAC was drafted using broad56 and ambiguous language57
which, while not inconsistent with language used in many countries, was not
51
52
53
54
55
56
57
DIAC article 11(2)(b), reprinted in Gifford, Draft International Antitrust Code, above n 19, 33.
DIAC article 17(1) , reprinted in Gifford, Draft International Antitrust Code, above n 19, 57.
See, eg, Gifford, Draft International Antitrust Code, above n 19, 21.
Ibid 5.
Chapter9|Page428
accompanied by the detailed guidelines58 and/or judicial and administrative

precedent which support and give greater certainty to those national laws.59
The greatest concerns, however, arose from the proposal to confer powers on
centralised authorities, comprised of appointed officials with long terms,60 which
generated fears of a misuse of power with no provision for recourse in the
DIAC.61 The need to restructure national authorities in many countries further
dimmed any hope that the DIAC would be implemented.62
For all of these reasons, the DIAC failed to garner wide support and has been
described as hopelessly flawed.63 Significantly, the DIAC was harshly criticised
by OECD representatives when presented at a meeting of the OECD in
December 1993.64 Inability to garner support among like-minded countries did
not bode well for its success at a more global level and the DIAC soon joined the
growing pile of discarded attempts at an international competition law agreement.
Calls for WTO action on an international code
Despite the lukewarm reception of the Munich Groups proposals, there remained
wide recognition of the benefits some increased agreement on competition law
could generate and, following the establishment of the WTO, attention turned to
that body as a forum for consideration of such proposals.65 This is at least partly
attributable to the fact that the reduction in public barriers to trade and market
58
59
60
61
62
63
64
65
Ibid 20, observing that uncertainty associated with s 7 of the Clayton Act had been resolved
through the merger guidelines.
See Gifford, Draft International Antitrust Code, above n 19, 20, noting that the drafters
appear to have employed open-textured language in the Code itself, while attempting to
confine its application by admonitions in the comments.
Ibid.
Ibid 25-27 and DIAC article 17(1).
Gifford, Draft International Antitrust Code, above n 19, 29. See also Wilson, above n 2, 46.
See, eg, Doern and Wilks, above n 30, 316, Scherer, above n 27, 92 and G Bruce Doern,
Towards an International Antitrust Authority? Key Factors in the Internationalization of
Competition Policy (1996) 9 Governance: An International Journal of Policy and
Administration 265, 279.
Snyder, above n 11, 116.
Chapter9|Page429
access brought about by the GATT, and subsequent WTO agreements had
highlighted the restrictive effects of private barriers to such access, with the result
that the symbiotic relationship between trade and competition became a regular
subject of intergovernmental discourse.66
In 1994, then US President Bill Clinton proposed that competition (along with
other new trade issues) be placed on the agenda for the next round of the
GATT/WTO.67 This was followed by more substantive calls for competition law
agreement within the WTO by the EU68 which suggested complementing the
existing WTO framework, which deals exclusively with the restriction of
international competition through state action, by introducing a world competition
code (preferably minimum standards) that would be enforced by WTO
mechanisms,69 with cross-border mergers to feature prominently. The EUproposed code would identify core competition rules or principles and
procedures, which could be adopted at the international level. 70 Similar calls
emanated from a number of academic commentators, including former FTC chief
66
67
68
69
70
Gifford, Draft International Antitrust Code, above n 19, 1, observing that the progressive
elimination of government-erected trade barriers has resulted in increased attention given
to privately erected barriers. See also Frederic Jenny, 'International Merger Control' in
Policy Directions for Global Merger Review, a Special Report by the Global Forum for
Competition and Trade Policy (1999) 91, 92 and Fox, Competition Law and the Agenda for
the WTO, above n 24, 9 and 14.
Fox, Competition Law and the Agenda for the WTO, above n 24, 8, citing The Presidents
News Conference with European Union Leaders in Brussels, 20 Wkly Comp Pres Doc 33
(11 Jan 1994) and Lionel Barber, Clinton Places Environment on Top in GATT, Financial
Times, 12 January 1994, 6.
Report of Group of Experts on Competition Policy in the New Trade Order: Strengthening
International Cooperation and Rules (Report COM(96)284 final, European Commission,
DGIV, Brussels, 12 July 1995) <http://aei.pitt.edu/4112/> at 31 January 2010. See also
Geradin, The Perils of Antitrust Proliferation, above n 19, 194, Hufbauer and Kim, above n
23, 330, Noonan, above n 29, 46-47 and Roderick Meiklejohn, 'An International Competition
Policy: DO We Need It? Is it Feasible?' (1999) 22 World Economy 1233, 1235, discussing
the recommendations of the Group of Experts.
Oliver Budzinski, Towards an International Governance of Transborder Mergers?
Competition Networks and Institutions Between Centralism and Decentralism (2003) 36
New York University Journal of International Law and Policy 1, 9 [footnotes omitted].
Chapter9|Page430
economist, FM Scherer,71 who advocated creation of an International Competition

Policy Office within the WTO, with enforcement capabilities,72 which would have
the power, amongst other things, to recommend corrective measures for mergers
reaching a set level of concentration in relation to world trade.73
Despite having recognised a possible role of the WTO in relation to competition
policy, the US Government quickly criticised the EUs proposal as too ambitious,
suggesting, in particular, that the WTO was too large and diverse to ever adopt a
common approach to anticompetitive practices in the context of trade and
competition policy.74 The US Government and regulators also began expressing
fears that negotiations within the WTO might lead to a lowest common
denominator set of principles that might weaken existing laws.75 Concerns were
also and continue to be raised about the willingness of businesses and
national governments to turn over competitively sensitive, confidential business
information to WTO bureaucrats, 76 with fear that such information might be used
to advance trade-related objectives77 or that it might be disclosed to foreign
competitors. 78 The WTO dispute resolution mechanisms were also considered
by US officials to be inappropriate for the resolution of competition law disputes.79
71
72
73
74
75
76
77
78
79
Frederic M Scherer was chief economist at the US Federal Trade Commission between
1974-1976, from Harvard Kennedy School Faculty and Staff Directory, F M Scherer
<http://www.hks.harvard.edu/about/faculty-staff-directory/f.-m.-scherer> at 31 December
2009.
See Scherer, above n 27, 92. See also Doern and Wilks, above n 30, 316 and Meiklejohn,
above n 68, 1235. See also Report of Group of Experts, above n 68, recommendation 4.2.
See Scherer, above n 27, 94.
Griffin, above n 31, 509. See also Braithwaite and Drahos, above n 21, 189 and Noonan,
above n 29, 49.
Griffin, above n 31, 510. See also John Braithwaite and Drahos, above n 21, 189.
Ibid.
See, for example, Jenny, above n 66, 98, observing that the business community has
shown some coolness towards exchanges of information between competition authorities for
fear that strategic (confidential) information relating to the business strategies might be
disclosed to foreign competition authorities and might be leaked to international competitors
or the merging firms located in the country of those foreign competition authorities.
Griffin, above n 31, 510. See also Hufbauer and Kim, above n 23, 331 and David J Gerber,
'Competition Law and the WTO: Rethinking the Relationship' (2007) 10 Journal of
Chapter9|Page431
In spite of these objections to a substantive and binding competition code within

the WTO, at the Ministerial Conference in Singapore in 1996, the WTO
established a Working Group on the Interaction of Trade and Competition
(WGTCP) designed to address how competition laws interacted with international
trade.80
Recognising the objections raised by the US and other commentators about its
original proposals, the EU subsequently put forward a more modest proposal81 at
the WTO Doha Ministerial Conference in 2001, which would no longer require
substantive harmonization, but would involve voluntary cooperation, capacity
building in developing countries, and procedural core principles (like
transparency, fairness, and non-discrimination).82 The Doha Conference agreed
on a similar agenda, with the WGTCP directed to focus on clarification of (inter
alia), core principles, including transparency, non-discrimination and procedural
fairness and modalities for voluntary cooperation.83
Despite hopes by some that this agenda would result in some genuinely
international agreement on core competition law principles, the Cancn
Ministerial Conference in 2003 failed to reach consensus84 on this issue, a failure
80
81
82
83
84
International Economic Law 707, 707. See also Sweeney, Global Competition, above n 27,
219-221.
WTO, Singapore WTO Ministerial 1996: Ministerial Declaration, WT/MIN(96)/DEC, 18
December 1996, Adopted 13 December 1996, para 20. See also Geradin, The Perils of
Antitrust Proliferation, above n 19, 195, Noonan, above n 29, 46-51 and Hufbauer and Kim,
above n 23, 329. Compare Meiklejohn, above n 68, 1235-1236, who observes that this
mandate was very cautiously worded.
See Noonan, above n 29, 47, referring to this as an evolution in the approach advocated by
the EU to the WTO.
Budzinski, Towards an International Governance of Transborder Mergers?, above n 69, 9.
WTO, Interaction between Trade and Competition Policy (2009) World Trade Organization.
It also included work on the clarification of provisions on hardcore cartels and the support
for progressive reinforcement of competition institutions in developing countries through
capacity building. See also Doha WTO Ministerial 2001: Ministerial Declaration adopted on
14 November 2001, WTO Doc WT/MIN(01)/DEC/1 (2001).
WTO, Day 5: Conference Ends Without Consensus (Press Release, 14 September 2003).
See also Sweeney, Global Competition, above n 27, 209.
Chapter9|Page432
widely and perhaps unfairly85 attributed to objections raised by developing

countries.86 Subsequently, in July 2004, the General Council of the WTO
decided that the interaction between trade and competition policy would no
longer form part of the Work Programme set out in the Doha Ministerial
Declaration.87
No further significant initiatives have been taken toward establishing international
competition law rules. 88
9.2.3 The case for an international merger code
Many of the costs identified with the current system of merger regulation, most
significantly the costs of duplication, delay and of conflicting outcomes, might be
eliminated by the establishment of a supranational merger law and associated
enforcement body. A supranational body, independent of national influence,
might also be better placed to evaluate market effects based on a true
transnational or global market assessment, rather than being dominated by
market assessments distorted by national lenses.89 A vision of community,90 it
has been argued, is lost when enforcement is national.91
An international code which assesses conduct by reference to its impact on the
international, rather than national, community
85
86
87
88
89
90
91
Arguably the USs objection to the agreement played a more significant role: See Kathryn
McMahon, 'Developing Countries and International Competition Law and Policy' (Research
Paper No 2009/11, Warwick School of Law, 2009) 5.
See Hufbauer and Kim, above n 23, 329. See also McMahon, above n 85, 5.
WTO, Interaction between Trade and Competition Policy, above n 83 and WTO, Text of the
July Package the General Councils post-Cancn Decision, WTO Doc, WT/L/579 (2
August 2004). See also Geradin, The Perils of Antitrust Proliferation, above n 19, 195 and
Brendan Sweeney, Combating Foreign Anti-Competitive Conduct: What Role for
Extraterritorialism? (2007) 8 Melbourne Journal of International Law 35, 36.
See, eg, Geradin, The Perils of Antitrust Proliferation, above n 19, 195.
See OECD, Trade and Competition Policies: Options for a Greater Coherence (2001) 65,
noting that all countries having competition agencies empower them only to protect national
interests.
See, eg, ibid 27 and 34.
Chapter9|Page433
is supported by a practical reality of cosmopolitanism that promises to benefit

business, consumers, and all participants in the economic enterprise. It promises
non-discrimination, a check on beggar-thy-neighbor strategies, efficiency, fluidity,
and economic opportunity. It would provide a fail-safe forum for resolution of
disputes on a cosmopolitan, not a nationalistic, basis. 92
Additionally, it has been argued that some problems cannot be appropriately

solved except by a common solution.93 These include cases in which activities in
one nation create externalities for other nations. Environmental problems are
often identified as a paradigm example of this,94 but it is clear that anticompetitive conduct in one nation, including by way of anti-competitive mergers,
may also create externalities on consumers located in other nations.95 In these
cases, it has been suggested that centralized regulatory regimes, comprising
harmonized rules enforced through common enforcement schemes, are
preferable to the kind of decentralized regimes that currently prevail.96 Similarly,
some have claimed that economic regulatory theory provides that centralised
regulation is desirable for all mergers that are capable of having a spill-over
effect,97 which would include all mergers currently subjected to multiple filings, in
order to create a level playing field and to reduce the economic and political
expense associated with multiple filings.98
A set of world rules would also be simpler for business to adhere to,99 reducing or
eliminating the costs of complying with different legal standards, reporting and
waiting requirements.100
92
93
94
95
96
97
98
99
See, eg, ibid 27. See also Fox, Evidence to Antitrust Modernization Commission, above n
12, 3-4, observing that for transactions that are truly global, there is a case to be made for a
single rule of law or framework for law, adopted multilaterally; all other things being equal.
There is a credible argument that one standard should govern global mergers.
Geradin, The Perils of Antitrust Proliferation, above n 19, 197.
Ibid 196. See also Hufbauer and Kim, above n 23, 334.
Richard Burnley, An Appropriate Jurisdictional Trigger for the EC Merger Regulation and
the Question of Decentralisation (2002) 25 World Competition 263, 265.
See ibid 273.
Fox, Competition Law and the Agenda for the WTO, above n 24, 11.
Chapter9|Page434
[I]f all mergers were either anticompetitive or not according to one universal
standard, the wheels of transactions would be greased and trillions of dollars in
transaction costs would be saved. 101
In relation to mergers specifically, centralised rules and enforcement could

reduce or eliminate the cost of determining compliance obligations in multiple
jurisdictions and of complying with multiple notifications and parallel national
reviews,102 thereby generating significant efficiencies in the merger review
process.103 A global institution may also be less subject to interest group
pressure104 than a national authority dependent on economic financial support.
In this respect, the EU has often been looked to as a model of supranational
efficiency in merger control and it is clear that the EU itself has sought to export
its policy in this respect.105
9.2.4 The case against an international code
Although the case for an international code appears intuitively appealing and, if
possible, could generate significant efficiencies in merger review for parties and
governments, it would not necessarily represent the optimal approach to
transnational merger review, even if practical.106
100
101
102
103
104
105
106
See Pearlstein, Steven, 'Europeans Relent, Back Boeing Merger', Washington Post
(Washington), 24 July 1997, E01. See also Fox, Competition Law and the Agenda for the
WTO, above n 24, 14.
Eleanor M Fox, 'GE/Honeywell: The US Merger that Europe Stopped - A Story of the Politics
of Convergence' in Eleanor M Fox and Daniel A Crane (eds) Antitrust Stories (2007) 331,
357. Fox also claims that [a] universal rule would treat the whole world community
seamlessly and the market actors therein non-discriminatorily, with no place for nationalism.
[footnotes omitted].
See, eg, Budzinski, Towards an International Governance of Transborder Mergers?, above
n 69, 44.
D Daniel Sokol, 'Monopolists Without Borders: The Institutional Challenge of International
Antitrust in a Gilded Age' (2007) 4 Berkeley Business Law Journal 37, 90.
Ibid 82. See also Budzinski, Towards an International Governance of Transborder
Mergers?, above n 69, 44.
See Hufbauer and Kim, above n 23, 330. See also Michael Harker, Cross-Border Mergers
in the EU: The Commission V The Member States (2007) 3 European Competition Journal
503, 507.
See, eg, McGinnis, Political Harmony, above n 18, 126 and McGinnis, Political Economy,
above n 18, 551.
Chapter9|Page435
Would an international merger code be optimal?

Despite obvious cost savings that could be generated by an effective global
merger code,107 some have argued that many of the main rationales
underpinning centralised regulation, including the fear of a race to the bottom, in
which firms relocate to the most favourable regulatory environment, and the
inability to effectively control conduct in one country that causes externalities in
another, is lacking in the field of competition law,108 primarily because of the wide
acceptance of extraterritorial effects-based jurisdiction.109
More significantly, as identified in chapters 3 and 4, there does not appear to be
a single substantive or procedural approach that is optimal for any given
country,110 as a result of different market structures,111 market sizes and the
ability of any given country to effectively assert its jurisdiction extraterritorially.112
Even if it was possible to distil a current optimal approach that could be applied to
all jurisdictions, it would not follow that embedding such an approach in a single
supranational treaty would produce optimal long term results. Continued diversity
of substantive laws and analysis has the potential to yield significant long-term
benefits.113 Unlike many other fields of law, competition policy continues to be
107
108
109
110
111
112
113
See, eg, Fox, Evidence to Antitrust Modernization Commission, above n 12, 4-5.
See, eg, ibid and Jenny, above n 66, 101.
See, eg, Fox, GE/Honeywell, above n 101, 357 observing that uniform rules would frustrate
localities efforts to frame their own law according to their specific contextual needs. See
also Gifford, Draft International Antitrust Code, above n 19, 4, Eleanor M Fox, 'Can We
Control Merger Control? An Experiment' in Policy Directions for Global Merger Review, a
Special Report by the Global Forum for Competition and Trade Policy (1999) 79, 81 and
Fox, Competition Law and the Agenda for the WTO, above n 24, 11. Compare A Neil
Campbell and Michael J Trebilcock, Interjurisdictional Conflict in Merger Review in Leonard
Waverman, William S Comanor and Akira Goto (eds) Competition Policy in the Global
Economy: Modalities for Cooperation (Kindle ed, 16 April 2007) location 2503, who argue
that common substantive standards are necessary to avoid divergent outcomes.
n 69, 10, fn 46.
See chapter 5 at 232.
See Budzinski, Towards an International Governance of Transborder Mergers?, above n 69,
10 and 17 and Fox, Evidence to Antitrust Modernization Commission, above n 12, 4-5.
Chapter9|Page436
heavily influenced by economic theory114 and existing diversity reflects, at least in

part, the pluralism in the economic theories of competition in general, and of
mergers especially115 which are capable of evolving over time as new expertise
in economics and regulatory theory emerges.116 In this respect, existing national
laws often rely on flexible terms such as market and competition which have
developed meanings explained in guidelines or judicial and administrative
precedent providing an historical perspective that would be lacking in any global
rules,117 as well as providing scope for the evolution of interpretive principles. By
contrast, the rigidity of an international treaty would make it difficult to implement
changes to respond to new theoretical developments.118
[There] can be no certainty about the right competition theory and, consequently
it is impossible to derive the right competition rules and policy. Competition
theories will keep evolving through scientific progress Any system of
competition rules must be able to adjust to new developments in competition
theory and new challenges from innovative anticompetitive market behavior. This
requires a minimum degree of diversity of competition policies to offer
permeability for the creation and diffusion of theory innovations.119
Even conflicts between nations can help them to better understand different
approaches to merger regulation and enable them to consider whether to
114
115
116
117
118
119

11.
Ibid.
See ibid 17. See also Debra A Valentine, Building a Cooperative Framework for Oversight
in Mergers The Answer to Extraterritorial Issues in Merger Review (1998) 6 George
Mason Law Review 525, 529, noting that a highly detailed code would tend to freeze
antitrust thinking and ultimately impede globalization and innovation.
Sweeney, Combating Foreign Anti-Competitive Conduct, above n 87, 41
Fox, GE/Honeywell, above n 101, 357, noting that uniform rules, if too specific, would
constrain the adaptation of law to a changing world. See also Daniel K Tarullo, 'Competition
Policy for Global Markets' (1999) 2 Journal of International Economic Law 445, 451.
See also A Neil Campbell and J William Rowley, 'The Internationalization of Unilateral
Antitrust Law Journal 267, 274, observing that the challenges are exacerbated by the
situation-specific difficulties involved in distinguishing between welfare-reducing conduct and
aggressive actions that are procompetitive.
Chapter9|Page437
change their approaches to merger review.120 Consequently, while often

generating tensions on the few occasions significant transnational merger
disputes arise, such disputes create opportunities for renewed assessment of
legal and analytical best practice.
The risk of regulatory error would also be affected by the creation of a central
regulatory body. Unlike many other areas of law, in which there might be a single
correct interpretation of facts against legal rules, competition analysis,
particularly that involving predicted future market effects, is subjective and open
to regulatory error, either through failure to take action against anti-competitive
mergers (Type II errors) or by blocking mergers which would have been procompetitive (Type I errors). A single enforcer, while arguably reducing the risk of
Type I error, would increase the risk of Type II error; that is, the absence of multijurisdictional review increases the risk that a single authority would mistakenly
allow an anti-competitive merger to proceed.
Most significantly, however, the welfare impact of any particular merger is likely
to be different in different countries121 and an international merger regulator
deciding matters solely on the basis of global welfare benefit or detriment could
eliminate the benefits that might otherwise flow from appropriately targeted
national remedial orders. This asymmetry in national and global welfare effects
and its implications for a centralised enforcement is demonstrated below.
120
121
Campbell and Rowley, above n 119, 284. The developments in Europe following the
Boeing/McDonnell Douglas merger provide a good example of this.
Cabral, An Equilibrium Approach, above n 133, 740. See also Varney, Coordinated
Remedies, above n 9, 4: there may be different market conditions and realities in
different jurisdictions, and those differences may explain why we do not always end up at
the same remedial end point.
Chapter9|Page438
FIGURE 9.1 MERGER GENERATING GLOBAL WELFARE BENEFIT

BUT NATIONAL WELFARE DETRIMENT
The proposed merger in Figure 9.1 would enhance global welfare122 but reduce
national welfare in country B. A single authority evaluating this merger solely on
global welfare effects would approve it on the basis that it enhanced global
welfare.
If, on the other hand, reviews of transnational mergers were conducted at a
national level, Country A would approve the merger and Country B would either
refuse clearance or provide clearance conditionally. The effect on global welfare
in such a case would depend on the action taken by Country B. At the extremes,
if Country B blocked the merger, global welfare would be reduced, because the
benefits predicted in Country A would fail to be realised. Conversely, if Country B
allowed the merger subject to remedies targeted to alleviate the predicted
national welfare detriment, global welfare would be enhanced beyond the level
predicted by a supranational regulator. In this way, assuming the additional cost
of multiple regulation did not outweigh the welfare benefits realised through
remedial action in Country B, national regulation in a case of this nature would
produce a more optimal global outcome.
122
It is assumed that only two countries are affected by the merger.
Chapter9|Page439
FIGURE 9.2(A) MERGER GENERATES GLOBAL WELFARE BENEFIT

BUT MERGER BLOCKED DUE TO NATIONAL WELFARE DETRIMENT
IN COUNTRY B
FIGURE 9.2(B) MERGER GENERATES GLOBAL WELFARE BENEFIT

BUT TARGETED MERGER REMEDIES ARE IMPOSED BY COUNTRY B
DUE TO NATIONAL WELFARE DETRIMENT
Even if the remedies imposed by Country B produce externalities which reduce,

to a degree, the benefits that would be generated in Country A, as long as the
benefits were not reduced by more than the level of detriment that would have
Chapter9|Page440
been produced in Country B absent the remedies, global welfare is still better off
under the national rather than the global approach to enforcement.
FIGURE 9.2(C) MERGER GENERATES GLOBAL WELFARE BENEFIT
BUT MERGER REMEDIES IMPOSED BY COUNTRY B PRODUCE
NEGATIVE EXTERNALITIES IN COUNTRY A
This may be mathematically represented as follows:

EQUATION 9.1 (NATIONAL REGULATOR)
Assumption: A national regulator will normally approve, block or modify a
merger based on predicted local welfare impact.
A national regulator will approve a merger whenever:
X1 Y1
Where
X1 = the national value of predicted merger-specific increases in welfare
(through enhanced local competition or predicted efficiencies)
Y1 = the national value of predicted merger-specific reduction in welfare
(through predicted reduction in competition)
Chapter9|Page441
EQUATION 9.2 (GLOBAL REGULATOR)

Assumption: A global regulator will approve a merger whenever global
welfare would be enhanced, even if welfare is reduced in one or more
nations.
A global regulator will approve a merger whenever:
X2 Y2
Where
X2 = the accumulated national value of predicted merger-specific increases
in welfare (through enhanced local competition or predicted efficiencies)
Y2 = the accumulated national value of predicted merger-specific reduction
in welfare (through predicted reduction in competition)
In many cases the global welfare outcome will be identical, regardless of whether
a centralised or decentralised approach to regulation is taken (ignoring, for the
moment, the costs of the regulatory process). This will be the case whenever all
national regulators agree to the same outcome.
The global welfare outcome will, however, be different when a merger produces
pro-competitive welfare benefits in some countries and anti-competitive welfare
detriments in others. The global welfare outcome of decentralised national
merger regulation may be represented as follows:
EQUATION 9.3 (NATIONAL REGULATION)

(X2 V2) (Y2 Z2) = A
Where
X2 = the accumulated national value of predicted merger-specific
efficiencies
Y2 = the accumulated national value of predicted merger-specific
reduction in competition
Chapter9|Page442
V2 = the accumulated value of any reduction in the value of predicted

merger-specific efficiencies generated by merger remedies
Z2 = the accumulated national value of change in the level of predicted
merger-specific reduction in competition brought about through proposed
merger remedies123
The global welfare benefit produced as a result of centralised regulation may be

represented as follows:
EQUATION 9.4 (NET GLOBAL WELFARE BENEFIT OF GLOBAL
REGULATION)
X2 Y2 = B
A global regulatory approach to transnational mergers is likely to be optimal
whenever either all reviewing countries would approve or block a merger. In
such cases the same result is reached without the duplication of review
processes.
However, in cases where the effects of a proposed merger would be felt
differently in different nations, with some likely to approve and others likely to
block a proposed merger, a central regulator will only be optimal where the
cumulated value of predicted welfare benefits in each affected nation, after
considering proposed remedies in those nations that would otherwise have
suffered welfare detriments as a result of the merger (A), is equal to or less than
the predicted global welfare benefit (B).
EQUATION 9.5 (CIRCUMSTANCES IN WHICH GLOBAL
REGULATION WILL BE OPTIMAL)
AB
123
For example, if predicted value of merger-specific reduction in competition was $1,000,000

2
and the remedy proposed was to block the merger, then the value of Z would be
$1,000,000.
Chapter9|Page443
Whenever B exceeds A to a significant level, global welfare would be maximised

by a national approach to regulation.
This welfare outcome creates a dilemma. Purely nationalistic approaches to
welfare which fail to consider the wider global effects of a merger124 might
prevent or limit predicted global welfare benefits. Conversely, the same inward
looking approach to merger analysis might allow a merger that would reduce
global welfare. However, a purely global approach, by eliminating
considerations of internal welfare gains and losses and focussing only on net
global welfare outcomes, will fail to account for the heterogeneity of welfare
effects in different jurisdictions. While global welfare should always (absent
regulatory error) be enhanced by such an approach, it may not be enhanced to
an optimal level. In many cases, particularly where producers are located in one
country and consumers in another, an appropriately confined local remedy in the
country adversely affected by the merger might produce greater global welfare
outcomes than an unconditional approval.125 As a result, establishment of a
supranational regulatory authority, even if practical, may not produce the most
optimal global welfare outcome.126
The preceding discussion assumes that any global (or multinational) regulator,
operating pursuant to a global treaty would accurately decide likely global welfare
outcomes of proposed mergers without reference to nationalistic prejudices. This
ideal is, of course, unlikely to be realised in practice. Members of the global
enforcement body would, by necessity, be nationals of one or more countries and
human nature makes it difficult to eliminate all ideological prejudices favoring
124
125
126
See, eg, Evans, above n 18, 21.

Ibid 21, observing that a global social planner charged with designing competition laws to
maximize global social welfare would take into account local circumstances as well as
externalities across jurisdictions in the enforcement of rules. Evans then notes that because
most economic commerce is local, the heterogeneity in local circumstances would result in
heterogeneity in the antitrust rules and that as a result the heterogeneity of antitrust rules
in other words, divergenceis probably optimal.
See, eg, Sweeney, Global Competition, above n 27, 212 and 213 fn 17, discussing some of
the reasons why a comprehensive international agreement may not be desirable.
Chapter9|Page444
national welfare in ones home country. Nevertheless, multiple members of a

panel drawn from a variety of jurisdictions would limit the ability of the national
interests of one country to influence an outcome.
To be effective, members of a global enforcement panel would also need to have
some expertise in competition law and economics. In this respect the choice of
forum would be significant. If the WTO was adopted as a forum, the chance of
error in decision-making is likely to be increased.127 This is because the WTOs
dispute resolution body does not comprise competition lawyers and economists
with the level of expertise of those engaged by regulatory authorities in
developed nations,128 although this might be rectified by the establishment of a
new and separate merger review panel enlisting such expertise. The cost and
length of litigation WTO as a forum might also unfairly benefit larger nations who
have more money greater volume of activity and therefore benefit from repeat
activity.129 The risk of delay would also increase, with WTO litigation and
decision-making infamously slow.130 As a result, a single global reviewer might in
fact delay a merger for longer than would be the case if the merger was
subjected to multiple national reviews,131 particularly where the merger raised few
if any anti-competitive concerns.132
127
128
129
130
131
132
See, eg, Sokol, above n 103, 91. See generally Tarullo, above n 118, 450-451 discussing
the limits of the WTO.
Sokol, above n 103, 83 and 88-89.
See ibid 84.
See ibid 83-84. See also Patricia M Smith, 'A Long and Winding Road: TRIPS and the
Evolution of an International Competition Framework' (1999) 2 Journal of International
Economic Law 435, 438 (noting that the WTO is not well suited to fact intensive
investigations) and Tarullo, above n 118, 450, discussing the inability of the WTO to
effectively respond to private disputes.
See, eg, ICPAC Final Report, above n 2, 58
Ibid, quoting Submission by Lester L Coleman, Executive Vice President and General
Counsel, Halliburton Company, in response to Advisory Committee Multijurisdictional
Merger Review Merger Case Study Questionnaire re the Halliburton/Dresser Transaction, at
4 (9 March 1999), claiming that there was no usefulness in setting up a dispute resolution
mechanism at the international level. Such a mechanism might well lengthen an already
over-long process, and further complicate business transactions that are generally
Chapter9|Page445
An alternative to the WTO would be the development of an independent

international body to review substantive laws and conduct merger analysis.133
However, establishing and maintaining such a body would be extremely costly
and would not overcome many of the concerns attendant a WTO-based
enforcement approach.
Practical problems
Even if the theoretical objections to an international institution as an optimal
regulatory model for transnational mergers could be overcome, the practical
problems of its implementation loom large and include the difficulties associated
with reaching agreement on optimal laws and procedures and the unwillingness
of states to cede sovereignty to an international body, even where potential
global benefits are demonstrable.
(a) reaching agreement
Key among the practical difficulties that would impede any attempt to create a
supranational merger agreement is the difficulty of obtaining consent among
countries on the appropriate content of any such agreement.134 Although
national regulators often tout the benefits of cooperation and convergence, they
generally do so in the expectation that everyone else should adhere to their own
133
134
procompetitive. Much can be accomplished by individual jurisdictions improving their own

techniques for investigation and their own forms for reporting of a proposed transaction.
Cabral wrongly claims that former US Assistant Attorney General Joel Klein proposed the
creation of a world wide merger [740] authority of this nature: Lus MB Cabral, 'An
Equilibrium Approach to International Merger Policy' (2005) 25 International Journal of
Industrial Organization 739, 738-740 and see also Lus M B Cabral, 'International Merger
Policy Coordination' (2003) 15 Japan and the World Economy 21. It is, however, clear from
the speech to which Cabral refers, that Klein was advocating not a supranational law and
enforcement body but rather a Global Competition Initiative of the type proposed by ICPAC
and which was subsequently formed as the International Competition Network: Joel I Klein,
'Time for a Global Competition Initiative?' (Paper presented at the EC Merger Control 10th
Anniversary Conference, Brussels, 14 September 2000).
See, eg, Gifford, Draft International Antitrust Code, above n 19, 29-30 and Noonan, above n
29, 11.
Chapter9|Page446
views about what policy should be considered optimal.135 As a result, it has been
observed that any enthusiasm countries might have for an international antitrust
agreement diminish when convergence is taken to mean anything other than:
Converge to my way.136
As a general rule, the likelihood of reaching agreement will diminish with the
increase in the number of parties and the diversity in laws among those parties.
Consequently, a body such as the WTO, with 153 member states at vastly
different levels of development, will be less likely to achieve a detailed agreement
on competition law issues137 (at least absent trade-offs in other areas138) than a
smaller body comprised of countries at similar levels of development with existing
and developed merger regimes. Conversely, the level of benefit through
rationalistation of merger review process will diminish as the number of members
to an agreement is reduced.139
Regardless of the forum and composition of membership, all member countries
will be influenced by their own cultural, social and political140 backgrounds141 as
135
136
137
138
139
140
Evans, above n 18, 19, claiming that advocates of convergence leap from the
observation that some jurisdictions have badly designed rules to the conclusion that
jurisdictions should have similar rules and ones that follow those of the US.
Fox, GE/Honeywell, above n 101, 356-357.
See, eg, Hufbauer and Kim, above n 23, 334. Currently there are 153 members of the WTO
with 30 more observer governments (at 31 December 2009).
Some have suggested the WTO as a forum precisely because its broad range of activities
mean that there are opportunities for agreement reached on the basis of trade-offs in other
areas. It is suggested that while agreement may be achieved through this sort of diplomatic
bribery, it may also lead to resentment and necessary concessions will mean that is still
unlikely to produce an optimal agreement. The ICN, although successful in reaching some
agreement on recommendations, does not require consensus of all parties and imposes no
binding obligations, so parties are not negotiating in a way that would require a transfer of
sovereignty or risk parties acting in a way that would harm their national interest in any given
case.
Any such agreement may reduce cost to a limited degree for example, a trans-Atlantic
agreement between the US and EU might significantly reduce some transaction costs and
eliminate the greatest risks of divergence, but significant costs would remain for parties
required to notify in multiple jurisdictions.
Stephen G Corones, The Treatment of Global Mergers: An Australian Perspective (2000)
20 Northwestern Journal of International Law and Business 255, 283. See also Evans,
above n 18, 21.
Chapter9|Page447
well as their particular market size and geography, so that agreement on any
single set of rules will inevitably prove difficult, if not impossible. For example,
while countries might be able to agree on a common standard by which proposed
mergers should be assessed, such as the SLC standard, agreement on the role
of efficiencies in any such analysis,142 the role of a public interest defence,143 or
the nature of any third party involvement would provide a much greater
challenge.
More difficult still would be agreement on institutional and procedural rules.144
Enforcement structures, including the powers of regulators, the role of courts and
the standing of third parties to challenge a merger, currently vary between
countries to a much more significant degree than substantive laws and analysis
and for that reason would present many more significant challenges to any
attempted agreement on a supranational process.145
Any negotiation to achieve a consensus on relevant substantive, procedural and
institutional rules may necessitate bargaining and trade offs, which might benefit
larger actors like the US and EU over smaller actors146 and which may yield rules
formed more by politics than principle.147
141
142
143
144
145
146
147
See, eg, Ariel Ezrachi, 'Limitations on the Extraterritorial Reach of the European Merger
Regulation' (2001) 22 European Competition Law Review 137, 149.
Compare, for example, Competition Act 1985, Chapter C-34 (Canada), s 96 and
(issued 1992; revised 8 April 1997) s 4. See also Fox, GE/Honeywell, above n 101, 356,
observing that Anticompetitive and efficient are not self-defining terms, and efficiency as
a goal is an elastic concept. Nations do not agree on what is anticompetitive. They do not
agree on whether antitrust is only about efficiency; and they do not agree on how to get to
efficiency by the vehicle of antitrust law.
See, eg, Corones, above n 140, 284.
See, eg, ICPAC Final Report, above n 2, 57-58.
Braithwaite and Drahos, above n 21, 7.
Fox, Competition Law and the Agenda for the WTO, above n 24, 11.
Chapter9|Page448
(b) national sovereignty and the triumph of national over global

interests
If agreement could be reached on a theoretical optimal set of both substantive
and procedural merger rules, the task of convincing nations to bind themselves to
such rules provides a potentially overwhelming obstacle.148
a centralized enforcement system relying on a global antitrust authority would
be politically unacceptable for large jurisdictions. But even if it were
acceptable to the main stakeholder nations, the enforcement structures vary so
considerably across nations that it would be hard to agree on a set of institutional
and procedural rules.149
Countries are generally unwilling to put global interest ahead of their own national
interests.150 An international code would require parties to cede some
sovereignty over decision-making of this nature to a central authority that may
focus exclusively on the global welfare impact of the merger151 and countries
have historically been reluctant to agree to such a transfer of power.152
148
149
150
151
152
See, eg, Geradin, The Perils of Antitrust Proliferation, above n 19, 198 and at 204, Utton,
International Competition Policy, above n 10, 87 and Cabral, An Equilibrium Approach,
above n 133, 740.
Geradin, The Perils of Antitrust Proliferation, above n 19, 199.
This is evidenced by the fact that national competition laws almost always assess
transactions based on national rather than international welfare outcomes. See OECD,
Trade and Competition Policies, above n 89, 65, observing that all countries having
competition agencies empower them only to protect national interests. See also Andrew
Guzman, 'Is International Antitrust Possible?' (1998) 73 New York University Law Review
1501, 1516-1518, Sokol, above n 103, 90-91, Griffin, above n 31, 507 (noting that each
nation, including the United States, reserves the right to deviate from the norm of
competition when it perceives that such action is in its own self-interest), Campbell and
Trebilcock (Kindle Edition), above n 110, location 2438, Richard Caves, Multinational
Enterprises and Economic Analysis, (2nd ed, 1996) 109 and Ezrachi, above n 141, 137.
Phil Thesis, Queen Mary College of University of London, 2006) 216. See also Budzinski,
Towards an International Governance of Transborder Mergers?, above n 69, 9, Hannah L
Buxbaum, Territory, Territoriality, and the Resolution of Jurisdictional Conflict (2009) 57
The American Journal of Comparative Law 631, 672, Sokol, above n 103, 91 and Corones,
above n 140, 283 (observing that countries do not trust each other).
Chapter9|Page449
Although unprecedented success at supranational competition law was reached

among EU countries in establishing competition rules and, more significantly, a
one-stop-shop for mergers, this was extraordinarily difficult to achieve153 and is
unlikely to have been achieved in isolation, without trade-off benefits in other
areas of shared interest. As a result, the unique nature of the EU agreement
makes its relative success a feat unlikely to be replicated at a broader
international level. Even within the EU, the reach of the merger regulation
remains the subject of debate154 and on occasion continues to generate
considerable friction between Member states.155 This friction would only be
enhanced outside the borders of the Internal Market.
(c) Cost and delay
Assuming a supranational set of rules and procedures, accompanied by
institutional support, including an adjudicative body, could be agreed upon and
implemented, its cost may exceed its potential benefits.156 This includes the fixed
cost of negotiating the agreement at first instance, including any trade-offs, such
as financial support, as well as the ongoing costs associated with financing the
adjudication system and supporting bureaucracy.157 In addition, the potential cost
153
154
155
156
157
Harker describes the journey as difficult and tortuous and observes that jurisdictional rules
prov[ed] to be some of the most controversial and laborious aspects of the negotiations:
Harker, above n 105, 508. See also SJ Bulmer, Institutions and Change in the European
Communities: the Case of Merger Control (1994) 72 Public Administration 423 and Burnley,
above n 98, 266-267.
See, eg, Harker, above n 105, 534.
See ibid 534, observing that several Member States have appeared more than willing to use
domestic ex ante controls over key industries in the face of opposition by the Commission
and eventual condemnation by the Court secure in the knowledge that they can achieve
significant modifications to transborder mergers, and in some cases frustrate them
completely. See generally Jonathan Galloway, EC Merger Control: Does the Reemergence of Protectionism Signal the Death of the One Stop Shop (Paper presented at
the 3rd Annual CCP Summer Conference, University of East Anglia, Norwich, 14 June
2007).
McGinnis, Political Harmony, above n 18, 126, observing that the lock-in costs of an
international regime are particularly high in a fast-changing world [and harmonization may
introduce] new and potentially more serious [costs].
Fox, Competition Law and the Agenda for the WTO, above n 24, 11. See also Budzinski,
Towards an International Governance of Transborder Mergers?, above n 69, 10 fn 46.
Chapter9|Page450
of enforcing the agreement would be high158 and, depending on the content of the
agreement itself, could outweigh any predicted benefits.159 The WTO is
instructive in this respect. The review process within the WTO is lengthy and
complicated. Applied to merger review, such a process would effectively crater
many merger deals,160 particularly in high-tech industries where delay can
quickly cause a deal to collapse.161
9.2.5 Analysis and conclusions
Despite the possible cost savings and certainty benefits that might flow from a
centralised system of merger control, there are a number of reasons why it would
be inappropriate for transnational merger review.
From a theoretical standpoint, it would not appear that supranational
determination of a merger review, based on effects of a merger in a global
market, would provide the most optimal global welfare outcome. Such an
approach fails to adequately address significant national welfare deficits in a way
that multijurisdictional enforcement might. This failure would also make it
politically unpalatable for governments, not normally willing to place global over
national interest by ceding sovereignty on economic determinations to a central
institution.162 A central set of rules and governing body responsible for
transnational mergers would also lack the flexibility national regulators enjoy to
adapt and evolve in response to new knowledge.
In addition, where a supranational body retained adjudicative authority over
national adherence to the code, additional conflict may be generated if one state
158
159
160
161
162
See Sokol, above n 103, 79-80.

Ibid 79.
Valentine, above n 116, 530
See ibid 530.
See, eg, Wilson, above n 2, 235 and ICPAC Final Report, above n 2, 58.
Chapter9|Page451
formally challenged the adherence of another and this might have a detrimental
effect on existing levels of cooperation.163
At a more practical level, a supranational set of rules would require consensus on
an optimal approach to merger review which, even if it existed, would not appear
to be readily identifiable. Even if such an approach was objectively discernable,
reaching a consensus on global rules, particularly if they involved significant
deviation from existing rules and guidelines, would appear unlikely in the short to
medium term.164
9.3 Limited international code

Another proposal for transnational mergers involves the creation of a more
limited, but nonetheless binding, transnational merger code. Such a code might
involve agreement on a common substantive merger law and possibly also
agreement on certain procedural aspects of merger regulation, such as review
time frames and notification thresholds. It might also include an altruistic
component, obliging member states to formulate their own domestic policies with
regard to the collective interests of international society rather than in their
individual self interest,165 thereby correcting some of the economic externalities
that might otherwise be generated by their enforcement actions.166 However,
unlike the comprehensive international code earlier described, merger
enforcement would continue to take place at a national level rather than through
a centralised supranational enforcement body.
Although individual merger enforcement actions would take place nationally, a
supranational body might retain some authority to adjudicate disputes between
163
164
165
166
See Tarullo, above n 118, 450.

See, eg, Sokol, above n 103, 90 and ICPAC Final Report, above n 2, 57, Snyder, above n
11, 117 and Robert D Paul, 'The Increasing Maze of International Pre-Acquisition
Notification' (2000) 11 International Company and Commercial Law Review 123.
Martyn Taylor, International Competition Law: A New Dimension for the WTO? (2006) 165.
See ibid.
Chapter9|Page452
nations, where one nation believes another to have failed in its obligations under
the code.
A limited code of this nature would facilitate the harmonisation of antitrust norms
without obliging parties to give up the right to formulate and interpret its own
rules of law.167 Consequently, it would not involve the same level of sovereign
sacrifice as a comprehensive code incorporating central merger enforcement.
However, despite its less intrusive nature, it would nonetheless suffer many of the
limitations and difficulties associated with a comprehensive code, without
producing many of the benefits that a centralised enforcement system might
generate.168
First, although a code may produce more optimal global welfare than a centrally
regulated system by permitting consideration and, where appropriate, correction
of national welfare deficit, as well as being more flexible in incorporating
improved knowledge to economic welfare analysis, national enforcement would
also deprive the code of many benefits, such as reduced duplication and
uncertainty.
In particular, agreement on a substantive standard alone provides no guarantee
against divergent outcomes.169
[Even] if countries were to agree on some perfect binational or international
competition code which [is] neither possible nor desirable we would still run
the risk of looking at the same facts under the same standards and reaching
different results. Antitrust merger analysis necessarily involves complex
167
168
169
Perhaps for this reason business has also been reluctant to support any calls for a
substantive code for transnational mergers: see, generally Business and Industry Advisory
Committee to the OECD (BIAC) and International Chamber of Commerce (ICC),
'Recommended Framework for Best Practices in International Merger Control Procedures' (4
October 2001) 1.
See, eg, A Neil Campbell and Michael J Trebilcock, 'Interjurisdictional Conflict in Merger
Review' in Leonard Waverman, William S Comanor and Akira Goto (eds), Competition
Policy in the Global Economy: Modalities for Cooperation (1997) 107, Wilson, above n 2,
244 and Campbell and Trebilcock (Kindle Edition), above n 110, locations 2353 and 2387.
Chapter9|Page453
assessments about the future impact of a transaction and reasonable minds can
differ on what the correct outcome should be 170
At a more practical level, for many of the same reasons that a comprehensive
code would currently prove unattainable, so would a more limited binding code.
Even without sovereignty concessions relating to enforcement, reaching
agreement on the substance of a code for merger review and enforcement, which
would require parties to modify existing laws to conform,171 would be likely to
present an insurmountable challenge.
it is difficult to harmonize existing national regimes into a single standard,
especially since national competition policies not only entail different standards,
but also require complex factual determinations of changed perform-[330]-nce in
specific markets as a result of designated actions.172
A codified approach to the regulation of transnational mergers, whether

comprehensive or limited to substantive harmonisation, would therefore not
appear to be either practical or optimal in addressing the current cost
inefficiencies associated with multi-jurisdictional merger review.
9.4 International procedural clearing house

9.4.1 Overview
Another option proposed for rationalising the cost of transnational merger review
has been the establishment of a procedural clearing house, pursuant to which
national substantive laws would remain unchanged, but procedural rationalisation
might reduce the current level of duplication, both of notification for parties and
review for authorities. This approach recognises that the majority of costs
incurred in relation to the regulation of transnational mergers arise from
procedural compliance, rather than as a result of substantive divergence.173
170
171
172
173
Valentine, above n 116, 529.

See, eg, ibid 530.
Hufbauer and Kim, above n 23, 329-330.
See Rowley and Wakil, above n 24, 2 and Giannino, above n 152, 242.
Chapter9|Page454
Consequently, any agreement that would reduce compliance burdens, even

absent any substantive supranational agreement on merger law, could produce
significant cost savings.174
Proposals for a procedural clearing house have taken a number of forms,
including:
a centralised clearance to a single lead jurisdiction,175 whose decision

would be binding;176 (deferred jurisdiction approach)
a requirement that countries give mutual recognition to a decision to allow

a merger made by the country in which the merger would have its
greatest impact;177 (mutual recognition approach)
an agreement for the mutual recognition of a single national filing,178 or

alternatively, an agreement for a single centralised filing which could be
accessed by, or disseminated to, interested parties;179 (the single filing
approach)
a case-by-case agreement on a procedural lead jurisdiction which would

coordinate the gathering of information for use by authorities in all
interested jurisdictions and may also facilitate negotiation of remedies to
address concerns of interested countries.180 (the facilitative lead
jurisdiction approach)
174
175
176
177
178
179
180
Ibid.
Fox refers to this as a disinterested clearing-house centre: Fox, Can We Control Merger
Control?, above n 110, 87. See also Budzinski, Towards an International Governance of
Transborder Mergers?, above n 69, 4, Corones, above n 140, 284, Giannino, above n 152,
243 and Burnley, above n 98, 276.
See, eg, Fox, Can We Control Merger Control?, above n 110, 87.
Ibid 83.
Ibid 83-84.
Ibid 86-87.
See, eg, ICPAC Final Report, above n 2, 76.
Chapter9|Page455
9.4.2 The deferred jurisdiction approach

Deferral of jurisdiction to a single or lead regulator, based on a common
notification form, would have the advantages of eliminating the possibility of
conflicting outcomes and reducing uncertainty for parties. Combined with a
requirement that a single filing be made to a central administrative body, it would
also eliminate much of the duplication that currently exists for parties to
However, for reasons already discussed in the context of comity,181 determining
an appropriate lead jurisdiction and then persuading countries to defer to the
decision of that jurisdiction is likely to prove both impractical and undesirable for
ex ante merger review.182
First, it is likely to be sub-optimal for many of the same reasons the proposal for a
substantive code may prove sub-optimal. There is no guarantee that the
appropriate lead jurisdiction (assuming it could be objectively identified) would
consider or give any (or equal) weight to negative externalities that the merger
may generate in another country. This might result in sub-optimal remedies, the
approval of a merger that would produce net global welfare deficit or the blocking
of a merger that might be globally welfare enhancing.183
Thus, while the allocation of jurisdiction over transnational mergers to a single
jurisdiction having the closest connection to the merger might, as some argue,
prevent the negative externalities arising from multiple reviews based on the
effects doctrine (or over-enforcement),184 this may be replaced with negative
enforcement externalities resulting from decisions or remedies based on national,
181
182
183
184
See chapter 6.
It may be less of a problem for cartel or other prohibited hard-core anti-competitive
behaviour where, for example, certain conduct may be more objectively recognised as
undesirable (although this may not hold true for more controversial or subjective
assessments based on rule of reason analysis).
Budzinski, Towards an International Governance of Transborder Mergers?, above n 69, 4-5.
Chapter9|Page456
rather than global, welfare considerations. In other words, the negative

externalities generated by over-enforcement through multiple extraterritorial
application of merger laws might simply be replaced by negative externalities
generated by under-enforcement of laws based on national self-interest.185
Second, in addition to falling short of maximising global welfare, the national
friction sought to be avoided by the elimination of conflicting outcomes might, in
fact, be magnified where other affected jurisdictions perceive that their interests
have been ignored or rejected and are denied recourse to their own laws to
remedy their anticipated national welfare implications.
Third, for reasons discussed in relation to comity,186 the time sensitive nature of
mergers means that allocating a merger review to a single jurisdiction may be
impractical. Central determination of a lead or single jurisdiction,187 particularly
where more than one country may have a significant national interest in the
merger, may prove impossible within a workable time frame and may generate as
much uncertainty and conflict as it seeks to avoid.
Fourth, reaching agreement on how jurisdiction should be allocated, and applying
these allocative rules in practice, is likely to prove difficult and controversial.188 In
this respect, some have argued for a conflict-of-laws type approach which would
allocate jurisdiction based on degree of intensity of contacts.189 However, a
conflict of laws based approach to jurisdictional allocation may not be appropriate
for laws aimed at protecting the market rather than the rights of individuals. It is
also impractical within a workable time-frame. Private international law - or
185
186
187
188
189
William S Dodge, An Economic Defense of Concurrent Antitrust Jurisdiction (2003) 38

Texas International Law Journal 27, 39.
See chapter 6.
See Campbell and Trebilcock, who suggest the establishment of a specialized
supranational panel with the power to applied agreed rules to allocate an appropriate lead
jurisdiction: Campbell and Trebilcock (1997), above n 169, 89. See also Wilson, above n 2,
242.
See, eg, Wilson, above n 2, 245.
See, eg, Giannino, above n 152, 243.
Chapter9|Page457
conflicts of laws is highly complex, with allocation of jurisdiction in controversial

cases residing in national judicial bodies, often burdened by notoriously long
waiting lists. The limited time frames imposed on ex ante merger review would
make such an approach impractical. At a more theoretical level, a conflict of laws
approach to jurisdiction is normally applied to private disputes, with only the rights
of the parties to a transaction subject to judicial determination and which normally
permit parties to determine in advance their preferred jurisdiction.190 This
principle of party autonomy cannot be justified for laws designed not to regulate
voluntary activity between parties, but to protect the welfare of non-party
consumers. Absent agreement of the parties, private international law relating to
commercial activity between private parties generally applies the law of the
jurisdiction with which the transaction has its closest and most real
connection.191 This is not always easy to determine in relatively simple
contractual cases and application in relation to mergers, in which transactions
might have significant economic effects in markets far removed from the physical
location of the parties, would generate significant dispute and uncertainty.192
A conflict of laws approach is also problematic in the case of economic-based
law, which require economic analysis of predicted effects, so that even
application of the same substantive laws might lead to divergent results.193
190
191
192
193
In relation to commercial disputes between parties, private international law generally

recognises the principle of party autonomy: see PE Nygh and Martin Davies, Conflict of
Laws Australia (7th ed, 2002) 358.
Bonython v Commonwealth [1951] AC 201 at 219 per Lord Simonds. See also Nygh and
Davies, above n 190, 367.
Even where the appropriate law is determined by private international law principles, a
forum non conveniens doctrine will generally be applied in common law courts and in other
jurisdictions to determine jurisdictional competence: Julie Clarke, Mirko Bagaric, James
McConvill and Richard Edney, International Commercial Law: Principles and Practices
(2006) 256.
Unlike, for example, sale of goods, in which a simple objective assertion may be made about
legal rights and obligations pursuant to a single governing treaty (facilitated by United
Nations Convention on Contracts for the International Sale of Goods 1980 (CISG)) with the
result the same regardless of the jurisdiction in which the assessment is made, economic
law such as these deal with competitive effects of mergers do not lend themselves to such
Chapter9|Page458
Unlike traditional conflict of laws jurisdictional allocation which arise only when
the application of substantive laws in different countries would lead to divergent
outcomes, in relation to merger laws it is typically the application of such laws to
particular market conditions and based on nationally developed analytical
techniques that is likely to generate such conflict, rather than the laws
themselves. The commonly adopted forum non conveniens approach to
jurisdictional allocation in private international law is therefore likely to consider
several jurisdictions competent to hear a merger.
As a result of these anticipated difficulties, even a modified jurisdictional conflict
rule designed to allocate jurisdiction to the country with which the transaction had
its most real connection would be problematic and is likely to generate more
problems than it solves.
Alternative approaches that have been suggested for jurisdictional allocation
involve coordination between interested member countries to determine a lead
jurisdiction based on a set of multilaterally agreed rules specific to transnational
merger review or the establishment of a specialized supranational panel to
identify, based on agreed methodology, the most appropriate lead jurisdiction,
with jurisdictional allocation to be binding.194 In addition to generating further
delay by creating an additional procedural layer for transnational review, reaching
an agreement to cede power to another country, even pursuant to agreed rules,
would be extremely difficult,195 especially as such an approach favours the
interests of larger jurisdictions in which the firms are more often registered.
there might be one standard for any given transaction or practice. The
standard might be the law of the country with the most contacts. All other
jurisdictions could be bound to defer. This possibility, which could operate
194
195
objective assessment. It does not, therefore, lend itself to a simple conflict-of-laws approach
designating an appropriate national law and regulator.
Campbell and Trebilcock (Kindle Edition), above n 110, locations 2458-66. See also
discussion of these proposals in Wilson, above n 2, 242.
See, eg, Giannino, above n 152, 15-16, Utton, International Competition Policy, above n 10,
87 and Campbell and Trebilcock (Kindle Edition), above n 110, locations 2475.
Chapter9|Page459
somewhat like a conflicts-of-law rule, has many attractions, but rules of deference
are not simple. Moreover, such a standard could invite protection of national
champions; and it would end up privileging the law of the two dominant-player
jurisdictions in the world the United States and the European Union, home to
most multinationals the exclusion of the rest of the world.196
As noted in chapter 6, whether one nation has a greater claim of right than
another will not be obvious;197 the merging parties might operate in different
jurisdictions, competitors might be in another and consumers in yet another. The
impact of the merger, in such a case, would be broadly and differently felt and
the evidence required for analysis may be similarly scattered.
A further difficulty lies in the fact that a binding deference to a single national
regulator effectively precludes private party actions198 and effectively eliminates
the role of courts in other nations. Aside from the constitutional issues, there are
some fundamental theoretical objections to vesting exclusive jurisdiction to a
single national regulator over a merger having transnational effects.
The prospect of reaching an agreement between a significant number of
countries to cede central jurisdictional allocation authority of this nature is,
therefore, likely to be slim, even if constitutionally viable in all countries, and
probably less politically palatable than ceding jurisdiction to a supranational
regulator,199 particularly where the merger will have significant impact in more
than one jurisdiction and the merger is of national significance to both.200
196
197
198
199
200
Fox, GE/Honeywell, above n 101, 358 [footnotes omitted].

Fox, Evidence to Antitrust Modernization Commission, above n 12, 6.
Campbell and Trebilcock (Kindle Edition), above n 110, locations 2458-66.
See, eg, Wilson, above n 2, 247 and Campbell and Trebilcock (Kindle Edition), above n 110,
location 2475.
See, eg, OECD Committee on Competition Law and Policy, 'CLP Report on Positive Comity'
(Report No DAFFE/CLP(99)/19, May 1999) 13, quoting Allan Fels, Trade and Competition
th
in the Asia Pacific Region (Speech delivered at the Economic Society of Australia, 24
Conference of Economists, Adelaide, 28 September 1995) 6, Utton, International
Competition Policy, above n 10, 87 and and Giannino, above n 152, 243.
Chapter9|Page460
9.4.3 Mutual recognition

The second type of procedural clearance system that has been mooted involves
the mutual recognition of a merger clearance decision made by the state in
which the merger would have its greatest impact.201 This would appear to
produce many of the problems of a single jurisdiction approach without
associated benefits. For example, it would not alleviate the burden of multiple
filing which a single jurisdictional approach might and, by failing to provide for an
early allocation of jurisdiction, would not alleviate the cost of first stage multiple
reviews.
The only apparent benefit of such a system would be increased certainty for
parties and the elimination of conflicting decisions. However, reducing conflicting
decisions, while possibly beneficial to parties, may not maximise global modern
consumer welfare202 and would not limit tensions that might arise between
countries where they perceive that their economic interests have been brushed
aside to protect the national interests of the lead jurisdiction.
As a concession to national interest, Fox suggests that mutual recognition might
be contingent on the fact that no distinct relevant market exists in the former
state and possibly also if market links with the former state are insignificant.203
However, in cases where conflict is likely to arise, this criteria is likely to be
satisfied, so the prospect of conflicting remedies would remain and the perceived
benefit of a mutual recognition system reduced or even eliminated.
201
202
203
Fox, Can We Control Merger Control?, above n 110, 83. Fox adds a proviso that no
distinct relevant market exists in the former state and possibly also if market links with the
former state are insignificant. See also J William Rowley, Omar K Wakil and A Neil
Campbell, 'Streamlining International Merger Control' (Paper presented at the EC Merger
Control 10th Anniversary Conference, Brussels, 14 September 2000) 25 and ICPAC Final
Report, above n 2, 84.
See discussion from page 438, above.
Fox, Can We Control Merger Control?, above n 110, 83.
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A system of mutual recognition of mergers is, therefore, not likely to significantly

reduce the cost burden of multiple reviews.
9.4.4 Single filing
A more popular option sometimes advanced for a merger clearing house involves
an agreement to recognise a single merger filing as sufficient to satisfy PMN
requirements in all member states. This would involve no deferral of decision
making power and consequently may be more politically palatable than the
previous options mentioned.
The proposal would involve either recognising filing in one jurisdiction or requiring
parties to file a common form to a central administrative body. Either option
would require the filing to be accompanied by a confidentiality waiver which
would facilitate dissemination of the notification between interested countries.
For example, Fox suggests that a single notification be made by parties to a
transnational merger to either a central clearing house or lead jurisdiction based
on greatest apparent impact, with a requirement that the centre or lead
jurisdiction announce the fact of the filing to member nations204 who could
then request a copy of that notification. As a concession to confidentiality
concerns, Fox suggests that merging parties should have the ability to contest
the jurisdiction of a requesting country before the filing is sent to that country.205
In order for notification to a single national jurisdiction to constitute a recognised
filing in all member states, the notified jurisdiction must have in place a
recognised notification template.206 In the event of notification, the notified
jurisdiction would be required to notify other member states and, upon request,
204
205
206

Ibid 87. See also Giannino, above n 152, 16, 247.
A recognised template refers to a template that has been accepted by other member states
as sufficient to satisfy the information requirements should they desire to conduct their own
initial review of the merger: see, eg, Fox, Can We Control Merger Control?, above n 110,
83-84.
Chapter9|Page462
provide them with copies of the notification so that they could initiate their own
review.
Alternatively, notification could be made to a central administrative body whose
sole responsibilities would be to receive the notification, possibly to check it for
compliance purposes, notify member states of its receipt, and distribute it to
interested parties. This may or may not depend on agreement for a common
filing form. As with a de-centralised approach, it may be considered sufficient if
the parties satisfy the filing requirements of a single jurisdiction which meets
certain minimum standards. This notification could then be duplicated and
distributed to other interested competition agencies.
Either approach may have the benefit of preventing multiple reviews for relatively
small transnational mergers, unlikely to harm welfare in multiple jurisdictions, as
well as reducing initial compliance costs for parties.
A model for such a system is provided by the US state/federal Compact
agreement.207 To reduce the chaos of multiple filings under state and federal
laws, agreement between federal authorities and 43 states was reached by which
any party to a proposed merger subject to an HSR filing may voluntarily file a
photocopy with the liaison state. The liaison state must give notice of the filing to
all other states that are signatory to the Compact, and any interested member of
the Compact may obtain a copy of the filing from the liaison, all subject to
confidentiality constraints.208 It has been suggested that this experience could
provide inspiration for a common clearing-house for receipt of merger filings and
their dissemination to interested nation-states.209
There are, however, some difficulties associated with such as system at an
international level. First, notification to a single agency would transfer some of
207
208
209

Agencies and the State Attorneys General (US).
Ibid 86.
Chapter9|Page463
the cost of notification to the competition agencies and, perhaps,

disproportionately to the notified agency. This cost may, however, be
manageable if, for example, member agencies agreed upon payment of fee in
the event of a request for a copy of a notification (either from the parties to the
proposed merger or the interested authority) designed to cover only the cost of
duplication and transmission of the notification. Such an agreement would
ensure that the cost of information sharing was born appropriately by the parties
and/or agency involved in its review, rather than being levied on a single party or
agency.210 Alternatively, if notification was made to a central agency it could be
financed by member states proportionately to the number of reviews they
conducted or by parties through the imposition of a central filing fee.
A further problem nonetheless remains. By dissemination of transnational
merger notifications, or dissemination of notice that a transnational notification
had been made, all member states, whether initial notification occurred nationally
or centrally, would receive notice of a greater number of mergers than would
otherwise be the case. As a result, national authorities will be required to
evaluate more notifications whether to determine whether a full copy of the
notification was required (where only notice of a notification is disseminated) or to
evaluate that notification (where full dissemination occurs) than is currently the
case and this may overwhelm the resources of some authorities, particularly in
smaller states accustomed to more modest volume of merger notifications, and to
significantly increase the cost of regulation for others.
There are two possible ways to overcome this difficulty. The first is to require the
notified or central authority to determine, by reference to existing or agreed
notifiablity criteria, which countries have a legitimate interest in the merger and
210
There is a strong argument to be made that public interest legislation of this nature should
impose cost on reviewing jurisdictions rather than parties, where the conduct in question is
overwhelmingly consistent with legal requirements: see, eg, Janet L McDavid, Phillip A
Proger, Michael J Reynolds, J William Rowley and A Neil Campbell, 'Best Practices for the
Review of International Mergers' in Rowley, International Merger Control: Prescriptions for
Convergence, above n 2, 5.
Chapter9|Page464
therefore should be notified. This would, however, impose significant costs on

the notified or central authority and, more importantly, is unlikely to be a politically
palatable option. Countries are unlikely to agree to confer power on a central
administrator to determine which countries are likely to have an interest in the
proposed merger and even less likely to confer that power on another national
authority. Even if such agreement could be reached, the cost of making that
determination would be significant and could delay the merger review process.
The other possibility is to require parties to nominate to which jurisdictions copies
of the notification should be provided.211 This would, however, require parties to
continue to incur the cost of determining notifiability in multiple jurisdictions.
Another difficulty lies is the fact that unless targeted national information for
individual jurisdictions is required in the notification, which is unlikely if an existing
national notification form is considered sufficient, it may be difficult for other
member states to assess their economic interest, even after receiving a copy of
the notification. Related to this is the issue of national language and currency. A
single filing would, in some cases at least, require all member states to accept
filings in a foreign language, with sales figures produced in foreign currency in
some cases. This is unlikely to gain the support of national authorities or their
governments.
For these reasons, the cost of a single jurisdiction approach, absent a common
filing form and specification by parties of interested or notifiable jurisdictions, is
likely to exceed the anticipated benefits.
9.4.5 The facilitative lead jurisdiction approach
An approach providing for a facilitative, rather than binding, procedural lead
jurisdiction for merger review differs in a number of significant respects from the
other lead jurisdiction approaches discussed above. This approach would not
211
See, eg, Rowley and Campbell, above n 4, 37.
Chapter9|Page465
involve deferral of decision making power212 or necessitate negotiation of a single

filing form (although it could also involve aspects of the latter). As a
consequence, it might not require parties to cede sovereignty in the way that
alternative approaches would.
A facilitative lead jurisdiction approach would allow for limited procedural deferral
to a nominated or agreed lead jurisdiction, while allowing parties to retain their
own national substantive laws and procedures213 and decision making authority.
Although such an agreement would still require identification of lead jurisdiction
(whether based on the jurisdiction having closest connection to the parties or the
consumers/competitors), it may be possible to develop general principles for the
determination of a lead jurisdiction by consensus of interested parties and such
an approach might be politically palatable given the absence of any requirement
to cede decision-making power.
This sort of coordination of information gathering and joint evidentiary hearings
already occurs to a some extent where the relevant reviewing authorities enjoy
strong bilateral relations, most notably between the EU and US, but such
agreements offer less significant benefits where the merger concerns a
geographic market extending beyond the scope of the parties to the
agreement.214 Greater benefits and efficiencies might be enjoyed by providing for
broader cooperative efforts at the multilateral level.
The core benefits of nominating a facilitative lead jurisdiction to coordinate the
gathering of information from parties, competitors, consumers and economic
experts, would lie in the significant reduction of compliance costs for parties215
212
213
214
215
See further Campbell and Trebilcock (Kindle Edition), above n 110, location 2402, who
recommend that a lead jurisdiction could provide a recommendation to other agencies
involved. See further Wilson, above n 2, 245 and ICPAC Final Report, above n 2, 84.
See, for example, proposal by Campbell and Trebilcock (Kindle Edition), above n 110,
locations 2396-2427.
See Campbell and Trebilcock (Kindle Edition), above n 110, locations 2398-2405.
Chapter9|Page466
and in avoiding duplication in information requests made by authorities to parties

and third parties involved in providing market information. It would also have the
practical benefit of making information more accessible where it is located in
different jurisdictions. In addition, an indirect benefit of such coordination may be
the facilitation of greater discussion and understanding between states of
possible competition issues arising from the reviewed mergers, which could help
reduce the prospect of divergent outcomes and of conflict between reviewing
authorities.216 In this respect, it may also facilitate direct discussion of remedies
between interested states which might assist in achieving appropriate and
consistent remedies where thought necessary. Finally, coordination of
procedures, by facilitating the sharing of analytical methodology, can also assist
in producing soft harmonisation of substantive standards. 217
The existing US Compact arrangement218 provides one model for the operation of
a facilitative lead jurisdiction approach. Pursuant to the Compact, the DOJ(AD),
FTC and State Attorneys General can, subject to confidentiality waivers from
parties, coordinate collection of information for investigating mergers. This
agreement resulted from recognition that, even internally, the simultaneous
investigation of mergers by federal and state authorities could result in
duplicative, overlapping and sometimes inconsistent requests for information that
can increase considerably the costs of compliance and impede coordination219
and the inability of federal and state enforcers to discuss the merits of the
proposed transactions based upon commonly collected information can lead to
divergent enforcement conclusions.220
216
217
218
219
220

n 69, 4-5.
See Fox, Can We Control Merger Control?, above n 110, 86.
Agencies and the State Attorneys General.
Department of Justice (US), 'Justice Department Announces New Procedure to Coordinate
Merger Antitrust Investigations with States' (Press Release, 6 March 1992).
Ibid.
Chapter9|Page467
To coordinate exchanges of information between the federal authorities and state

authorities in the US, the Compact provides for the designation of a lead state
jurisdiction with which the federal authorities should cooperate,221 while allowing
each jurisdiction the freedom to make its own decision on the relevant merger.
Despite the potential benefits, there are a number of limitations and challenges
associated with this approach. The first limitation is the fact that it would normally
not be suitable for the initial phase of a merger review. Deciding on a lead
jurisdiction and coordinating information gathering exercises within the limited
time frame assigned for initial review, even if possible, is unlikely to produce
significant benefits.222 Parties would still be required to determine notifiablity and,
where thresholds are met, notify in accordance with multiple and divergent filing
systems. As a consequence, it would not produce any significant cost savings for
mergers cleared at the early stages of a merger review.
Second, although the facilitative lead jurisdiction would not be conferred with
decision making power, agreeing on how to assign a lead jurisdiction in each
case might prove difficult. Even if agreement on a set of principles for making
such a determination could be reached, the application of those principles in
each case might prove time consuming and, at times, divisive, which might hinder
rather than help cooperative efforts in some cases.
Third, to facilitate the exchange of party information, parties would be required to
agree to sign confidentiality waivers and some modification to existing
confidentiality laws might be required to facilitate the sharing of such information.
However, while it is unlikely to be feasible or desirable to require parties to agree
to confidentiality waivers, if the benefits to parties of granting such a waiver were
considered sufficient it is likely they would do so voluntarily, as evidenced by the
221
222
Ibid.
This is because the initial screening of a merger is normally based largely on information
already provided in initial notification, obviating the need for such coordinated activity.
Chapter9|Page468
general willingness of parties to provide such waivers to facilitate existing levels

of cooperation between interested parties.223
Fourth, the cost of acting as a lead jurisdiction might be high. Concern might be
raised that the lead jurisdiction, would incur a disproportionate amount of the
cost associated with the review, with other investigating authorities able to free
ride on their efforts. However, coordinated review of information gathering need
not equate with single-jurisdiction information gathering.224 As a result, a
coordinated system might in fact disperse cost most efficiently between agencies.
For example, it might assist by ensuring that each interested country was
responsible for gathering the necessary market information within their state, or
by hosting interviews with third parties (competitors or customers) domiciled in
their state.
Finally, a facilitative lead jurisdiction would not provide any guarantee against
divergent outcomes.225 Even if a lead jurisdiction were to provide
recommendations for the outcome of a transnational merger review, the nonbinding nature of any such recommendation would leave national authorities free
to reach different conclusions and apply different remedies where they
considered it necessary to comply with substantive law.
9.4.6 Analysis and Conclusion
Many of the options that have been proposed for a procedural clearing house are
not currently feasible. A deferred jurisdiction approach is unlikely to be politically
feasible and, because of the difficulties of reaching consensus as to an
223
224
225
See, eg, ABA Section of Antitrust Law, International Antitrust Cooperation Handbook (2004)
52, fn 29.
Compare Campbell and Trebilcock (Kindle Edition), above n 110, locations 2398-2405, who
envisage that a lead jurisdiction would fulfil a centralized information gathering function,
solicit comments from those agencies whose markets are potentially effected by a particular
transaction, and undertake an initial assessment of the relevant market(s) and the likely
competitive effects therein.
See, eg, Wilson, above n 2, 245.
Chapter9|Page469
appropriate lead jurisdiction and the improbability that any lead jurisdiction would
put global welfare before national welfare in cases producing negative
externalities, is likely to prove sub-optimal in maximising global consumer
welfare.
The mutual recognition approach suffers from many of the failings of the deferred
jurisdiction approach and should also be rejected.
The single filing approach has the potential for significant cost savings, but the
limitations for non-notified authorities, in terms of targeted national information,
language and currency preferences, and the potential increase in initial screening
requirements for many countries, means that it too is likely to fail.
The final option, for a facilitative lead jurisdiction, could, however, lead to some
significant benefits which are likely to outweigh any potential difficulties and
limitations. The relatively modest nature of the proposal, building on existing
bilateral and, in some cases, multilateral cooperation, is likely to make this
approach politically palatable to OECD member states. It should, therefore, form
part of a multi-layered approach to the internationalisation of transnational merger
regulation.
9.5 Common Filing Form

9.5.1 Overview
An alternative approach to reducing the cost burden of multiple notifications
involves providing for a single common notification form for transnational
mergers.226 While a number of the previous options mentioned have
incorporated the concept of single notification and/or a common notification form,
226
See Corones, above n 140, 284. See also Rowley and Campbell, above n 4, 9,
Whish/Wood Report, above n 2, 108, Recommendation 6 (recommending the creation of
one or two model filing forms, which request common information in a single format, and
which use different country annexes as appropriate) and Paul, above n 164, 123.
Chapter9|Page470
this option differs in that it involves only a common filing form with no further
codification of substantive law or procedural principles and no deferral of
decision-making power to a central or lead regulator. Consequently, the only
agreement required of member states would be on the nature and content of the
form itself.
Agreement on a common filing form could draw from current best practice in
order to settle on a common set of core information required for initial filing. To
ensure relevant domestic information was provided, such as local turnover, a
limited country-specific annex could be prescribed to assist in the initial screening
process.227 Specific language requirements and possibly currency conversions
might also be prescribed.
Any common filing form should apply only to transnational mergers. Purely
domestic mergers will frequently benefit from information requests more directly
targeting national sales and market information, so that mergers that do not
qualify as transnational should continue to file pursuant to existent domestic
requirements, although a common transnational form might also lead to a general
convergence between domestic and transnational filing requirements.
9.5.2 Benefits of a common filing form
A common filing form employed by OECD countries and observers could
significantly reduce the cost for parties by effectively enabling them to produce a
single set of information, rather than requiring them to assess and adhere to
different filing requirements necessitating similar, but not identical, information in
various different formats.228 Currently, different levels of information are
227
228
See, eg, Dodge, above n 185, 39 and Whish/Wood Report, above n 2, 16, recommendation
6.
See, eg, Rowley and Campbell, above n 4, 28. This might also reduce or eliminate the need
for local counsel at early stages of a merger review process. See also Giannino, above n
152, 250.
Chapter9|Page471
requested, the same information is asked in different ways,229 and parties are
frequently required to notify using particular styles and form, including paper size
and format. These differences, which can make initial notification more
burdensome than is necessary to meet the legitimate interests of competition
authorities,230 could be eliminated by the adoption of a common form.
A common filing form would also have some less tangible benefits for parties and
authorities. Particularly accompanied by a requirement for confidentiality
waivers, it might facilitate more productive consultation between interested
countries231 and, in time, assist soft convergence on merger analysis.
Such harmonization would not only avoid some duplication, but would also
enhance cooperation among national authorities who would be reviewing the
same information presented in the same format.232
This, in turn, could reduce the risk of conflicting rulings.233

9.5.3 The feasibility of a common filing form
There are a number of potential difficulties which impact on the feasibility of the
adoption of a common form. They include reaching agreement as to the type and
extent of information required and the number of copies to be provided to each
notifiable authority, providing recognition for different languages and currencies
adopted in OECD countries, determining whether notification would proceed to
national authorities or a central notification registry, providing for confidentiality
229
230
231
232
233
See Rowley and Campbell, above n 4, 32-33.

The United States, for example, provides a style guide which requires, amongst other things,
the use of US sized paper for submitting proposals. See also OECD, Report on Notification
of Transnational Mergers' (Committee on Competition Law and Policy,
DAFFE/CLP(99)2/FINAL, Feb, 1999) 2, Lise Davey and John K Barker, 'Merger Review
Benchmarking Report' (Competition Bureau (Canada), 2001) 122 and Rowley and
Rowley and Campbell, above n 4, 12.
See generally Paul, above n 164, discussing the potential benefits of a common form. See
also Budzinski, Towards an International Governance of Transborder Mergers?, above n 69,
23.
Chapter9|Page472
waivers, determining whether use of the form would be mandatory or optional,

reaching agreement on a two-stage review process and encouraging parties to
adopt the form.
(a) Agreement on the content of a common filing form
Agreement on a common form would require countries to agree on informational
requirements that are currently the subject of considerable divergence. There is,
however, often a core set of information required by regulators to make an initial
assessment on whether a merger is likely to raise competition concerns. The
information requested is, regardless of minor variations in substantive laws,
generally requested for one purpose, and that is to assess the competitive effects
of the proposed merger. 234 Consequently, unlike substantive laws and merger
analysis for which there might not be an optimal approach or, if there is, the
approach might differ between jurisdictions and might evolve over time, there is
likely to be a an objectively best way of asking for information235 and countries
might be prepared to reach an agreement on an appropriate standard to facilitate
adoption of a common form. 236
To ensure a common form achieves the cost saving benefits for which it is
designed, it would be important that, in reaching agreement, states did not
gravitate toward designing a catch-all information request, deferring to the most
onerous of existing templates. In this respect competition authorities in OECD
member countries have, as members of the ICN, already adopted
recommendations that informational requirements for initial notification be limited
to that necessary to determine whether the transaction raises competitive issues
234
235
236

See ibid 86. Compare Giannino, above n 152, 250 who argues that the current national
notification forms reflect the procedural and substantive rules of their respective merger
control laws and that this would make any agreement on a common form particularly
complicated.
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meriting further investigation237 and, further, that they should elicit the minimum
amount of information necessary to initiate the merger review process.238 The
production of a common form would provide states with a renewed opportunity to
rationalise their current approach to first stage information requests to comply
with this recommendation.239
In addition, the OECD has already produced a useful framework for the
notification of transnational mergers which suggests the sort of information that
should be requested, including identifying markets in which proposed
transactions might have an effect, describing operations of the parties and
submitting certain basic documents, such as the transaction agreement and
recent annual reports, as well as basic information about the parties.240
It may be possible, therefore, for OECD nations to draw on this framework and
more recent ICN Guidance on information requirements for merger notification,241
to agree to a set of questions designed to illicit the information necessary to make
a preliminary assessment about the likely competitive impact of the proposed
transaction.242
In order to assist in obtaining agreement and to appropriately recognise the need
for jurisdictional-specific merger information, such as national turnover, countries
237
238
239
240
241
242
2002, amended 2003, 2004, 2005, 2006), recommendation V(A).
2002, amended 2003, 2004, 2005, 2006), Working Group comment 1 to recommendation
V(A). See also ICN, Report on the Costs and Burdens, above n 13, 13, citing Evidence to
International Competition Policy Advisory Committee, Washington DC, 3 November 1998
(Barry Hawk), transcript at 47-49, who suggested reducing the amount of information
required at initial review stages to a minimum amount of information so the agency can
make an intelligent decision as to whether or not there is a concern.
See, eg, Pfunder, above n 63, claiming that certain information required by the notification
form is seldom, if ever, useful in assessing the competitive significance of the reported
transaction.
OECD, Report on Notification of Transnational Mergers, above n 230.
ICN, 'Information Requirements for Merger Notification' (Merger Working Group, June 2009).
See, eg, Rowley and Campbell, above n 4, 33.
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should be permitted to require provision of a country-specific annex243 to the

common form, requesting targeted national information designed for the
purposes of initial assessment. This might include basic corporate and contact
information for each party, brief descriptions of relevant businesses and affiliates,
and annual reports.244
Each affected jurisdiction should also receive a separate (but similarly structured)
annex containing information that is relevant to that particular jurisdiction. This
might include sales/production data for relevant products sold/produced in the
jurisdiction, along with customers, suppliers and competitors lists.245
This would allow for a common core of information to be provided in multiple

jurisdictions while also facilitating the provision of domestically focussed
information, thus ensuring that countries receive the information necessary to
determine potential domestic impact without losing the benefits of a common
filing form.
A copy of both the primary form and the current annex form for each country
should be made available centrally from the OECD to relieve parties and their
advisors of the burden of identifying any current national form requirements from
multiple locations.
(b) Number of copies of notification to be provided
Agreement should be reached on an appropriate number of copies of notification
to be filed. Many jurisdictions require multiple copies of notification246 to be
243
244
245
246
See, eg, OECD, Report on Notification of Transnational Mergers, above n 230, 2. See also
Whish/Wood Report, above n 2, 65.
Ibid. Rowley and Campbell warn (at 33) that such annexes must be used sparingly, in order
not to lose the benefits of a streamlined and coordinated process. Over time, many of the
distinctions between these country-specific annexes might be expected to disappear.
For example, the EU currently requires one original and five paper copies of a notification
and an additional 32 copies on CD-Rom: European Commission, Communication Pursuant
to Article 3(2) of Regulation 802/2004 Implementing Council Regulation (EC) No 139/2004
on the Control of Concentrations Between Undertakings [2006] OJ C 251/2. The United
Chapter9|Page475
provided. It is suggested one copy should be considered sufficient, with a

possible exception for the EU, which currently requires 35 copies to be provided
for distribution to member states. Although one is suggested as sufficient, with
authorities to incur the cost of additional duplication if desired, it would be
possible to reach a meaningful, cost-saving, agreement on a notification form
while allowing individual countries to specify the number of notifications required.
(c) Recognition of different languages and currencies
Related to the issue of jurisdiction-specific content is the issue of multiple
language requirements. It is unrealistic to expect agreement to be reached on a
common language for notification given the number of separate language
requirements that currently prescribed,247 and in any event this is not essential to
achieving significant cost and efficiency savings. The cost of translating a
common core of information into multiple language requirements, where multiple
jurisdictions are required to be notified, is a legitimate cost of doing business and
imposes no greater burden than is necessary for authorities to make their
determination as to whether or not to further pursue a merger. Were the
translation not done by the businesses involved it would need to be done by the
relevant authorities which would, in most cases, impose a more direct cost on the
taxpaying public. Imposing the burden on business and not regulators (who are
often publicly funded) is, therefore, not unreasonable and involves on an
allocation of cost, rather than generation of a new cost of review. Nevertheless,
increased efficiencies in relation to language requirements might still be possible.
For example, a number of jurisdictions have a language requirement for their
notification form, but allow the majority of supporting documents to be annexed in
the home language of the business involved, provided summaries of each
document are translated into the preferred language. It is suggested that this
247
States, on the other hand, requires two copies to be submitted and some other countries
require only a single copy.
Currently, in OECD jurisdictions alone, there are 19 different languages prescribed.
Chapter9|Page476
would be appropriate for a common stage 1 notification form and would be is

consistent with ICN recommendations for initial notification.248
Similarly, concession may be needed to require parties to convert financial
information into the currency of the notified jurisdiction, although, as with
language requirements, it may be possible to limit this concession to financial
information pertaining only to transactions occurring within the notified jurisdiction
as part of the jurisdictional annex.
(d) National or central notification?
Notification should continue to be made separately to national authorities, rather
than to a central authority to receive and disseminate.249 Although multiple
national notification necessitates some duplication for parties, use of a central
authority would suffer the difficulties discussed in the context of a single filing
option. These include the cost of establishing the necessary bureaucracy to
support centralised receipt and distribution of notification and the inability to
address different local language and currency requirements. The expense of
agreeing to, establishing and maintaining a central authority for the sole purpose
of receiving and distributing transnational merger notifications would appear to
outweigh any potential benefits gained through reducing some duplication of
material for the parties.
(e) Confidentiality waivers
The ability for agencies to discuss and exchange confidential information is vital
to facilitate public and private transaction cost savings250 associated with a
common filing form. Currently, authorities in most jurisdictions do not have the
ability to share protected confidential information in the absence of explicit
248
249
250
See generally ICPAC Final Report, above n 2, 16.

In either case parties would be required to determine jurisdictions in which they were
required to notify in order to comply with any country-specific annex requirements.
Chapter9|Page477
authorizing legislation or a formal treaty.251 Although the need for sharing of

party-supplied information may be less acute where a common form is adopted
which provides different authorities with a common core of information,
discussion of that information between authorities and exchange of any additional
or relevant country-specific information would be better facilitated by the provision
of confidentiality waiver. A common form system (at least where optional) could
be made conditional on the provision of such waivers in a way that would not be
possible under a lead-jurisdiction scheme which would remain dependent on
mandatory country-specific notifications. To maximise the benefits of a common
form scheme, parties should be required to provide a confidentiality waiver as a
pre-requisite to participation in such a scheme,252 provided appropriate
safeguards can be incorporated to protected inappropriate disclosure.
merging parties are legitimately concerned about the risks of downstream
disclosure of confidential information or documents to other governmental authorities
and/or third parties. Any multijurisdictional merger review treaty must simultaneously
address the need for inter-agency exchanges and appropriate safeguards. 253
While any waiver agreement should provide enforcement officials with

unrestricted access to share information with other signatory jurisdictions
reviewing the transactions,254 it should also prevent the retransmission of
information to other federal or state agencies or third parties without consent. 255
(f) Voluntary or Mandatory use of the form?
A common filing scheme might either be mandatory or voluntary for transnational
mergers,256 the latter enabling parties to opt-in or opt-out of the scheme. A
voluntary option is to be preferred. Some parties might prefer, at least initially, the
251
252
253
254
255
256
Ibid 31.
Ibid 31 and 36 and see also Whish/Wood Report, above n 2 and Rowley, Wakil and
Ibid 37.
Ibid. See also Giannino, above n 152, 254.
See, eg, Fox, Can We Control Merger Control?, above n 110, 86.
Chapter9|Page478
experience with existing notification forms, particularly where only a small number
of jurisdictions are required to be notified. It might also be desirable for parties to
be able to choose to bypass initial filing forms and adopt a long form option,
where available, in those jurisdictions in which the parties have little doubt the
merger will be the subject of more detailed examination. Conversely, some
countries might offer a fast track process that might be suitable for some
transnational mergers. A voluntary scheme would also enable parties who were
concerned about the sharing of confidentiality issues, to avoid any waiver
obligation imposed by a common form.
(g) Two-stage review process
For those nations that do not operate a two-stage system of review (whether
formally or informally), the introduction of a common filing form option might
necessitate significant structural change to the existing merger review process.
However, as the majority of OECD jurisdictions provide for either an informal or
formal two-stage review process to facilitate early clearance of mergers raising
no competition concerns,257 this is unlikely to present a insurmountable hurdle to
a common filing form agreement.
(h) Obtaining support from business
The failure of the France/UK/German filing form258 makes clear that to be
effective a common notification form must contain appropriate incentives for
parties.259 In particular, adoption of the form must not be more onerous for
257
258
259
Of those states imposing a mandatory notification requirement, only Turkey and Poland
have no formal or informal separation of review stages (although Turkeys first stage is quite
short and it provides scope for an extension of this time frame, so may be likened to a two
stage process).
At initial stages of implementation, at least, a common form would need to provide
incentives for parties to use the common form, or they (or more particularly their advisors)
may continue to favour an approach that provides them with greater certainty, even if that
option is more expensive.
Chapter9|Page479
parties than submitting existing forms.260 The France/UK/German form faired

poorly in this respect. It involved only a limited number of jurisdictions, did not
apply where the EU had jurisdiction over the merger, and was often more
onerous and expensive than providing separate filings. The broader scope of an
OECD-wide common form, and particularly the inclusion of the US and EU, would
significantly alter the cost-benefit analysis by comparison with the
France/UK/German attempt.
In addition, it is suggested that filing through the common notification form should
not be subject to any filing fees. Filing fees represent a clear tax on mergers
which cannot be justified where mergers raise no competition concerns.261 Such
fees are made possible only by the ex ante nature of the process; no such fees,
for example, apply to cartel or vertical restraint investigations where authorities
conclude there is no contravention of the governing law. Its use in merger cases
is, therefore, opportunistic and, while frequently used to fund merger review and
other enforcement activity by competition authorities,262 there is no sound
justification for the imposition of such a tax in circumstances where the mergers
involved raise no competition concerns. This is particularly so where the tax is
imposed on the basis of an arbitrary turnover threshold (rather than a general tax
on all merger activity), so that some anti-competitive mergers will escape the tax
while many lawful mergers will have the tax imposed upon them. However, if
agreement on a fee proved unattainable, the common filing form could still be
adopted with national regulators remaining free to set their own filing fees.
260
261
262
Whish/Wood Report, above n 2, 110, recommendation 6. The authors warn against

harmonizing up to the most onerous filing form.
See McDavid, Proger, Reynolds, Rowley and Campbell, above n 210, 5. See further
chapter 4 at 229-230.
See discussion at para 9.4.5, above.
Chapter9|Page480
9.5.4 Analysis and conclusions

Although more modest than a binding supranational code, the cost of reaching
agreement on a common filing form is likely to be significant, so that it would be
important to ensure that the expected cost savings were sufficient to justify the
expense and difficulty associated with reaching agreement.263 In this respect, it
is likely that a common filing form could achieve sufficient long term cost savings
to justify this effort.
The agreement on a common form and its implementation, while less ambitious
than some of the other options put forward for international merger regulation,
remains a challenging and difficult proposition and history has also shown a lack
of enthusiasm for common notification forms. However, there has been more
significant convergence on substantive laws in recent years and increasing
recognition of the benefits of conflating costs and such an approach, while not by
itself achieving an optimal cost-benefit outcome for the regulation of transnational
mergers,264 would move a step closer toward such an outcome, so that
considerable energy should be devoted by countries to evaluating the possibility
of reaching and implementing such an agreement.
A common notification form for initial filing is a sensible, meaningful and
attainable response to the inefficiencies currently experienced by parties
proposing to merge.265 It would preserve national autonomy over the decision
making process and avoid the underregulation predicted for central or exclusive
national jurisdiction, while increasing the efficiency of the current concurrent
system of transnational merger review.266 In particular, a common form approach
263
264
265
266
See, eg, Whish/Wood Report, above n 2, 110, Recommendation 6.

It would not, for example, reduce the substantial costs and delays that exist in relation to
second stage reviews for those transactions raising initial competition concerns. Unlike a
global code it would not replace existing negative externalities associated with multiple
extraterritorial review with new externalities generated by under-enforcement. The existing
negative externalities remain and would not be mitigated by this approach.
See, eg, Rowley and Campbell, above n 4.
Chapter9|Page481
is targeted to reducing the most inequitable costs associated with the merger
review process; the notification costs incurred by the majority of mergers raise no
significant competition concerns and may be in the public interest.267 The
principal regulatory costs of those parties lies in determining notifiability in a
plethora of countries and in adhering to the divergent maze of filing requirements.
This cost is disproportionate for small mergers unlikely to raise concerns.
Although a common notification form would not eliminate the significant cost of
assessing notifiability, it would substantially reduce this cost burden,268 especially
if accompanied by an elimination of stage 1 filing fees. The more jurisdictions a
party is required to notify, the greater the benefits likely to be realised from the
adoption of a common form.
A common filing form option of this nature may also be politically feasible, or at
least not politically objectionable. In the initial phase of a merger investigation
(and arguably even where a merger is subjected to more thorough investigation)
the economic issues that arise are substantially similar in all jurisdictions,269
despite differences in substantive merger laws and it should be possible to
objectively determine an optimal way of requesting that information.
To be most effective, it should contain agreement not only on common form and
informational requirements, but should allow for the possibility of a very short
country-specific annex, restricted to requesting country-specific sales figures and
market information. The common form should also be voluntary, enabling parties
267
268
269
See, eg, ICN, Report on the Costs and Burdens, above n 13, 20, citing Evidence to
International Competition Policy Advisory Committee, Washington DC, 17 May 1999
(Joseph Winterscheid) trancript at 21-2, who stated that the focus should be on reducing
transaction costs of mergers which do not raise serious competitive issues.
See Rowley and Campbell, above n 4, 12.
See PriceWaterhouseCoopers, above n 8, 26.
Chapter9|Page482
to opt in to the common system or notify pursuant existing domestic notification

forms. 270
A common filing form of the type proposed would provide meaningful relief to
business burdened with multi-jurisdictional filings. It would ensure that in most
cases mergers unlikely to raise any serious competition concerns would be
relieved from the burden of divergent and copious informational requirements.
Such a common form might also enable greater and more meaningful
jurisprudence to emerge regarding the type of mergers likely to concern
authorities in various jurisdictions at the initial stages and could result in more
consistent outcomes for parties over the medium to long term.
9.6 Non-binding international principles

9.6.1 Overview
The work of the OECD and, more recently, the ICN, discussed in some detail in
chapter 7, has demonstrated the value of developing and promoting international
recommendations and best principles. Both the recommendations themselves
and the process of bringing together merger regulators to discuss new ideas and
different approaches to merger law and regulation,271 has resulted in a significant
level of soft harmonisation in relation to mergers. This form of soft law, or rules
of conduct, despite having no legally binding force, may have practical
270
271
See Rowley and Campbell, above n 4, who argue that an opt in (or perhaps opt out)
approach would be useful to allow merging parties (and perhaps agencies as well) to
determine when it would be appropriate to utilize a multi-jurisdictional review process.
n 69, 23, claiming that the personal interaction of the officials of jurisdictional competition
authorities should give rise to cognitive convergence (i.e., the views on specific merger
cases become harmonized due to the exchange of arguments and the cooperative review
process).
Chapter9|Page483
effects,272 such as progress toward national convergence of law and

procedure,273 without threatening the integrity of national sovereignty.274
The non-binding nature of the recommendations is also more likely to produce
recommendations that are dynamic and flexible, and therefore able to respond
and adapt to new developments, which is a quality normally lacking in hard-law
treaty obligations.
9.6.2 Location of non-binding principles
The majority of significant and effective international recommendations on
competition law and merger law specifically have taken place within the OECD
and, more recently, the ICN. Work toward cooperation and the continual
evolution of best practices for merger review should continue in both forums, as
both offer overlapping but different benefits for international merger review. For
reasons discussed earlier, the WTO, while frequently touted as an appropriate
facilitator for the development of competition law norms,275 would constitute a
poor option for the development and implementation of meaningful reforms in
merger regulation. In particular, the accommodations needed to garner
agreement from the 153 member states,276 all at different stages of economic
development and varying levels of competition law experience and expertise,
would almost certainly result in sub-optimal compromise consisting of only vague
principles. It also risks involving too many international bodies in debating and
promoting the same thing, leading to additional costs and agency fatigue.
272
273
274
275
276
Francis Snyder, Soft Law and Institutional Practice in the European Community in Stephen
Martin (ed), The Construction of Europe: Essays in Honour of Emile Noel (1994) 197, 198,
cited in Sokol, above n 103, 77. See also Sokol, above n 103, 97.
23, observing that knowledge of best practices will lead to procedural convergence - and
maybe even to substantive convergence in the long run - by awakening self-interest in
adopting more efficient methods of merger control.
Giannino, above n 152, 269.
See, eg, Sweeney, Global Competition, above n 27, 219 and 243.
WTO, Members and Observers (2010) World Trade Organization
<http://www.wto.org/english/theWTO_e/whatis_e/tif_e/org6_e.htm> at 8 January 2010.
Chapter9|Page484
A global norm-diffusion function for the WTO presupposes antitrust agencies'

interest in embracing it as yet another forum in which to discuss best practices.
Given the limited time and financial resources of antitrust agencies, particularly
those of the developing world, it is not clear that the WTO offers a forum uniquely
suited to create antitrust norms for which agencies should spend their limited time
and resources in meetings and negotiations. Other international institutions
have already established success in disseminating antitrust norms, 277
While general WTO principles might assist in the development of competition law
policies in developing nations, it would do little to alleviate the existing burden of
multi-jurisdictional merger review in developed nations and risks exacerbating the
costs associated with attempting to do so.
Continued efforts within the ICN virtual network, on the other hand, is vital.
Chapter 7 described the transformational effect the ICN has had, and continues
to have, on the development of international competition law best practice and
the facilitation of international cooperation, particularly in relation to merger
review. However, its limitations must also be acknowledged. The ICN is still a
relatively young body, with enthusiasm among regulators for its potential to
enhance cooperation and promote, softly, harmonisation toward objective best
practice. There is a risk, however, that the process, once apparently complete
in generating a set of recommended practices for target areas, may fall flat as
attention diverts to other areas of competition law concern.278
There is also a risk that its composition, currently including agencies in almost
100 jurisdictions279 at various stages of economic develop and competition law
experience, may limit the future ability of the ICN to achieve consensus for the
development of targeted and meaningful recommendations in the area of merger
review. This may limit the effectiveness of the recommendations within already
277
278
279
Sokol, above n 103, 90 [footnotes omitted].

Compare Budzinski who argues that ICN success should theoretically increase with
continued interaction: Budzinski, Towards an International Governance of Transborder
Mergers?, above n 69, 46.
John Fingleton, 'Introduction to the ICN' in John Davies (ed), Merger Control 2010: The
International Regulation of Mergers and Joint Ventures in 64 jurisdictions Worldwide, Getting
the Deal Through (2009) 401.
Chapter9|Page485
developed OECD jurisdictions. Even existing recommendations, particularly

those developed most recently, display symptoms of compromise resulting in
vague, convoluted and sometimes overlapping rules which, as a result, lose
some of the potency they might otherwise have claimed.
In addition, the ICN, while inviting significant levels of participation from
academics, business and other interested parties, is principally an agency-run
network which will necessarily be influenced by the agencies own enforcement
agendas.280 While at one level the governance of the ICN by national agencies
rather than government officials has been an important factor in the success of
the Network, it comes at some cost. Member agencies will be - rationally concerned more with alleviating their own cost burdens and raising their profiles,
including through increased cooperation, than in alleviating total cost burdens of
merger review and thereby optimising global welfare outcomes. Particularly in
relation to merger review, for which many regulators derive the bulk of their
enforcement budget, members might have little incentive to reduce cost burdens
on the parties,281 including through a reduction in the content of information
requests or through restricting review periods for merger assessment. This is
evidenced, in part, by the rather vague recommendations so far produced on
these issues.
The ICN suffers from a further limitation. The agency-driven nature of the ICN
recommendations, combined with their increasing scope, may carry relatively
little weight with government, especially where their immediate political interests
conflict. In this respect, it is notable that little substantive action has been taken
280
281
See, eg, McGinnis, Political Harmony, above n 18, 129, observing that international antitrust
regulators become a distinct class with a distinctive interest that is not likely to mirror the
interests of national governments, let alone citizens. See also Rowley, Wakil and Campbell,
above n 201, 23, claiming that [i]nstitutional inertia is a retarding factor. regulators often
lack strong incentives to push for reform their focus is inevitably their own corner of multijurisdictional transactions and they tend to be fond of their own way of doing things
See McGinnis, Political Harmony, above n 18, 128 and Rowley, Wakil and Campbell, above
n 201, 7, claiming that with large fees generated there is 'little incentive for those agencies to
advocate reductions, either in amounts or thresholds'.
Chapter9|Page486
by governments as opposed to modifications within the power of competition

agencies to give effect to the implementation of ICN recommendations.282
For
this reason, it has been observed that in remains unclear whether agency
cooperation through soft law institutions creates compliance or whether national
governments allow agencies to comply in order to further government
interests.283
Recommendations within the OECD and approved by the OECD Council, may
therefore provide an important supplement to ICN recommendations for OECD
countries.284 Council-level recommendations would provide increased incentives
for member state adherence.285 These incentives would also be enhanced by the
OECDs peer review process286 which would monitor compliance with
recommendations287 and demand accountability of member states, both
nationally, and also to other peers.288 This, in turn, provides a greater mandate
for domestic change.289 The OECD also benefits from the existence of a
Secretariat with permanent staff providing
282
283
284
285
286
287
288
289
See generally Rowley and Campbell, above n 249.

Sokol, above n 103, 80 [footnotes omitted].
Compare Giannino, above n 152, 270, who suggests that, to be legitimate, principles must
be developed based on wide consensus across the international community involving
developed and developing countries equally. It is, however, clear that any attempt to
produce rules at a government level will be compromised by such a process, which is likely
to produce weaker rules than developed or experienced competition law nations currently
prefer and stronger ones than might be appropriate for developing countries or countries
without a history of competition law policy.
But compare Sokol, above n 103, 102, who, while observing that soft law institutions allow
greater flexibility and adaptability in their recommendations and norms and that the
OECD plays an important role in the conceptualization of merger best practices, the lack of
broad implementation of these best practices suggests limitations to the OECD's ability to
get countries to adopt them. However, recommendations made by the OECD Council an
intergovernmental level, rather than those formulated within the Competition Committee and
lacking such endorsement, might engender greater respect by Governments.
See ibid 99, claiming that because of the repeat interaction of these agency heads,
agencies have an incentive not to be shamed in front of peer agencies for poor enforcement
decisions and outcomes.
See also Sokol, above n 103, 98.
See ibid 99.
Chapter9|Page487
institutional memory and capacity for in-depth analysis since members of the
CLPC are all at a similar level of economic development, agency capacity, and
experience, the typical OECD meeting has more potential for a substantial
conversation on antitrust issues than the typical meeting of the ICN 290
An OECD agreement also enjoys more democratic legitimacy, because it does

not shift power from elected officials to unelected interest groups.291 Related to
this issue, recommendations made by the OECD Council on core best practices
are more likely than agency-based recommendations to focus broadly on the total
welfare outcomes of the process, rather than of the interests of any given group.
However, unlike the ICN, which operates on a consensus basis, the OECD
Council requires agreement of all states, with each Member State having the
power to veto any proposed OECD Council Recommendation.292 This is likely to
make it more difficult to achieve agreement than a set of ICN recommendations
and, as a result, the OECD Recommendations may, in some respects, need to
be less ambitious than the ICN recommendations in order to generate
intergovernmental agreement.293 Nevertheless, the benefits of seeking such
agreement are likely to outweigh the cost of its attempt, and the 2005 OECD
Council Recommendation on Merger Review, which itself calls for reports from its
Competition Committee on further action which might be needed to in relation to
transnational merger review,294 provides some evidence that governments may
be willing to agree on core best practices in this field.
For these reasons, to increase the effectiveness of existing ICN
recommendations in relation to merger review, they should be supplemented by
290
291
292
293
294
Ibid 99.
See Ibid 76.
Convention on the Organisation for Economic Co-operation and Development, opened for
signature 14 December 1960), 888 UNTS 179, art 6, entered into force 30 September 1961:
Unless the Organisation otherwise agrees unanimously for special cases, decisions shall be
taken and recommendations shall be made by mutual agreement of all the members. See
also Sokol, above n 103, 99.
See, eg, Sokol, above n 103, 99.
2005, C(2005)34/final, recommendation II(3).
Chapter9|Page488
an OECD agreement targeting the most important aspects of merger procedure,

including notification thresholds, timing and confidentiality issues.
9.6.3 Content of non-binding international principles
The benefits of generating international best-practice soft law principles relating
to merger review are undeniable and have already been canvassed in chapter 7.
This section does not intend to traverse the same ground and re-examine the
merits of existing recommendations in any depth, but will aim to identify those
recommendations and principles which might, with appropriate modification, form
part of a more formal OECD Recommendation.
(a) Notification threshold agreement
Despite the fact that an agreement for a fixed threshold level would be both
unattainable and undesirable,295 a recommendation requiring thresholds to be set
at a level that reflected the potential for mergers to contravene the substantive
law and which incorporated a requirement for an appropriate jurisdictional nexus
requirement, could provide an appropriate benchmark against which Member
States should determine their thresholds. This is subject to the proviso that the
threshold levels are stipulated in objective terms, to enable parties to determine
notifiability without the necessity for onerous and subjective economic analysis.
Although there is, necessarily, a trade-off between the ability to more accurately
295
States have legitimate interest in pursuing a competitive climate that is best for their unique
economy. A jurisdiction with a smaller, more concentrated, economy, such as Australia,
might legitimately wish to set a lower threshold than larger, less concentrated economies,
such as those of the US or EU. Different substantive tests may also mean different
thresholds are appropriate. Consequently, the degree of concentration, or level of turnover,
of a merger that might attract the interest of a regulator is likely to vary, in some cases
substantially, from state to state. See generally ICN, 'Recommended Practices for Merger
Notification Procedures' (Merger Working Group 2002, amended 2003, 2004, 2005, 2006),
comment 4 to recommendation I(C) and Fox, Eleanor M and Merit E Janow, A Report of the
Second Annual Conference of the International Competition Network (International
Competition Network, 2003) 13.
Chapter9|Page489
target problematic transactions296 and increasing certainty and reducing cost in

determining notifiability, this trade-off should be resolved in favour of the latter.297
The recommendation should also require parties to regularly review threshold
levels and/or put in place an automatic mechanism for updating the thresholds to
ensure they keep pace with inflation and the changing economic climate.
(b)
Recommendation on timeframe for filing mergers
A consistent approach to time-frames for notification298 would allow parties to

prepare and simultaneously file multiple notifications and would assist authorities
in coordinating transnational merger investigations.299 Although the 2005 OECD
Council Recommendation300 requires that member countries should provide
merging parties with a reasonable degree of flexibility in determining when they
can notify a proposed merger,301 some divergence remains.302 There is no
objective need for the existence of these asynchronous triggering events.303 A
more prescriptive recommendation should therefore be made to permit
notification upon certification of a good faith intent to consummate the proposed
transaction304 and in cases where closing is prohibited during the initial review
296
297
298
299
300
301
302
303
304
See ICN, Setting Notification Thresholds for Merger Review (Merger Working Group,
Notification and Procedures Subgroup, Report to the ICN Annual Conference, Kyoto, Japan,
April 2008) 4.
See ibid 5.
Note that this is commonly referred to as a triggering event.
See, eg, Giannino, above n 152, 249. See also Wilson, who argues that no procedural
harmonization can be meaningful without agreement as to the trigger event: Wilson, above
n 2, 248.
2005, C(2005)34/final.
2005, C(2005)34/final, recommendation A(1)(2)(5)
See Appendix 1. Within the OECD, Finland, Greece, Hungary, Ireland and Portugal all
require notification within a relatively short period of a nominated event.
2002, amended 2003, 2004, 2005, 2006) recommendation III(A).
Chapter9|Page490
period, should prohibit Member States from imposing deadlines for pre-merger
notification.305
(c) Agreement on the scope of first stage information requests
In the absence of a common filing form, agreement should be reached on the
appropriate nature of first stage information requests, including agreement as to
scope, translation requirements and the appropriate use of notification fees.
(d) Agreement on timeframe for reviewing mergers
Current OECD Recommendations provide that merger reviews should be
conducted within a reasonable and determinable time frame.306 While the
setting of specific time limits for the second stage review may be unattainable in
the short term, due in part to the different administrative and legal frameworks in
which authorities operate, an agreement to provide for an initial merger screening
process to be conducted within a specific time frame may be possible.307 Most
OECD countries already provide for an initial stage 1 or phase 1 screening
process with time-frames ranging between 20-40 days308 and a recommendation
for a consistent time limit on first stage merger reviews of, for example, 30 days
305
306
307
308
2002, amended 2003, 2004, 2005, 2006) recommendation III(B)
2005, C(2005)34/final, recommendation A(1)(3). See also ICN, 'Recommended Practices
for Merger Notification Procedures' (Merger Working Group 2002, amended 2003, 2004,
2005, 2006) recommendation IV(A)(B) and (C).
Whish and Wood recommended convergence of time periods within which agencies would
complete their reviews of proposed transactions: Rowley, Wakil and Campbell, above n
201, 15. See also Rowley and Campbell, above n 4, 9.
See figure 8.13 above. Neither Poland nor Turkey provide for a formal or informal
breakdown of the merger review process into different stages. In Australia the formal review
process is conducted in one stage but parties have the option of utilising the ACCCs
informal process which is conducted in two stages. In Hungary the first stage investigation
must be completed in 60 days and in Hungary within 45 days. All other OECD jurisdictions
the initial phase of the investigation will normally be concluded within 20-40 days. The
position is different in Chile, where clearance may take between eight to twelve months, but
notification is voluntary. See further Appendix 1.
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or a month,309 would provide for greater certainty and planning opportunities for
merging parties, particularly those whose mergers raise no competition
concerns.310
Although presenting a greater challenge, it may also be possible to provide for a
maximum review period for second stage merger reviews, conditional upon
parties complying with reasonable information requests.311 Any agreed timeline
might be capable of extension with consent of the parties.312 The key difficulty in
achieving consensus on a second stage review lies in the different administrative
and judicial structures currently applicable to national merger review. For
example, in some countries authorities have both an investigative and judicial or
decision-making role, while in others authorities have only an investigatory role,
so that further court proceedings are necessary if an authority wishes to prevent
a merger from proceeding. As a result, some have suggested shorter time
frames should apply where authorities lack the power to independently prevent a
merger.313 However, as discussed in chapter 3, the reality is that, despite the
different structures, in most countries authorities will effectively determine
whether or not a merger will proceed, even where they lack the power necessary
to independently block a merger. Consequently, a common time frame may be
possible despite these structural differences.
309
310
311
312
313
Rowley suggests 14-21 days for a first stage: Rowley and Campbell, above n 4, 35. Fox, on
the other hand, suggests one month: Fox, Can We Control Merger Control?, above n 110,
87. See also Giannino, above n 152, 249 and Dodge, above n 185 and Competition Policy
Review Panel, Compete to Win (Final Report, Canada, June 2008) 56.
See eg, Fox, Can We Control Merger Control?, above n 110, 87.
Ibid. Fox claims that countries should agree to a maximum period within which a reviewing
agency can delay the transaction pending review eg one month for initial review and four
additional months if the merger raises serious questions (as under EU law). Penalties for
non-compliance with information and discovery requests should be significant enough to
give the merger partners the incentive to comply promptly.
Rowley suggests no more than three to six weeks for a second stage: Rowley and
Campbell, above n 4, 33 and 36.
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An agreement of this nature might provide an effective discipline on national

competition authorities when conducting their reviews.314
(e) Agreement for best practices on transparency in merger review
Transparency is vital to legitimacy and effectiveness of a multi-jurisdictional
review system.315 It is not, therefore, surprising that transparency, as a general
concept, has been a prominent feature of many competition law treaties
recommendations and should feature in any future OECD recommendation. In
particular, it should include transparency of thresholds and the decision making
process, including development of supportive guidelines to assist parties in
assessing both notifiability and legality of their merger. A transnational
recommendation should also require the provision of early notice to parties
whose mergers are not cleared at the initial review stage about why such early
clearance was denied.316 In this respect the existing OECD Council
Recommendation on Merger Review provides a useful template.317
Interested third parties should also be provided with an opportunity to express
their views about the likely impact of the proposed merger,318 particularly where
they have no independent standing to pursue the matter within the national
judicial system.
A transparency recommendation should also require agencies to provide reasons
for denying a merger or for imposing merger remedies, and also for clearing
314
315
316
317
318
See, eg, ICN, Report on the Costs and Burdens, above n 13, 15, citing Evidence to
International Competition Policy Advisory Committee, Washington DC, 3 November 1998
(Barry Hawk), transcript at 47-49, who recommended the introduction of fixed deadlines for
review.
Rowley and Campbell, above n 4, 29. See further Giannino, above n 152, 246.
See, eg, ICN, 'Recommended Practices for Merger Notification Procedures' (Merger
Working Group 2002, amended 2003, 2004, 2005, 2006), recommendation VI(C).
2005, C(2005)34/final, recommendation A(2), (3) and (4). See also ICN, 'Recommended
Practices for Merger Notification Procedures' (Merger Working Group 2002, amended 2003,
2004, 2005, 2006), recommendation VI(C).
See Giannino, above n 152, 255.
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mergers where the merger is one of significant public interest or raises new
competition issues. Provision of such reasons would enable parties and other
agencies to obtain a better understanding of the scope of national laws and
procedures and, although it would increase the cost for some agencies that
currently fail to provide such reasons, the transparency benefits should outweigh
these costs.319
(f) Agreement on the facilitation of cooperation between Member States
where notified multi-jurisdictional mergers raise competition concerns
The increasing volume of cross-border mergers necessitates effective
cooperation.320 Effective cooperation has the clear potential to enhance welfare
relative to a situation in which each nation enforces its laws by reference only to
its own self-interest.321 This sort of coordinated inter-agency discourse is also
likely to reduce the risk that any one jurisdiction would impede a benign or
efficiency-enhancing transaction322 and should further reduce the likelihood of
conflicting decisions by moving enforcement agencies towards more common
factual bases and in-depth discussions of relevant issues throughout their
investigations.323
To a degree, significant levels of cooperation in the transnational merger review
process already occurs, and inter-agency discussion about transnational mergers
under review is common.324 Developing further, more specific disciplines to
guide the review of mergers with significant transnational or spillover effects
would assist in facilitating timely dialogue between reviewing authorities and
319
320
321
322
323
324
See, eg, Rowley and Campbell, above n 4. The US FTC and DOJ(AD), for example, do not
provide such reasons. In this respect, Assistant Attorney General of the DOJ(AD), Christine
Varney, has recently observed that this is an area in which the DOJ can improve: Varney,
Coordinated Remedies, above n 9, 6.
See, eg, Davey and Barker, above n 230, 7.
Taylor, above n 165, 69.
Ibid 23. Compare Jenny, above n 66, 99, who disputes the need for any agreement on
cooperation, arguing that such cooperation generally occurs absent such agreement.
See, eg, Davey and Barker, above n 230, 24.
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would, as a result, provide a valuable means of reducing both the parties and the
authorities burdens.325
To facilitate this cooperation, agreement on principles for the protection of
confidential or privileged information acquired as part of the review process would
also be required. Confidentiality can be one of the greatest concerns for
parties326 and one of the greatest handicaps for cooperation. Experience has
demonstrated that cooperation is most effective where merging parties provide
waivers to permit the sharing of their confidential information between reviewing
authorities and an agreement should encourage parties to promote the benefits
of provision of such a waiver.327
(h) Merger Analysis
Member parties should agree that the purpose of merger review is to prevent and
remedy those mergers likely to significantly harm competition328 and that any
effects analysis should be directed toward assessing whether the proposed
merger would create or enhance the firms ability to exercise either unilateral or
coordinated market power.329 This approach is consistent with current ICN
recommendations.
Countries should further agree not to assert national champion policy to exempt
or justify mergers that cause significant harm to competition in external markets,
at least where one other nation has concluded that the merger is anti-competitive
325
326
327
328
329
See, eg, ICPAC, 'International Competition Policy Advisory Committee Meeting, Minutes'
(Department of Justice, 1999) 4.
See, eg, Jenny, above n 66, 98, who argues that the business community has shown some
coolness towards exchanges of information between competition authorities .
OECD, 'The Need for Anti-cartel Enforcement and Merger Control, Facilitated by
International Co-operation' (2004) 6 OECD Journal of Competition Law and Policy 68, 74.
2009) recommendation I(A).
2009) recommendation VI(A)
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and seeks its prohibition.330 When mergers with significant external effects are
justified on non-competition rounds (eg environmental concerns or national
security), the competition analysis should be separately provided and the noncompetition override should be clearly stated.331 This would not necessarily
involve a separate agency, as proposed by the DIAC, but for transparency
purposes it should involve an analysis that is separate from the primary
competition law analysis.
(g) Remedies
Member States should agree that, when imposing merger remedies, authorities
should target the resolution of national competition concerns and endeavour to
avoid generating negative externalities in other Member States, including the
avoidance of conflicting remedies.332
Where practicable, Member States should liaise with other interested national
authorities to develop consistent remedies.333 Any attempt at a more
comprehensive obligation in this respect might prove difficult in practice as a
330
331
332
333

Ibid.
Compare Fox, who goes a step further arguing that agreement should also be reached on a
rule of proportionality, stating that a less-significantly-affected nation may not order relief
broader than necessary to cure the specific harm inflicted on its territory : Fox, Can We
Control Merger Control?, above n 110, 89. However, it is suggested that this principle
should apply to all stages even those most affected should endeavour not to order relief
that goes beyond that necessary to cure the specific territorial harm anticipated.
See, eg, Varney, Coordinated Remedies, above n 9, 3, noting that although it is difficult to
devise jurisdictionally confined remedies for global markets, agencies must be attuned to
the effects that [their] actions might have on other jurisdictions and, where extraterritorial
effects are unavaoidable, they should be minimised and avoided. Varney also notes that
agencies must be attentive to what [their] international counterparts have already done
[and] to what [they] may yet do in the future.
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result of the time-sensitive nature of merger-review.334 This recommendation is

broadly consistent with existing OECD Recommendation on Merger Review.335
9.6.4 Analysis and conclusion
Continuing soft-law recommendations, through both the OECD and the ICN, is
essential to maintaining a dynamic approach to the growing challenges
presented by transnational merger regulation in an increasingly integrated global
economy.
The recommendations proposed for OECD agreement are not intended to
constitute an exhaustive list of soft-law recommendations designed to promote
greater understanding, harmonisation and cooperation in relation to transnational
merger regulation. Other important principles, such as those relating to nondiscrimination, should continue to guide OECD Member States and others when
designing and implementing their merger laws, but it is unlikely that any further
agreement on these general principles will translate into any significant costsavings for parties or authorities. Consequently, the maintenance and
development of these principles within the ICN framework is likely to produce a
similar level of benefit to parties, authorities and the public.
The ICN also produces undeniable benefits for enhancing cooperation and
sharing new ideas and best practice between agencies which should have a flowon benefit for parties and the public.336 The ICNs exclusive focus on competition
law matters and its less formal nature, provides it with more flexibility than the
OECD to quickly adapt to changes in the market or developments in economic
and legal theory regarding merger regulation.337 This continuing progress toward
334
335
336
337
See, eg, American Antitrust Institute, Centralizing Merger Controls (2009), Summary of
Session at 10th Annual Conference, 25 June 2009.
2005, C(2005)34/final, recommendation B(1).
See, eg, Fox, GE/Honeywell, above n 101, 331.
See, eg, Sokol, above n 103, 108.
Chapter9|Page497
achieving consensus and, by extension, convergence, toward core principles

relating to merger review has the potential to lead to generate significant private
and social welfare gains338 and the ICN should continue to play this important
role.
However, while the ICN initially borrowed much from earlier OECD
recommendations when first formulating its principles and recommendations, it
now has the potential to reverse this role and provide a valuable breeding ground
for ideas and recommendations which might be subsequently adopted by the
OECD Council, thereby providing greater and perhaps more targeted incentives
for OECD member and observer states.
9.7 Continued bilateral cooperation and natural convergence

It is clear that while bilateral cooperation alone cannot produce optimal results for
mergers whose geographic scope stretches beyond the relevant member states,
there is no doubt that their existence can help to diffuse the potential for
clashes339 between their members and assist in cooperative endeavours,
including providing models for broader multi-national cooperative endeavours.
The importance of this is most clearly demonstrated by the cooperation
agreements between the US and EU, who continue to review the bulk of
competitively significant transnational mergers.
In relation to multi-jurisdictional merger review, however, the agreements provide
very limited scope for alleviating the initial costs associated with determining
338
339
Campbell and Rowley, above n 119, 268

See Fox, Evidence to Antitrust Modernization Commission, above n 12, 17 claiming that the
best way of diffusing potential clashes is not to decree comity or convergence but to solidify
norms of talking, listening, reasoning and engaging. When authorities appear to be reaching
different evaluations [they] should explore and then pinpoint for one another exactly
where their differences lie, identifying inferences, presumptions, premises, and critical
evidence. By that means, they may be able to resolve differences. If not, they should be
able to understand the basis of divergence.
Chapter9|Page498
notifiability and complying with notification requirements. Alleviation or

minimisation of those burdens requires broader agreement.
9.8 Analysis and Conclusions

The current costs of multi-jurisdictional merger review are significant. The
inconsistencies and overlap involved in multiple notifications and reviews
suggests that there are clear benefits to be achieved through greater
harmonization of laws and procedures, combined with international cooperative
efforts.340 However, there is no simple solution to resolving current review
inefficiencies for transnational mergers. 341
A comprehensive or even limited international code for merger review, while
intuitively appealing, would be impractical given the current divergence in law and
institutions and predilection of states to give preference to national welfare
interests affected by a proposed merger over global welfare interests. More
importantly, however, in the case of transnational merger review, a supranational
approach, particularly if enforced by a central regulator, is likely to prove suboptimal in achieving the global welfare interest sought. 342 This is because a
central law or regulator would judge a merger only by reference to total global
welfare and would not facilitate remedies targeted to address localised harm,
even where such remedies could be imposed without the countervailing impact of
reducing the benefits predicted in other localities.
The proposals to establish a procedural clearing house are also flawed. In most
cases they fail to adequately address issues surrounding jurisdictional allocation,
notification and dissemination of transnational merger notifications, language and
currency requirements and the necessity of country-specific information in some
340
341
342
See generally Eleanor Fox, 'Linked-In: Antitrust and the Virtues of a Virtual Network' (2009)
43 International Lawyer 151, 154.
See, eg, Geradin, The Perils of Antitrust Proliferation, above n 19, 210-211.
n 69, 47.
Chapter9|Page499
cases. Any attempts to adequately address these issues would appear to

replace existing cost burdens with new cost burdens and thereby fail to secure
intended benefits. Consequently, even if agreement could be reached for a
clearing house system, which would appear an unlikely prospect, such an
approach cannot be considered more optimal than the existing approach to
transnational merger regulation, with one exception. It is possible that provision
for a facilitative lead jurisdiction where a merger proceeds to a second stage
investigation could alleviate duplication of information provision and gathering
and result in genuine cost benefits by reference to the current system.
The proposal for a common filing form is the one most likely to produce
significant cost savings for parties, by allowing them to prepare a single common
core set of information, supplemented by limited country specific annexes, which
would reduce the cost and uncertainty of compliance. Most significantly, this
approach would be the one most targeted to the alleviation or reduction of costs
incurred by parties to mergers raising no competition concerns. There is also
genuine possibility that OECD countries might agree to such a system in the
short to medium term.
A common form approach to the notification of transnational mergers would be
most effective if coupled with OECD Council Recommendations on core aspects
of merger review, which might help to reduce compliance and enforcement costs
even where detached from enforcement mechanism.343 This, in turn, can be
driven and supported by the continued development and expansion of principles
and guidelines emerging from the ICN.
It is, therefore, suggested that a multi-layered approach, adopted by similarly
developed states within the OECD and targeted specifically to transnational
merger activity, would be both most likely to advance global modern consumer
welfare and would constitute an attainable goal in the short to medium term.
343
Braithwaite and Drahos , above n 21, 10.
Chapter9|Page500
Chapter 10 Conclusion and Proposals

10.1 Conclusions
For decades, the increasing costs generated by the application of concurrent
national jurisdiction over competition laws has sparked debate about the possible
benefits to be derived from a more coordinated or centralised system of rules and
enforcement in this field.
In recent years the costs and burdens associated with the review of transnational
mergers has increasingly become the focus of attention. The estimated value of
annual worldwide merger activity is now calculated in the trillions of dollars1 and,
as firms seek to establish scale in global markets, the resulting mergers are
increasingly transnational in their impact and in the regulatory responses they
attract. They also have the potential to significantly and concurrently impact on
the economies of several states. In this respect, the special nature of ex ante
merger review, compared with the ex post review and prosecution of other forms
of conduct to which national competition law concerns itself, has been
increasingly recognised.
10.1.1 The goals of transnational merger review
The purpose of this research was to identify the current costs and burdens
associated with multi-jurisdictional merger regulation with a view to determining
the potential for establishing a more efficient international regulatory regime and,
where appropriate, making recommendations in that respect. Any benchmark of
an existing regulatory model with possible alternative approaches first
necessitates a clear understanding of what is sought to be achieved by
regulation. It was to this question that Part I of the thesis was principally directed
and the most appropriate goal for transnational merger regulation was identified
See page 1.
Chapter10|Page501
as global modern consumer welfare. Modern consumer welfare in this context

was defined to include not only efficiencies that lead to a reduction in price for
consumers, but also those that result in broader consumer benefits, most
importantly, increased choice and quality. However, this definition does not
extend to other goals, such as promoting national champions or the protection of
small business. If these goals are to be pursued, they should be addressed
through separate laws and regulations, rather than as part of a competition policy
which should focus exclusively on the maintenance of competitive markets and
should not compromise this focus by permitting market distortions for the benefit
of any particular interest group.
Although national authorities will inevitably defer to national over global welfare
interests in cases of conflict, the goal of the cumulative regulatory responses to
transnational mergers should nevertheless remain global.2 It is, for example,
clear that concurrent national operation of laws, guided by principles designed to
reduce duplication of compliance obligations (such as filing requirements),
without subverting national sovereignty, will more closely approach a global
optimal standard than would concurrent national operation of laws absent such
guidance. Supplementing national regimes with treaties or recommendations
promoting comity and cooperation in the review of transnational mergers, which
increases national understanding of the broader global consequences of those
mergers, will likewise help to advance this global objective, even where domestic
goals remain nationally confined.
In relation to the procedural regulation of mergers, to be considered optimal,
merger review procedures must be capable of identifying and preventing most
anti-competitive mergers prior to consummation at the least possible cost to
parties and authorities and, in particular, it should not unduly burden those
See, eg, Chris Noonan, The Emerging Principles of International Competition Law (2008) 96
noting that the implications of the global consumer welfare standard ... will need to be
worked out over time.
Chapter10|Page502
parties whose mergers are unlikely to cause competitive harm. To be effective,

any PMN system, whether domestic or transnational, must be clear and capable
of operating within a commercially realistic and predictable timeframe and must
be capable of implementation, both practically and politically.
10.1.2 National approaches to transnational merger review
With the goals of transnational merger review in mind, Part II examined existing
national approaches to substantive, procedural and extraterritorial application of
merger laws to transnational mergers, with a view to assessing their success in
achieving these goals domestically. The current extent of convergence in various
aspects of national merger regulation, which has implications for the future
direction of transnational merger review, was also examined. Several conclusions
were drawn.
The first set of conclusions related to the substantive assessment of mergers.
The two key tests applied among OECD jurisdictions for prescribing the legality of
mergers are the competition test and the dominance test. The former prohibits
those mergers that will substantially lessen, or significantly impede, competition
in a market. The latter prohibits mergers only when they create or strengthen a
position of dominance in a market and, while in most cases more restrictive than
a competition test, it is frequently applied in a similar way by virtue of the
recognition of the concept of collective dominance. The competition test is the
one most closely aligned with the preferred objectives of competition law and
there has been significant convergence toward a competition test among OECD
states in the past decade. Most significantly, the EU replaced its former
dominance test for mergers with a competition test, prompting a number of its
member states to alter their laws to maintain consistency with the European
standard.
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Whether applying a competition or dominance test, it is important to apply

rigorous economic analysis to the particular facts in questions and there has
been increased recognition, particularly from the EU,3 of the value of economic
analysis in merger assessments. In particular, regard should be paid to unilateral
and cooperative theories of harm and markets should be defined accurately to
reflect their true scope and not artificially restricted within national boundaries.
The second set of conclusions relating to national laws were drawn from an
assessment of the procedural approach taken to merger review. The unique
scope for, and benefits of, ex ante review of proposed merger activity were
identified. In particular, it was accepted that there are clear and important
benefits in preventing anti-competitive mergers prior to consummation whenever
possible, resulting from the difficulties inherent in dismantling an already
consummated merger through divestiture orders. The benefits to parties of
certainty generated through pre-merger approval (or at least the absence of premerger challenge), were also identified. It was concluded that these benefits
outweighed the detriment associated with PMN, in the form of cost and delay
incurred by all parties to a notified merger. However, the potential for PMN
regimes to impose significant costs on parties to both anti-competitive and procompetitive mergers, necessitates ongoing review to ensure that the balance,
between the need to identify and prevent anti-competitive mergers in their
incipiency and the need to ensure that pro-competitive mergers are not deterred
and do not face undue cost or delay, is appropriately struck.
In establishing a PMN regime, the choice of a mandatory or voluntary PMN
system may depend on prevailing market conditions (including size and
concentration) in the asserting jurisdiction. Particularly in the case of smaller
This followed predominantly from the controversy surrounding the decisions in

Boeing/McDonnell Douglas (IV/M877) [1997] OJ L 336/16 and General Electric/Honeywell
(COMP/M2220) [2004] OJ L48/I. See generally Mario Monti, 'The Future for Competition
Policy in the European Union' (Speech delivered at the Merchant Taylors Hall, London, 9
July 2001) and Cento Veljanovski, 'EC Merger Policy after GE/Honeywell and Airtours'
(2004) 49.
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economies and those with a history of vigorous competition law enforcement,

voluntary systems appear to be capable of achieving the desired objectives, while
imposing less risks and cost burdens on parties and regulators. However, in
larger economies, the costs of monitoring markets for compliance might be such
that a mandatory PMN system can be justified, despite the additional costs it
imposes on parties to competitively benign mergers. Where a mandatory system
is in place, its effectiveness may be enhanced by establishing a parallel voluntary
system for those mergers which, while raising potential competitive issues in
small markets, fail to meet the thresholds for mandatory review. This hybrid
approach might also facilitate an increase in notification thresholds for the
mandatory system, thereby eliminating the notification burden for many mergers
which, while relatively large, do not have any significant competitive impact.
Within each country, the approach taken to reviewing transnational mergers
should, apart from any appropriate cooperate efforts between agencies, be the
same as that adopted for mergers affecting only national markets.
The final set of conclusions drawn from the assessment of existing national
regimes, related to the scope of jurisdictional assertions over transnational
mergers. For many years, the US has applied its laws to mergers which, while
involving companies registered or operating off-shore, nevertheless produced
significant economic effects within the US. For decades this approach to
extraterritorial jurisdiction operated as a source of conflict between countries and
prompted various retaliatory measures. More recently, however, an effectsbased approach to extraterritorial jurisdictional assertions has gained legitimacy
among OECD countries and is now actively applied by most member countries
and the EU as the primary source of extraterritorial jurisdiction in transnational
merger cases.
In addition to being widely accepted, the effects-based approach to extraterritorial
jurisdiction in merger cases is appropriate. Although the assertion of such
jurisdiction can and does result in multiple reviews of transnational mergers, the
absence of effects-based jurisdiction can prevent review by the country most
affected by the merger and, in some cases, enable parties to escape review
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altogether based only on their physical location. Consequently, while an effectsbased approach to jurisdiction has the potential to result in over-regulation, this is
to be preferred to the likely under-regulation that would result absent such
jurisdiction.
Predicted effect, while appropriate for assessment under substantive law is not,
however, an appropriate trigger for pre-merger notification. Although artificial, an
objective turnover-based trigger, incorporating a local turnover requirement, is to
be preferred over a more subjective effects-based connection (such as market
share and concentration levels), because it increases business certainty and
reduces compliance costs for initial notification.
10.1.3 Existing levels of cooperation
Following the examination of existing national approaches to merger regulation,
Part III considered the current cooperative and multinational approaches taken to
merger review. Chapter 6 concluded that comity, although useful in reducing
some jurisdictional tensions and in encouraging contact between agencies, is
insufficient in itself to address the surplus cost of over-regulation resulting from
concurrent application of national laws to transnational mergers.
Chapter 7 then assessed the effectiveness of broader cooperation agreements
and recommendations on transnational merger review. It concluded that bilateral
agreements and cooperation between some OECD countries or country
groupings, in particular between the US and EU, have significantly improved
cooperation and understanding between member countries, through information
sharing and coordination of timetables, and have facilitated soft convergence of
law and analysis in some cases. However, these agreements can also add a
layer of complexity to the review process, particularly where more than two
jurisdictions are involved, with the result that several different agreements may
govern the coordination of a single transaction. In addition, while in some cases
reducing duplication for parties in the provision of information during the second
phase of merger investigations, these agreements do little or nothing to reduce
the cost of initial notification.
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Recommendations made by the OECD have encouraged greater bilateral

cooperation and have helped to facilitate consistency of bilateral agreements
between OECD states. They have also helped to promote best practices in
merger procedures and increased understanding about issues unique to
transnational merger review. This work has also informed the more recent work
of the ICN in this area. However, as with bilateral agreements, their impact has
occurred predominantly toward the latter stages of merger investigations.
The ICN has enjoyed more recent success in promoting cooperation and
convergence in competition law and policy and merger law specifically. This has
led to increased substantive and procedural convergence and has greatly
improved transparency in the merger review process. The nature of the ICN as
an agency based, issues-driven, virtual body is both a strength and a weakness.
Some of its more recent recommendations, in particular, have been made in
broad language and lack detail and clarity, making uniform implementation less
likely or less effective. The ability for the ICN to have a long term substantive
impact on reducing the cost burden associated of transnational merger review
also remains unclear.
10.1.4 The costs of transnational merger review
Having identified and examined both the national approaches to transnational
merger review and the supranational web of agreements designed to coordinate
their international review, Part IV identified the range of costs associated with the
current regulation of transnational mergers. These costs are significant, both for
parties, reviewing agencies and the consumer public. In particular, the cost of
transnational merger regulation on transactions presenting little, if any,
competitive concerns are currently unreasonably and unnecessarily high. Even
where multi-jurisdictional review is appropriate because the size or nature of the
merger is such that there is the possibility it could contravene the substantive law
of multiple states, the differing, and often excessively onerous, notification
requirements impose significant burdens on the parties and this inevitably has
flow-on effects for the broader consumer public.
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10.1.5 Possible future directions for transnational merger review

With a view to reducing the existing cost burdens and better achieving the goal of
maximising global modern consumer welfare, the previous chapter identified and
examined various options for greater international cooperation and convergence
in relation to transnational merger review. It concluded that, although there is no
simple or single solution for reducing current costs associated with the review of
transnational merger activity, there is scope for reform which might better
approach an optimal level of regulation for transnational merger review, while not
ignoring the political realities that would influence the construction of any future
international competition law agreement.
Not all problems or inefficiencies associated with international merger regulation
can be overcome so long as a system of sovereign states remains. However,
sensible and targeted reform is possible to limit these inefficiencies. Reform
should be first aimed at screening out the white noise at minimum possible cost.
In this respect, merger regulation should continue to evolve to more efficiently
and economically manage those mergers which are competitively benign and
therefore more likely to advance rather than reduce global modern consumer
welfare.
Attention should also be paid to avoiding or limiting the duplication of information
requests for mergers that proceed to a second stage review. While to some
extent endeavours in this respect are already taking place, particularly when it
involves reviews by countries having strong bilateral ties, more can and should
be done.
Finally, although preventing divergent outcomes or harmonising law, while often
desirable, is not the primary source of cost associated with multi-jurisdictional
merger review and should not be the primary reform goal, a strengthening of
cooperative efforts and comity considerations might facilitate both soft
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convergence in key areas of law and procedure and encourage a greater

awareness of the negative externalities that might be generated by national
remedies.4 In addition, some differences in law and process may be
advantageous. Flexibility in the development and application of law and
procedures enables them to be tailored to most accurately reflect different
national economic, social and legal conditions and philosophies. Perhaps more
importantly, the recognition of differences can help nations to compare the
effectiveness of different approaches and promote national efforts to improve the
legal and economic analysis and procedural efficiencies, which might in turn help
to drive a better global standard.
With these considerations in mind, the most optimal approach to transnational
merger regulation, that retains politically viability, involves a combination of
endeavours, most important among them the adoption of a common filing form.
Notably, any attempt at a supranational law or enforcement body is unlikely to be
viable politically and, even if it was, it would not prove optimal in advancing a
global modern consumer welfare objective.
10.2 Proposal for the future direction of transnational merger

regulation
A combination of endeavours is required if meaningful reform is to be achieved. It
is recommended that in addition to continuing the work of the ICN, the OECD and
other organisations involved in studying and developing best practices for merger
review and procedure, the OECD Council should adopt a new targeted
recommendation on the review of transnational mergers. A detailed draft OECD
Council Recommendation incorporating these elements is set out at 10.3, below.
Briefly, it should incorporate the following elements:
Sheridan Scott, The Design of Effective Remedies in Cross-Border Mergers in Hawk, Barry
(ed), International Antitrust Law and Policy: Proceedings of the 35th Annual Fordham
Competition Law Institute Conference on International Antitrust Law & Policy (2008) 183.
Chapter10|Page509
A voluntary common notification form for transnational mergers,

incorporating a confidentiality waiver
A recommendation aimed at reducing translation requirements
A recommendation on notification thresholds
A recommendation specifying the time at which notification may be made
A recommendation that fees be waived for initial notification
A recommendation setting time limits for the review of transnational

mergers
A recommendation on transparency in the merger review process
A recommendation on substantive approach and theories of harm
A recommendation on the coordination of agency review of mergers

raising initial competition concerns
A common notification form for initial filing, while ambitious, presents a sensible,
meaningful and attainable response to the inefficiencies currently experienced5
by parties proposing to merge.6 At least in the initial phase of a merger
investigation, the economic issues that arise are substantially similar in all
jurisdictions,7 despite differences in substantive laws. It is clear, however, that
jurisdiction-specific information will often be required to assess national market
impact. To facilitate this, countries should be permitted to attach a countryspecific annex to the common notification form.8 In order to retain the benefit of
information rationalisation and consistency achieved through a common form,
country specific annexes should seek to illicit only minimal, objective, countryspecific information.
See generally OECD, Report on Notification of Transnational Mergers' (Committee on

Competition Law and Policy, DAFFE/CLP(99)2/FINAL, Feb, 1999) 2, Lise Davey and John K
Barker, 'Merger Review Benchmarking Report' (Competition Bureau (Canada), 2001) 122
and discussion in chapter 8.
See J William Rowley and A Neil Campbell, 'Multi-Jurisdictional Merger Review - Is it Time
for a Common Form Filing Treaty?' in Policy Directions for Global Merger Review, a Special
Report by the Global Forum for Competition and Trade Policy (1999) 9.
PriceWaterhouseCoopers, 'A Tax on Mergers? Surveying the Time and Costs to Business of
Multi-jurisdictional Merger Reviews' (June 2003) 26.
OECD, Report on Notification of Transnational Mergers, above n 5, 2. See also Richard
Whish and Diane Wood, Merger Cases in the Real World A Study of Merger Control
Procedures (OECD, 1994).
Chapter10|Page510
Competition authorities within OECD countries have already, by virtue of their

ICN membership, accepted that information requirements for initial notification
should be limited to that which is necessary to determine whether the transaction
raises competitive issues meriting further investigation and that they should elicit
the minimum amount of information necessary to initiate the merger review
process.9 The existing OECD Council recommendation on merger review also
provides that parties should avoid imposing unnecessary costs and burdens,
including by setting reasonable information requirements consistent with
effective merger review.10 A common form for the initial vetting process would
be consistent with these objectives and, at the same time, ensure that, in most
cases, mergers unlikely to raise any serious competition concerns would be
relieved from the burden of divergent and excessive information requirements.
It is also important that burdens of translation be limited in the initial stages of an
investigation so that, while the cost of translating a common core of information
into multiple language requirements (where multiple jurisdictions are required to
be notified) is a legitimate cost of doing business,11 it would be possible and
appropriate to allow the majority of supporting documents to be annexed in the
language of the business involved, provided summaries of each document are
translated into the preferred language.12
The next essential component of any reform endeavour is a binding threshold
agreement. While countries have a legitimate interest in pursuing a competitive
climate that is best for their unique economy, which might require different
10
11
12
2002, amended 2003, 2004, 2005, 2006), recommendation V(A), comment 1 to
recommendation V(A).
2005, C(2005)34/final, recommendation I(A)(1)(2).
Currently, in OECD jurisdictions alone, there are 19 different languages prescribed.
See also ICPAC, 'International Competition Policy Advisory Committee to the Attorney
United States, 2000) 16. This would be consistent with ICN recommendations and already
occurs in a number of jurisdictions. See generally Appendix A.
Chapter10|Page511
threshold levels for notification, an agreement requiring thresholds to be set at a

level that reflects the potential for mergers to contravene the substantive law
could provide an appropriate benchmark against which parties determine their
thresholds. Were this to form part of a binding agreement between states, then,
despite the fact it does not prescribe set threshold levels, governments could be
held more accountable for the threshold tests that they adopt and could be
required to regularly review threshold levels and/or put in place an automatic
mechanism for updating the thresholds to ensure they keep pace with inflation
and the changing economic climate.
Countries should also agree to eliminate notification fees in the first stage of
review for transnational mergers. Fees cannot be justified for the high volume of
benign and pro-competitive mergers that are currently subjected to initial filing
fees in multiple jurisdictions. The recommendation should also make clear that,
where a detailed investigation is undertaken, any fees imposed must be set at a
level designed to reflect the cost of the merger review process and should not be
imposed for purposes of cross-subsidising other activity. Agreement on fees
would have significant implications for some countries, most notably the US. As
a consequence, agreement on a recommendation of this nature may prove
unattainable in the short term. If this proves to be the case, the other
recommendations, particularly that relating to a common notification form, could
be implemented without the aid of a fee provision and still significantly impact on
the current regulatory cost.
Agreement should also be reached on timeframes for the filing of mergers,
permitting parties to notify at any point after arriving at a good faith intention to
merge. In this respect, the ICNs existing recommendations are commendable,
but they have not yet been adopted by all OECD nations13 and would benefit from
formal inclusion in a Council recommendation.
13
See Appendix A for jurisdictions which do not comply.
Chapter10|Page512
In relation to the review of mergers by authorities, the ICNs recommendations

relating to timeframes, when combined with the associated Working Group
comments, form an appropriate basis for a best practices agreement.14 While a
formal agreement could (and should) be reached on a review period for the initial
stages of investigation, the setting of specific time limits for review of mergers
raising competition concerns might be more difficult in the short term, primarily as
a result of the operation of clock-stopping triggers in many jurisdictions.
However, agreement on an aspirational and perhaps conditional common
maximum time frame for in depth merger reviews,15 might have the benefit of
encouraging convergence toward that goal.
Transparency is the next essential ingredient for effective reform. In this respect,
both the ICN and OECDs recommendations make appropriate provision for
transparency in merger processes.
Increasing recognition of a competition standard for merger review and adoption
of unilateral and coordinated effects as the predominant theories of harm against
which merger laws are designed to protect, might enable formal agreement to be
reached on this issue and attempts should be made to incorporate agreement on
this issue in any formal OECD Recommendation.
Finally, the increasing number of transnational mergers necessitates effective
cooperation between reviewing countries.16 To a degree, this already occurs.
Significant discussion between many countries in relation to concerns over
potentially anti-competitive transnational mergers is common.17 Less frequently,
14
15
16
17
Current OECD Recommendations provide only that mergers be reviewed within a

reasonable and determinable time frame.
For example, comments to ICN recommendations refer to setting review periods capable of
completion within a reasonable time frame, to allow for party-generated delays in the review
process: ICN, 'Recommended Practices for Merger Notification Procedures' (Merger
Working Group 2002, amended 2003, 2004, 2005, 2006) comment 2 to recommendation
IV(C) and (D).
See Davey and Barker, above n 5, 7.
See ibid 24.
Chapter10|Page513
work-sharing may occur on a case-by-case basis.18 A focused recommendation

on how to deal with multi-jurisdictional merger review, incorporating confidentiality
procedures, would assist in facilitating timely dialogue between reviewing
authorities.
This proposal for the future direction of transnational merger regulation has the
potential to be achieved in the short term and could significantly alleviate the cost
of multi-jurisdictional merger review for parties and regulators, and other parties,
particularly consumers to whom the cost is usually transferred. Some of the
recommendations within the proposal have been achieved, to varying levels, as a
result of existing agreements and recommendations. However, the first
recommendation for a common filing form has yet to be achieved and is the most
significant in terms of cost saving potential. In addition, the proposal extends
beyond existing reform efforts in the following ways:
a) It provides greater specificity for some recommendations, including
a. Providing for specific time frames for the filing of mergers; and
b. Providing for specific time frames for the review of mergers.
b) It provides for the establishment of a facilitative lead jurisdiction to
coordinate second-stage review processes.
Although ambitious, this proposal for the future direction of transnational merger
regulation remains sufficiently restrained so as to make it politically feasible for
OECD countries. Importantly, unlike many other proposals that have been made
for a broader international competition agreement, this proposal is more
appropriately targeted to the special circumstances governing the cost-benefit
analysis applicable to transnational merger regulation.
18
See ICPAC Final Report, above n 12, 7-8.
Chapter10|Page514
10.3 Draft OECD Recommendation for Merger Notification

and Review 19
The Council,
Having regard to Article 5b of the Convention on the Organisation for
Economic Co-operation and Development of 14th December 1960;20
Having regard to the Competition Committees work relating to merger
review process, including the Report on Notification of Transnational Mergers;21
Recognising that the continued growth in internationalisation of business
activities, and the increasing number of jurisdictions which have adopted merger
laws, correspondingly increase the number of mergers that are subject to review
under merger laws in more than one jurisdiction;22
Recognising that reviews of transnational mergers can impose substantial
cost on competition authorities and merging parties, and that it is important to
address these costs without limiting the effectiveness of national merger laws;23
Recognising that co-operation and co-ordination among competition
authorities with respect to mergers of common concern can enhance the
19
20
21
22
23
Some terminolodgy, particularly that contained in the preliminary comments, draws from the
2005, C(2005)34/final.
Convention on the Organisation for Economic Co-operation and Development, opened for
signature 14 December 1960), 888 UNTS 179, art 5, entered into force 30 September
1961provides that in order to achieve its aims, the Organisatoin may: (b) make
recommendations to Members.
Adapted from OECD Council, Recommendation of the Council Concerning Merger Review,
23 March 2005, C(2005)34/final.
Taken directly from OECD Council, Recommendation of the Council Concerning Merger
Review, 23 March 2005, C(2005)34/final, para 4
Chapter10|Page515
efficiency and effectiveness of the review process, help achieve consistent, or at

least non-conflicting, outcomes, and reduce transaction costs; 24
Recognising the benefits that can result from the ability of competition
authorities to share confidential information with foreign competition authorities
with respect to mergers of common concern, and considering that most
competition authorities may not be authorised by law or international agreement
to share confidential information with foreign competition authorities in merger
review proceedings, and therefore may do so only if the parties voluntarily waive
their confidentiality rights; 25
Recognising that confidential information must be protected against
improper disclosure or use if competition authorities share such information;26
Recognising the important work by other entities in the area of merger
notification and procedures, in particular that of the International Competition
Network;27
Recognising that Member countries are sovereign with respect to the
application of their own laws to mergers;28
I. RECOMMENDS as follows to Governments of Member countries
Article 1 Application
This recommendation applies to the competition review by Member countries of
24
25
26
27
28
Chapter10|Page516
Article 2 Definitions
(a) A merger occurs when one or more persons or corporations acquire,
directly or indirectly, shares or assets in another corporation.
(b) A transnational merger is a merger which requires pre-merger notification
in more than one Member country.
(c) A national reviewing authority is a national competition agency of a
Member state or the European Commission.
(d) National law includes European Union treaties and regulations.
Article 3 Notification thresholds and jurisdictional nexus

(a) Member countries imposing mandatory pre-merger notification
requirements should set pre-merger notification thresholds designed to
capture only those mergers likely to raise competition concerns within
their jurisdiction.
(b) Member countries should incorporate a jurisdictional nexus element to
their pre-merger notification, based on activity within the local
jurisdiction.29
(c) Member countries should ensure notification threshold requirements are
clear30 and objective31 and are based on information that is readily
accessible to the merging parties.32 In particular, market shares and
concentration levels should not form part of national notification
thresholds.
(d) Member countries should regularly review notification thresholds and
correct for inflation or other changes in market conditions.
29
30
31
32
Adapted from ICN, 'Recommended Practices for Merger Notification Procedures' (Merger
Working Group 2002, amended 2003, 2004, 2005, 2006), recommendation I.
(amalgamation)
Group 2002, amended 2003, 2004, 2005, 2006), recommendation II(A). The Working Group
comments that an essential feature of notification thresholds should be clarity and
simplicity: comment 1 to recommendation II(A).
Group 2002, amended 2003, 2004, 2005, 2006), recommendation II(B). See also OECD
Council, Recommendation of the Council Concerning Merger Review, 23 March 2005,
C(2005)34/final, recommendation I(A)(1)(2).
Group 2002, amended 2003, 2004, 2005, 2006), recommendation II(C).
Chapter10|Page517
Article 4 Common Pre-Merger Notification Form for Transnational

Mergers
(a) Member countries should permit parties to a transnational merger, who
meet their pre-merger notification thresholds, to notify them using the
OECD common notification form (OECD-CF1).33
(b) Member countries may develop jurisdiction-specific questions to be
annexed to the OECD-CF1 form. The form must request only objective
information about local market activity sufficient to enable an assessment
of national competitive impact to be made.
(c) Member countries should also permit parties to a transnational merger to
notify them using their prescribed national notification form.
(d) Member countries should provide that it is a condition for the use of the
OECD-CF1 form that parties to a proposed merger sign the confidentiality
waiver annexed to the OECD-CF1 form,34 permitting sharing of
information within this notification form, including any jurisdiction-specific
annex.
Article 5 Notification Fees
(a) Where parties to a transnational merger elect to file using form OECDCF1, Member countries should not impose a notification fee.
(b) Where parties to a transnational merger elect to file using national filing
forms, Member countries which elect to impose a notification fee should
impose a fee designed to cover the cost of merger review and not to
subsidise other activity.
(c) Where parties to a transnational merger elect to file using form OECDCF1, Member countries may impose fees, designed to cover all or part of
review costs, if and when they elect to proceed to a second stage review
of the notified merger.
Article 6 Timing for notification
Member countries should permit parties to a transnational merger, to notify the
relevant national authorities at any point following certification of a good faith
33
34
It is recommended that the OECD develop a common notification form based on its 1999
common notification form (OECD, Report on Notification of Transnational Mergers, above n
5,), modified to incorporate current best practice.
For this purpose, a model confidentiality waiver can be found in OECD, Report on
Notification of Transnational Mergers, above n 5.
Chapter10|Page518
intent to give effect to the proposed transaction and prior to the consummation of
that merger.35
Article 7 Two-stage review process
Member countries should ensure that pre-merger review takes place in two
distinct stages, with the first stage designed to quickly identify which mergers
raise competition concerns.
Article 8 Suspension of transaction and time frame for review
(a) Member countries should provide that a transnational merger must not be
put into effect for 30 days following notification, unless notified that the
merger is cleared or the investigation concluded prior to the expiration of
that time frame.
(b) Member countries should provide that a transnational merger may be put
into effect after a period of 30 days from notification has elapsed unless a
national reviewing authority notifies the parties that it intends to conduct a
second stage review of the transaction.
(c) Member countries should provide that if a national reviewing authority
initiates a second stage review of a notified transaction, it should be
conducted within a reasonable and determinable time frame,36 and in all
cases shall be completed within two months of parties substantially
complying with any further information requests, which must be issued at
the same time as the notice of initiation of a second stage review.
(d) Member countries should provide that a transnational merger may be put
into effect after the expiry of the second stage review period, unless a
national reviewing authority notifies the parties that it may not proceed or
that it may only proceed subject to specified conditions or if Court orders
have been obtained injuncting the merger.
(e) Nothing in this Agreement precludes a third party initiating action with
respect to the merger, including by way of injunctive proceedings, where
permitted by relevant national law.
(f) Nothing in this Recommendation precludes a party to a transaction or
third party from appealing, or seeking judicial review, of a decision of a
national reviewing authority, where permitted by national law.
35
36
This is adapted from ICN, 'Recommended Practices for Merger Notification Procedures'
(Merger Working Group 2002, amended 2003, 2004, 2005, 2006), recommendation III(A).
Group 2002, amended 2003, 2004, 2005, 2006), recommendation IV(C) and (D) and OECD
Council, Recommendation of the Council Concerning Merger Review, 23 March 2005,
C(2005)34/final, recommendation I(A)(1)(3).
Chapter10|Page519
Article 9 Sharing of information and confidentiality

(a) Member countries must ensure that they have in place confidentiality
protections for business secrets and other confidential information
received from merging parties, third parties and other national competition
authorities in connection with the review of transnational mergers.37
(b) Member countries who intend to initiate second stage review should notify
that fact to other national competition authorities and endeavour to
coordinate the request of party and third party information to reduce
duplication as far as possible.
Article 10 Remedies
(a) Member countries should ensure that, where their national reviewing
authority intends to impose conditions on the approval of a transnational
merger, they should direct those remedies to resolving only domestic
competition concerns arising from a proposed merger.38
(b) Member countries should ensure that if their national reviewing authority
intends to impose conditions on the approval of a transnational merger,
they must notify other national reviewing authorities that have been
notified of the merger, with a view to ensuring that, as far as possible, any
proffered remedies are not inconsistent with any remedies proposed in
other jurisdictions.39
Article 11 Substantive analysis
(a) Member countries should ensure that national merger laws and review
procedures are be directed to identifying and preventing or remedying
those mergers likely to significantly harm competition.40
(b) Member countries should ensure that any competitive effects analysis
applied to transnational merger review is grounded in sound economic
37
38
39
40
Compare ICN, 'Recommended Practices for Merger Notification Procedures' (Merger

Working Group 2002, amended 2003, 2004, 2005, 2006), recommendation IX.
2005, C(2005)34/final recommendation I(b)(1).
See ibid.
See ICN, 'Recommended Practices for Merger Analysis' (Merger Working Group 2008,
amended 2009) recommendation I(A)(B).
Chapter10|Page520
principles41 and considers both unilateral and coordinated effects theories

of harm.42
Article 12 Transparency
Member countries should ensure that the rules, policies, practices and
procedures involved in the merger review process are transparent and publicly
available, including by publishing reasoned explanations for decisions to
challenge, block or formally condition the clearance of a merger.43
Article 13 Review
Member countries should review their merger laws and practices on a regular
basis to seek improvement and convergence towards recognised best
practices.44
II Instructs the Competition Committee 45

(a) to explore further means to enhance the effectiveness of merger review,
reduce the costs of reviewing transnational mergers, and strengthen
coordination and cooperation among national reviewing authorities,
including by coordinating with other international organisations addressing
these issues;
(b) to periodically review the experiences under this Recommendation of
Member countries and of non-member economies that have associated
themselves with this Recommendation; and
(c) to report to the Council as appropriate on any further action needed to
improve merger laws, to achieve greater convergence towards recognised
best practices, and to strengthen cooperation and coordination in the
review of transnational mergers.46
III Invites non-member economies to associate themselves with this

Recommendation and to implement it. 47
41
42
43
44
45
46
47
amended 2009) recommendation IV(C).
amended 2009) recommendation IV(B).
This wording is taken directly from OECD Council, Recommendation of the Council
Concerning Merger Review, 23 March 2005, C(2005)34/final recommendation I(a)(2).
This wording is taken directly from OECD Council, Recommendation of the Council
Concerning Merger Review, 23 March 2005, C(2005)34/final recommendation D.
Note this is taken directly form OECD Council, Recommendation of the Council Concerning
Merger Review, 23 March 2005, C(2005)34/final recommendation II.
This wording is taken almost directly from the OECD Council, Recommendation of the
This wording is taken almost directly from the OECD Council, Recommendation of the
Chapter10|Page521
Appendix1
OECDCountryDatabase*
Contents
OECDCountryDatabase.....................................................................................................1
OverviewofOECDSubstantiveandProceduralRequirementsforMergers......................3
CountrysummaryofOECDSubstantiveandProceduralRequirementsforMergers........5
Australia..............................................................................................................................6
Austria.................................................................................................................................8
Belgium.............................................................................................................................10
Canada..............................................................................................................................12
CzechRepublic..................................................................................................................14
Denmark............................................................................................................................16
Finland...............................................................................................................................18
France................................................................................................................................20
Germany............................................................................................................................22
Greece...............................................................................................................................24
Hungary.............................................................................................................................26
Iceland...............................................................................................................................28
TheinformationinthisAppendixhasbeenextractedprimarilyfromJohnDavies(ed),
MergerControl2010:TheInternationalRegulationofMergersandJointVenturesin64
JurisdictionsWorldwide,GettingtheDealThrough(2009).Thisdatahasbeencheckedand
supplementedwithdatafromLexMundi,PreMergerNotificationSurvey(Preparedbythe
LexMundiAntitrust,CompetitionandTradePracticeGroup,September2009)anddirectly
withagencylaws,guidelines,annualreports,websitesandpressreleases,whereavailable.
Theinformationisdesignedtoprovideanoverviewonlyforpurposesofidentifying
similaritiesanddifferencesinlawsandproceduresandnottoprovideacomprehensive
guidetothelawandprocedureineachOECDcountry.
PageA11
Ireland...............................................................................................................................30
Italy...................................................................................................................................32
Japan.................................................................................................................................34
Korea.................................................................................................................................36
Luxembourg......................................................................................................................38
Mexico...............................................................................................................................40
Netherlands......................................................................................................................42
NewZealand.....................................................................................................................44
Norway..............................................................................................................................46
Poland...............................................................................................................................48
Portugal.............................................................................................................................50
SlovakRepublic.................................................................................................................52
Spain..................................................................................................................................54
Sweden..............................................................................................................................56
Switzerland........................................................................................................................58
Turkey...............................................................................................................................60
UnitedKingdom................................................................................................................62
UnitedStatesofAmerica..................................................................................................64
EuropeanUnion................................................................................................................66
PageA12
OverviewofOECDSubstantiveandProceduralRequirementsforMergers
Country
Test
Notification
Australia(formal)
SLC
Voluntary
Australia(informal)
SLC
Voluntary
Austria*
Dom
Mandatory
Belgium*
SIEC
Canada
CzechRepublic*
Notification
Threshold
Subjective(market
share)
Subjective(market
share)
Filingfee Filingfee
(lowest) (highest)
Currency
Australian
dollars
Australian
dollars
Filingfee
(lowest$AU)
Filingfee
(highest$AU)
Timeforfiling
Closingdelayed
Twostage
review
Initialreview
25,000
25,000
None
Yes
Informal
4060days
None
Yes
Informal
12weeks
68weeks
Extendedreview
25,000
25,000
Objective(turnover)
1,500
30,000
Euro
2,404
48,071
None(inprinciple
agreement)
Yes
No
4weeks
plus5months
Mandatory
Objective(turnover)
Euro
None(draft
agreement)
Yes
No
4weeks
6months(total)
SLC
Mandatory
Objective
(assets/turnover)
50,000
50,000
Canadian
dollars
51,703
51,703
None
Yes
Yes
30days
plus30days(after
inforequests)
SDC
Mandatory
Objective(turnover)
100,000
100,000
Korunas
6,286
6,286
None
Yes
No
30days
5months(total)
Yes
Yes
4weeks
3months(total)
Yes
Yes
2535days
plus90105days
Yes
Yes
1month
plus3months
(butupto9)
Yes
Yes
2540days
plus65days+25
daysMinister
Yes
Yes
1month
4months
Yes
Yes
1month
90days
Yes
Yes
45days
120180days
Yes
Informal
25days
Plus70daysplus
20days
Yes
Yes
1month45
days
4months
Denmark*
SIEC
Mandatory
Objective(turnover)
Kroner
EU
SIEC
Mandatory
Objective(turnover)
Euro
Finland*
Dom/
SIEC
Mandatory
Objective(turnover)
Euro
France*
SLC
Mandatory
Objective(turnover)
Euro
Germany*
Dom
Mandatory
Objective(turnover)
3,000
100,000
Euro
4,807
160,237
Greece*
SLC
Mandatory
Objective(turnover)
1,350
1,350
Euro
2,163
2,163
Hungary*
SIEC
Mandatory
Objective(turnover) 4,000,000 12,000,000
forints
23,689
71,066
Iceland
Dom/SLC
Mandatory
Objective(turnover)
Ireland*
SLC
Mandatory+ Objective(turnover
voluntaryoptoin +carryonbusiness)
Krona
8,000
8,000
Euro
12,819
12,819
None(conclusionof
agreementetc)
None(goodfaith
intentsufficient)
Yes(withinone
weekofnominated
event)
No(gentleman's
agree't/letterof
intent)
Noformal
documentnot
required
Yes10daysfrom
nominatedevent
(ieagreement)
Yes30daysfrom
nominatedevent
Nobutneed
formalagree'tor
publicbid
Yeswithinone
monthof
agreementorpub
bid
Italy*
Dom/SLC
Mandatory
Objective(turnover)
3,000
1.2%value
upto
60,000
Euro
4,807
96,142
Nojustneed
essentialterms
Yes
Yes
30days
plus45days
Japan
SLC
Mandatory
Objective(assets,
votingrights,sales)
Yen
Dependsontype
YesforsomeNo
forshare
acquisition
Informal
30days
120days
OverviewofOECDSubstantiveandProceduralRequirementsforMergers
Korea
SLC
Mandatory
Luxembourg*
SLC#
None
Objective(assetsor
turnover)
N/A
Objective(multiple
ofminimum
Mandatory+
wages/asset/
voluntaryoptoin
turnover)
Won
N/A
Noanytimeafter
signing
N/A
10,000
10,000
$US
(converted)
10,960
10,960
Yes
Informal
30days
plus90days
No
N/A
N/A
N/A
No
Yes(practicalnot
legal
requirement)
Fasttrack
option
15days
plus3575days
Mexico
SLC
Netherlands*
SIEC
Mandatory
Objective(turnover)
15,000
45,000
Euro
24,036
72,107
Noconcrete
intentionsufficient
Yes
Yes
4weeks
plus13weeks
NewZealand
SLC
Voluntary
Subjective(market
share)
2,250
2,250
$NZ
1,789
1,789
N/A
Yes(practical)
Informal
10days
40100days
Norway
SRC
Mandatory
Objective(turnover)
Kroner
No
Yes
Yes
15days
100days
Poland*
SRC
Mandatory
Objective(turnover)
5,000
5,000
zloty
1,954
1,954
Noletterofintent
sufficient
Yes
No
2months(can
beextended)
Portugal*
Dom/
SIEC
Mandatory
Subjective(shareor
turnover)
7,500
25,000
Euro
12,018
40,059
Yeswithin7days
ofrelevantevent
Yes
Notformally
30
90100
Slovakia*
Dom/
SIEC
Mandatory
Objective(turnover)
3,319
3,319
Euro
5,318
5,318
No(agreementor
acceptanceof
publicbid)
Yes
No
60
plus90105days
Spain*
SIEC
Mandatory
Subjective(shareor
turnover)
1,530
60,000
Euro
2,452
96,142
No
Yes
Yes
1monthplus plus2monthsplus
10days
15days
Sweden*
SIEC
Mandatory
Objective(turnover
Krona
Nogoodfaith
intent
No
Yes
25to35days
plus3months
Switzerland
Dom
Mandatory
Objective(turnover
5,000
5,299
106424perhor
Nomusthave
signedagreement
Yes
Yes
1month
plus4months
Turkey
Dom/
SIEC
Mandatory
Subjective(shareor
turnover)
Nofinaland
executeddocument
req'd
Yes
No
36weeks
hourlyrate
SwissFrancs
of100400
0
Lira
Subjective(shareor
30,000
90,000
Pounds
53,447
160,340
No
Yes/No
Informal
40days
plus24weeks
turnover)
Objective
SLC+
Noanytimeafter
$US
USA
Yes
Yes
30days
plus90days
49,320
306,883
Mandatory
(turnover/assets/
45,000
280,000
signing
(converted)
Dom
votingsecurities)
SLC=SubstantialLesseningofCompetitionorSubstantialLoweringofCompetitionorreduceorimpairorpreventcompetition
SIEC=SubstantialImpedimenttoEffectiveCompetition.InrelationtoSpainitreferstopreventingthemaintenanceofeffectivecompetition
SRC=SignificantRestrictionofCompetition
SDC=SubstantialDistortionofCompetition
Dom=Dominance
DatafromJohnDavies(ed),MergerControl2010:TheInternationalRegulationofMergersandJointVenturesin64JurisdictionsWorldwide,GettingtheDealThrough(2009)updatedforcurrency
Currencyconversionratesallon12December2009fromXE.com
*=MemberofEuropeanUnion
#=Luxembourghasnospecificmergerlaw.Competitionlawsgenerallycaptureconducthavingpurposeoreffectofreventing,restrictingordistortingcompetitionandabuseofdominantposition
UK*
SLC
Voluntary
CountrysummaryofOECDSubstantiveandProcedural
RequirementsforMergers
PageA15
Australia
SubstantiveLaw
Test
SubstantialLesseningofCompetition
(Publicbenefitauthorisationpossible)
Relevanceof
efficiencies
Specificallyrelevanttoauthorisationapplication
EfficiencieswillalsobeconsideredbytheACCCaspartofits
clearanceprocessiftheyaffectthecompetitivenessofamarket.
Legislation
TradePracticesAct1974(Cth)ss50and50A
Guidelines
MergerGuidelines2008
Useofmarket
sharesand
concentration
HHIConcentrationthresholdsusedaspreliminaryindicator
(unlikelytobeconcernedwhereHHIislessthan2000orgreater
than2000withadeltaoflessthan100)
ResponsibleBody(s) AustralianCompetitionandConsumerCommission(clearance)
AustralianCompetitionTribunal(clearanceappealsand
authorisations)
FederalCourtofAustralia
Notification
Requirement
Voluntary(Informalorformaloptions).
Authorisationpossibleonpublicbenefitgrounds.
Threshold
Nomandatorynotification;partiesencouragedtonotifyof
horizontalmergerswherethemergedfirmwillhaveapost
mergermarketshareofmorethan20%.
Jurisdictionalnexus
NomandatorynotificationbuttoinfringeActthemergermust
haveeffectorlikelyeffectofsubstantiallylesseningcompetition
inamarketinAustralia.
Fee
$0(informalclearance);$25,000(formalclearanceand
authorisations).
Filingdeadline
Noneforinformalclearance.
Forformalclearancepartiesmustnotcompleteuntildecision
made.
Time(Stage1)
Informalclearance;normally12weekswherenomarket
inquiriesarerequiredand68weekswheremarketinquiriesare
required.
PageA16
Formalclearance:decisionrequiredwithin40days(maybe
extendedby20daysincomplexcases.
Forauthorisation:threemonthsmaybeextendedtosix
months.
Time(Stage2)
Informalclearance:Cumulativetimeframeofapproximately12
weeks.Clockisstoppedwhilepartiesrespondtoinformation
requests.
Formand
information
requirements
Forinformalreviewlevelofdetaildependsonlikelihoodof
mergerraisingconcerns.Forformalclearance,FormO,
ApplicationforMergerClearance(s95AETPA)anddetailed
responsestoquestionssupportedbyevidencearerequired.
Failuretoanswerquestionscanresultinapplicationbeing
declaredinvalid.
AuthorisationapplicationsrequiressubmissionofFormS,
accompaniedbyparticularsofthetransaction(includingsimilar
informationforaclearanceapplication)anddetailsofany
claimedpublicbenefits
Remedies
Behaviouralandstructuralundertakingspossible;clear
preferenceforstructuralremedies.
Language
English
Appeal
Noappealfrominformalclearancedecisions,butpartiesmay
seekCourtorderdeclaringmergerlawfulifACCCindicatesitwill
opposethemerger.
AppealfromformalclearancedecisionstotheCompetition
Tribunal.
NomeritsappealfromauthorisationdecisionsoftheTribunal.
Guidelines
MergerGuidelines(November2008)
ACCCFormalMergerReviewProcessGuidelines(June2008)
ACCCMergerReviewProcessGuidelines(July2006)
InternationalAgreementsandCooperation
MemberofICN
BilateralorTrilateralagreementswithNewZealand,theUS,Canada,theEUandtheUK.
TPAprovidesforinformationsharingofnonconfidentialinformation.
Comments
Informalmergerreviewprocessgenerallyadopted;formalprocessnotyetinvoked
ACCCreviewed411Mergersinthe20082009fiscalyear.Ofthese,tenwereopposed
andfourresolvedthroughundertakings.21werewithdrawnbeforeadecisionand371
werenotopposed.
PageA17
Austria
SubstantiveLaw
Test
Creationorstrengtheningofadominantposition
Relevanceof
efficiencies
Relevanttoassessmentsofdominanceandconsiderationsof
whethermergerisnecessarytoenhanceinternational
competitiveness,buthasnotplayedanimportantanalyticalrole.
Legislation
AustrianCartelAct2005,PartI,chapter3
Guidelines
None
Useofmarket
sharesand
concentration
Rebuttablepresumptionscreatedonthebasisofmarketshare
(dominancepresumedwheremarketshareexceeds30%.
ResponsibleBody(s) FederalCompetitionAuthority(FCA)
FederalCartelProsecutor(FCP)
CompetitionCommission(advisoryrole)
ViennaCourtofAppealsasCartelCourt(firstinstance)
AustrianSupremeCourtasSupremeCartelCourt(asappeal
court)
Notification
Requirement
Mandatory
Voluntarynotificationisnotavailable.
Intentionalornegligentfailuretonotifycanresultinafineofup
to10%ofworldwideturnoverachievedinthelastbusinessyear.
Anytransactionrequiredtobenotifiedthatisconcludedpriorto
clearanceisnullandvoid.
Threshold
Combinedworldwideturnoverofallundertakings
concernedexceeds300million;
CombinedAustrianturnoverofallundertakingsconcerned
exceeds30million;and
Individualworldwideturnoverofatleasttwoofthe
undertakingsexceeds5million
(ademinimisexceptionalsoappliesandspecialrulesforsome
industries)
Jurisdictionalnexus
Incorporatedinthreshold
Fee
Fixedfeeof1,500forphaseIproceedings.ForphaseII,afeeof
upto30,000,tobesetbytheCartelCourt.
PageA18
Filingdeadline
Noneforsubmission(inprincipleagreementsufficient).
Mergermustnotbecompletedbeforeclearance.
Time(Stage1)
Fourweeks
Time(Stage2)
Uptosixmonths
Formand
information
requirements
RecommendedformisprovidedbytheFCA.Comprehensive
informationonaspectsthatcouldgiverisetothecreationof
marketdominanceisrequired.
Remedies
Behaviouralandstructuralremediespossible;behavioural
remediesusedmoreofteninpractice.
Language
German
Appeal
JudicialreviewavailabletoSupremeCartelCourtwhichhastwo
monthstoreachadecision.
Guidelines
None
MemberofICN
MemberofEU
MemberofEuropeanCompetitionAuthoritiesAssociation(ECA)
ParticularlyclosecooperationwithGermany
Comments
MergerscontraveningthesubstantivelawmayneverthelessbeclearedbytheCartel
Courtonindustrialpolicygrounds(suchasenhancinginternationalcompetitiveness).
PageA19
Belgium
SubstantiveLaw
Test
Significantimpedimenttoeffectivecompetition(SIEC)
Prohibitsconcentrationswhichsignificantlyimpedeeffective
competitionintheBelgianmarketorasubstantialpartofit,in
particularasaresultofthecreationorstrengtheningofa
dominantposition.
Relevanceof
efficiencies
WhenmakingtheirassessmenttheCompetitionCouncilmust
considerthedevelopmentoftechnicalandeconomicprogress,
provideditistotheadvantageofconsumersanddoesntprovide
anobstacletocompetition.
Legislation
BelgianCompetitionAct2006
Guidelines
None
Useofmarket
sharesand
concentration
Concentrationsmustbeclearedwherethemarketshareofthe
partiesinBelgiumdoesnotexceed25%Moregenerallythe
authoritiesarelookingbeyondmarketsharetoamore
economicbasedapproachtoacompetitionassessment.
ResponsibleBody(s) CompetitionCouncil(Tribunaldecisionmakingpower)
DirectorateGeneralCompetition(Governmentdepartment
prosecutescases)
Notification
Requirement
Mandatory
Fineofupto10%ofBelgianturnoverforfailuretonotify,plus
periodicpayments.
Threshold
CombinedBelgianturnoverexceeding100million;and
AtleasttwoofthepartieshaveindividualBelgianturnover
ofatleast40million
Jurisdictionalnexus
Incorporatedinthreshold
Fee
None
Filingdeadline
Draftagreementcanbesufficientforfiling,providedfinal
agreementwillnotdiffersubstantially.
Mustnotcompleteuntilclearancegranted(exemptionpossible).
Time(Stage1)
40days(canbeincreasedatrequestofparties)
20daysifsimplifiedprocedureappliesandnocompetition
concerns
PageA110
Time(Stage2)
60days(canbeincreasedatrequestofparties)
Formand
information
requirements
SpecificformrequiredCONCC/C
Onerousinformationrequirements.
Asimplifiedformisavailableinsomecase,buttheinformation
requirementsstillremainonerous.
Remedies
Behaviouralandstructuralremediespossible.Thefirsttime
theCompetitionCouncilimposedastructuralremedywasin
November2008(Belgacom/Scarlet)anditoccurredin
combinationwithbehaviouralremedies
Language
French,DutchorGerman(butsupportingdocumentsmustbe
providedintheiroriginallanguage)
Appeal
Within30daystotheBrusselsCourtofAppeal(including
considerationofdevelopmentsoccurringaftertheCompetition
Councilsdecision).Decisionsnormallyoccurwithinayearor
less
Guidelines
None
MemberofICN
MemberofEU
ParticularlyclosecooperationwithGermany
Comments
In2006BelgiummodifieditstestfromadominancetotheSIECtesttoalignwiththeEU
PageA111
Canada
SubstantiveLaw
Test
SubstantialLesseningofCompetition
Relevanceof
efficiencies
Efficiencydefenceavailable.TheCompetitionTribunalinitially
adoptedatotalsurplusstandardtoevaluatetheclaimed
efficiencies(SuperiorPropane),butthiswasrejectedonappeal
totheFederalCourtofAppealandtheTribunalsubsequently
adoptedabalancingweightsapproachtoefficiencieswhich
providessomeconsiderationofdistributionaleffects.
Legislation
CompetitionAct
Guidelines
CompetitionBureau,MergerEnforcementGuidelines(2004)Pt3
CompetitionBureau,EfficienciesinMergerReview(2March
2009),PartIV
Useofmarket
sharesand
concentration
Marketshareandconcentrationthresholdstoidentifymergers
thatareunlikelytohaveanticompetitiveconsequencesfrom
thoserequiringmoredetailedanalysis.Ifpostmergermarket
sharewouldexceed35%orwhereCR4morethan65%andshare
ofmergedentitylessthan10%.Usedasguidesonly.
ResponsibleBody(s) CommissionerofCompetition
CompetitionBureau(independent)
CompetitionTribunal
Notification
Requirement
Mandatorypremergernotification
Voluntaryformalnotificationisalsoavailable,butsignificant
filingfeesarerequiredandtheoptionisrarelyused
Threshold
Partysizethresholdparties,togetherwithworldwideaffiliates
musthaveassetsinCanadaorannualgrossrevenuefromsales
in,from,orintoCanada,ofC$400ormore
Transactionsizethresholdassetsorrevenuesgeneratedfrom
assetsinCanadamustexceedC70million
Thresholdsaresubjecttoannualinflationaryadjustments
Jurisdictionalnexus
Generalthresholdincorporatesjurisdictionaltest
Jurisdictionaleffectstestappliesandthetransactionmust
involveanoperatingbusinessinCanada.
Fee
C$50,000
PageA112
Filingdeadline
Nonebutmustnotconsummateuntilwaitingperiodexpires
(penaltiesofuptoC$10,000foreachdayofnoncompliancemay
beimposed)
Time(Stage1)
30days(unlessclearedbytheBureaupriortothistime)
Time(Stage2)
Bureaumayimposeanadditional30daywaitingperiodifa
supplementaryinformationrequestisissued.Theclockwillstop
untilanyrequestisfullycompliedwith.
Formand
Information
requirements
Newregulations(2009)provideaformfornotificationcontaining
initialinformationaboutthebusinessandtheproposed
transaction.TheBureaumaythendemandmoreinformation
pursuanttoasupplementaryinformationrequest.
Appeal
FromtheTribunaltotheFederalCourtofAppealand,withleave,
totheSupremeCourtofCanada.Theappealprocessislongit
maytakemanymonths.
Remedies
IftheCompetitionBureauwishestochallengeatransactionit
mustbringanapplicationbeforetheTribunalforaremedial
orderand/orinteriminjunctions.Thisoccursonlyrarely.
Mostmergerissuesareresolvedthroughnegotiatedsettlement.
Structuralremediespreferred;behaviouralremediespossible.
Language
EnglishorFrench(recommended)
Guidelines
CompetitionBureau,MergerReviewProcessGuidelines(18
September2009)
CompetitionBureau,ConfidentialityandMutualAssistancein
EnforcingCompetitionLaws(2003)
MemberofICN
ClosecooperationwithUnitedStates,EuropeanUnionandUnitedKingdom
AlsohasagreementswithAustralia,Brazil,Chile,CostaRica,Japan,Korea,Mexicoand
NewZealand
Comments
TherecentchangestotheCanadianMergerControlregimebringsitmorecloselyinline
withtheHSRprocessintheUnitedStates.Thiswasdonewithaviewtominimizing
unnecessaryproceduralorsubstantivedifferences,giventhehighlevelofintegrationof
businessoperationsinthetwocountries(CompetitionPolicyReviewPanel,Final
Report:CompetetoWin(June2008)53)
Previouslytherewasalongform/shortformoptionwithasinglewaitingperiodforeach
(42daysand14daysrespectively)
PageA113
CzechRepublic
SubstantiveLaw
Test
SubstantialDistortionofCompetition
(particularlybecauseitcreatesorstrengthensadominant
position)
Relevanceof
efficiencies
Economicefficienciesmustoutweighthenegativeeffectsofthe
mergertobeacceptedbytheOfficefortheProtectionof
Competition.Theburdenofprooflieswiththemergingparties.
Legislation
ActontheProtectionofCompetition(article17)
Guidelines
OfficefortheProtectionofCompetition,NoticeoftheNotionof
UndertakingsConcernedUndertheActonProtectionof
Competition
Useofmarket
sharesand
concentration
Wherethemergedentitywouldnotenjoyamarketshare
exceeding25%intherelevantmarket,themergershallbe
deemednottomateriallyinterferewith,unlessthecontraryis
proven.
Alsorelevanttolevelofinformationrequiredfornotification
wherethemergerwouldresultinacombinedmarketshareof
15percentormore,partiesmustsubmitadescriptionof
generalconditionsontherelevantmarkets.
ResponsibleBody(s) OfficefortheProtectionofCompetitionoftheCzechRepublic
Notification
Requirement
Threshold
(a) CZK1.5billion(AU$104m)totalnetturnoverinCzech
Republicofallconcerned+atleasttwoundertakingshave
netturnoverexceedingCZK250m;or
(b) NetturnoverinCzechmarketofrelevantparty(article12)is
greaterthanCZK1.5billionandworldwidenetturnoverby
anotherundertakingconcernedexceedsCZK1.5billion
Jurisdictionalnexus
Thresholdcalculationsincorporatenexus
Noneedtonotifyifconcentrationrealisedabroadandjoint
shareofallparticipantssmallerthan10%oftherelevantCzech
market
Fee
100,000koruna
Filingdeadline
None
Time(Stage1)
30days
PageA114
Time(Stage2)
5months(ifnodecisionwithintimelimit,deemedapproved)
Formand
Information
requirements
FormprescribedbyDecreeoftheOfficefortheProtectionof
CompetitionNo368/2001Coll.Thelevelofdetailgenerally
dependsontheimportanceofthetransactionandtheextentof
competitiveeffects.
Appeal
PariesmayappealtotheOPCwithin15days.Thisdecisionis
subjecttoappealinthecourts.
Remedies
Structuralandbehaviouralremediesareavailable
Language
Czech(notificationincludingallpartsandannexes)
Officegenerallyconsidersitsufficientforrelevantpartstobe
translated
Guidelines
OfficefortheProtectionofCompetition,DecreeoftheOfficefor
theProtectionofCompetitionNo252/2009of31July2009Coll
StipulatingDetailsofaConcentrationNotification
OfficefortheProtectionofCompetition,NoticeoftheOfficefor
theProtectionofCompetitiononthePrenotificationContacts
withMergingParties
OfficefortheProtectionofCompetition,NoticeoftheOfficefor
theProtectionofCompetitiononCalculationofTurnoverforthe
PurposeoftheControlofConcentrationsBetweenUndertakings
OfficefortheProtectionofCompetition,Noticeonthe
ApplicationoftheFailingFirmDefenceConceptinthe
AssessmentofConcentrationsofUndertakings
OfficefortheProtectionofCompetition,Noticeonthe
ProhibitionofImplementationofConcentrationsPriortothe
ApprovalandExemptionsThereof
MemberofICN
MemberoftheEU
PageA115
Denmark
SubstantiveLaw
Test
SignificantImpedimenttoEffectiveCompetition
ModelledonEUlaw
Relevanceof
efficiencies
Noefficiencydefence
Legislation
DanishCompetitionAct(ConsolidatedCompetitionActNo1027
of21August2007,asamendedbyActNo375of27May2008)
PurposeofActistopromoteefficientresourceallocation(s1).
Inpracticeefficiencyargumentsaremadewithcaution.
ExecutiveOrderontheCalculationofTurnoverinthe
CompetitionAct(No895of21September2000)
ExecutiveOrderontheNotificationofConcentrations(No480of
15June2005)
Guidelines
GuidelinesoftheEUapply
Jurisdictionalnotice
Useofmarket
sharesand
concentration
SeeEU
ResponsibleBody(s) CompetitionCouncil
CompetitionAuthority(SecretariatoftheCompetitionCouncil)
Notification
Requirement
Threshold
CombinedaggregateturnoverinDenmarkofallfirmsconcerned
ismorethan3.8billionkronerandaggregateturnoverin
Denmarkofatleasttwoofthefirmsis300millionkroner;or
AggregateturnoverinDenmarkofatleastoneofthefirmsis
morethan3.8billionkronerandaggregateworldwideturnover
ofatleastoneotherfirmis3.8billionkroner
Jurisdictionalnexus
TurnoverinDenmark
Fee
None
Filingdeadline
None
Time(Stage1)
10days(8workingdays)
Thisisnotaformalstageonereviewperiod,butisthetime
duringwhichtheCompetitionAuthoritywilldeclarenotification
PageA116
completeorspecifymissinginformation.
4weeksafternotificationiscomplete,theCompetitionCouncil
hasaninitialfourweekreviewperiod
Time(Stage2)
Withinthreemonthsofcompletenotification
Formand
Information
requirements
SpecificformK2.Informationrequiredissubstantial(similarto
thatrequiredbytheEU)
Appeal
DecisionsoftheCompetitionCouncilmaybeappealedtothe
CompetitionAppealsTribunalwithfurtherappealtothecourts.
Therehavebeennoappealstodate.
Remedies
Structuralandbehaviouralremediesavailable.
Remediesmaybeappealedseparatelyfollowingapprovalofa
merger
Language
NotificationforminDanishorEnglish.Allotherdocumentsin
Danish(ifagreedsomedocumentsmaybeEnglish)
Guidelines
ExecutiveOrderontheCalculationofTurnoverinthe
CompetitionAct(No895of21September2000)
ExecutiveOrderontheNotificationofConcentrations(No480of
15June2005)
MemberofICN
MemberofEU
InformationexchangeagreementbetweenDenmark,Iceland,NorwayandSweden
Comments
Until2008nomergershadbeenblockedbytheCompetitionCouncil.Sincethenone
mergerhasbeenblockedandoneconditionallycleared.Theremainderhavebeen
unconditionallycleared.Legislationtoreducethethresholdforfilingisanticipatedfor
2010.
Anewmergerregimeisexpectedtocomeintoforcein2010following
recommendationsofMergerCommittee,whichreportedtotheDanishGovernmenton
16December2008.Theserecommendationsincludedreducingthresholdsfor
notification(from3.8billionto900million),theintroductionofsimplifiedproceduresfor
unproblematicmergersandanextensionoftimeavailablefortheCounciltotry
problematicmergers.
PageA117
Finland
SubstantiveLaw
Test
CreationorStrengtheningofDominantpositionresultingin
substantialImpedimenttoCompetition(proposaltoreplace
withSIECtest)
Relevanceof
efficiencies
Authoritieswillconsiderincreasesinproductionefficiencyand
dynamicefficiency,providedmergerspecificandpassedonto
consumers.
Legislation
ActonCompetitionRestrictions(480/1992)Chapter3a
Guidelines
FCAGuidelinesontheRevisedProvisionontheControlof
Concentrations
EUMergerGuidelinesarealsoused.
Useofmarket
sharesand
concentration
Consideredbutnotusedastriggersandnopresumptionsraised.
ResponsibleBody(s) FinnishCompetitionAuthority(FCA)
MarketCourt
Notification
Requirement
Failuretocomplywithfilingobligationscanresultinfinesofup
to10percentofturnover.
Threshold
Notificationrequiredwherecombinedaggregateturnoverof
partiesexceedsEUR350mandaggregateturnoverinFinland
(includingimports)ofeachofatleasttwopartiesexceeds
EUR20m
Jurisdictionalnexus
Localturnoverrequirement
Fee
None
Filingdeadline
Requiredwithinoneweekfromacquisitionofcontrol,
publicationofrelevantpublicbidordecisiontomerge(itis
possibletopostponethiswithapprovaloftheFCA)(see
comments,below)
Time(Stage1)
1month
Time(Stage2)
3months(furthertwomonthspossibleandafurtherthree
monthspossibleifrecommendationistoblockamerger)
PageA118
Formand
Information
requirements
Specificformrequired,similartoFormCOoftheEUMR.
Shortformavailableinsomecases.InindividualcasestheFCA
maygrantwaiversinrespectofcertaininformationdeemed
unnecessary.
Appeal
DecisionsoftheMarketCourtmaybeappealedtotheSupreme
AdministrativeCourt(canbemanymonths)
Remedies
Structuralremediespreferred,butbehaviouralremediesmaybe
used
Language
FinnishorSwedish
(appendicesgenerallyacceptedinEnglish)
MemberofICN
MemberofEU
Comments
AnewCompetitionActisexpectedtoenterforcein2010,followingareportonthe
revisionoftheCompetitionAct,submittedtotheGovernmentinJanuary2009.Thekey
reformproposedformergersistoreplacethedominancetestwiththeSIECtestand
removalofthedeadlineforfiling.
PageA119
France
SubstantiveLaw
Test
Significantlesseningofcompetition,especiallybycreatingor
strengtheningapositionofindividualorcollectivedominance
Relevanceof
efficiencies
Authoritymustconsiderwhetherthemergerwouldmakea
sufficientcontributiontoeconomicprogresstooffsetdamageto
competition.Efficienciesmustbequantifiableandverifiable,
mergerspecificand,atleastsomebenefitmustbepassedonto
consumers
Legislation
FrenchCommercialCode
Guidelines
Useofmarket
sharesand
concentration
Consideredbutnotusedastriggersandnopresumptionsraised.
ResponsibleBody(s) AutoritdelaConcurrence
Notification
Requirement
(finesforfailuretonotifyapplytobothfirmsandindividuals)
Threshold
Allfirmsparttothetransactionachievedaworldwidecombined
turnoverof150andatleasttwoachievedaturnoverinFrance
exceeding50m;or
Mergersinvolvingtwoormorefirmsoperatingretailpremises
whereallfirmsinvolvedachieved,inpreviousfinancialyear,a
worldwideturnoverofover75mandatleasttwoachieved
turnoverintheretailtradesectorinFranceexceeding15;or
MergersinvolvingfirmsoperatinginFrenchoverseas
departmentsandcommunitieswhereatleastonefirmhas
activitiesinoneormoreFrenchoverseasdepartmentor
communityand(a)allthefirmspartytotheconcentration
achieved,inthepreviousfinancialyear,aworldwideturnoverof
over75andatleasttwoachievedturnoverexceeding15inat
leastoneoftheFrenchoverseasdepartmentsorcommunities
concerned
Jurisdictionalnexus
Fee
None
Filingdeadline
None
PageA120
Time(Stage1)
60workingdays
Time(Stage2)
65workingdaysfromopeningofsecondphase(unlessclocked
stopped)+afurther25workingdaysfromendofsecondphase,
duringwhichtheMinisterofEconomymayreviewthecase
Formand
Information
requirements
DecreeNo2002689setsoutcontentoffilinganditisonerous,
includingmergeragreement,detailsoflegalandfinancial
aspectsofdealingandlikelyimpactoncompetition,identityof
partiesconcerned,definitionofproductandgeographicmarkets
anddescriptionofthepositionheldbythefirmsintherelevant
market.Themostdetailedinformationisrequiredinrelationto
affectedmarketsthoseinwhichthepartiestogetherholdat
least25%ofthemarket.Fourcopiesarerequired
Thenew2009MergerGuidelinesalsoestablishasimplified
notificationprocessforsimplecases
Appeal
FrenchSupremeAdministrativeCourt
Remedies
Behaviouralandstructuralremediesused
Language
French
Guidelines
MemberofICN
MemberofEU
Comments
Francerecentlyreleasednewmergerguidelines(16December2009)
PageA121
Germany
SubstantiveLaw
Test
Creationofstrengtheningofadominantmarketposition
Relevanceof
efficiencies
Donotplayamajorrole.Clearancecanbegrantedifthemerger
wouldimprovemarketconditionssomuchthattheywould
outweighthedisadvantageofdominance.Tobeconsideredan
improvementofmarketconditionsefficiencieswouldneedtobe
passedontotheconsumer.Theonusisonthemergingparties
todemonstratethis.
Legislation
ActAgainstRestraintsofCompetition,ARCof1958,chapterVII
Guidelines
InformationLeafletontheGermanControlofUndertakings(July
2005)
InformationLeafletonDomesticEffect(January1999)
Useofmarket
sharesand
concentration
Marketsharesarethestartingpointforassessmentbutother
criteria,includingmarketstructureandbarrierstoentry,are
considered.Rebuttablepresumptionsarecreatedlinkedto
marketshare;singlemarketdominanceispresumedwherea
singlecompanyhasatleastonethirdofthemarketandjoint
dominanceispresumedwhenthreeorlesshaveacombined
marketshareofatleast50%orfiveorlesshaveacombined
shareofatleasttwothirds.
ResponsibleBody(s) FederalCartelOffice(Bundeskartellamt)
Notification
Requirement
Threshold
Combinedworldwideturnoverofallparticipatingfirmsexceeds
500millionandoneparticipatingfirmhasaturnoverexceeding
25millionwithinGermanyandatleastonefurtherundertaking
hasaturnoverinGermanywhichexceeds5(deminimus
exemptionsapply)
Jurisdictionalnexus
AppreciableeffectwithinGermanyappliedbroadly.All
concentrationsmeetingthedomesticturnovertestsarelikelyto
satisfythisrequirement
Fee
Normallyupto50,000butupto100,000inexceptional
cases.Averagecasesincurafeeof25,000andmoreminor
casesincurfeesofbetween3,000and15,000.Additional
costsforexternalconsultantsmayalsobeimposedonthe
parties
PageA122
Filingdeadline
None
Time(Stage1)
1month
Time(Stage2)
4monthstotal(possibilityofextension)
Formand
Information
requirements
Nospecifiedform(sampleformisavailable).Onlyalimited
amountofinformationisrequired.Levelofinformationwill
dependonthelikelihoodofthemergerraisingsubstantive
issues.
Appeal
FullreviewtoHigherRegionalCourtofDsseldorf
FromtheHigherRegionalCourtfurtherreviewonpointsoflaw
totheFederalCourtofJustice.
Proceedingsgenerallylast1236months.
Remedies
Structuralremediespreferred;behaviouralremediesrarely
acceptedassufficient
MemberofICN
MemberofEU
Comments
95%ofmergersclearedinstage1
TheFCOisreviewingitssubstantivemergerguidelines
TheMinistercanapproveamergeronoverridingpublicinterestgrounds,includingif
negativeeffectsofthemergeroncompetitionwouldbeoutweighedbybenefitstothe
economyasawhole.Thisoccursonlyrarely.
PageA123
Greece
SubstantiveLaw
Test
SignificantrestrictionofcompetitionintheGreekmarket,
particularlythroughcreationorreinforcementofdominant
position
Ministerialauthorisationpossibleongroundsofeconomic
interest
Relevanceof
efficiencies
Partofcompetitionanalysis.Modernisationofproductionisone
typeofeconomicinteresttheMinistriesofNationalEconomy
andDevelopmentmayconsiderwhendecidingwhetherto
approveamergeronthegroundsofgeneraleconomicinterest.
Legislation
Law703/77ontheControlofMonopoliesandOligopoliesand
ProtectionofFreeCompetition
Guidelines
None
Useofmarket
sharesand
concentration
Nopresumptions(exceptinrelationtothemediaindustry)
ResponsibleBody(s) CompetitionCommission
DirectorateGeneralofCompetition
Notification
Requirement
Closingbeforeclearanceresultsinafineofatleast30,000and
upto15%ofworldwideaggregateturnover
Threshold
Combinedaggregateworldwideturnoverofatleast150mand
atleasttwoparticipatingfirmshaveanaggregateturnover
exceeding15inGreece.
Jurisdictionalnexus
ActualorpotentialeffectsonGreekmarket.Thresholds
incorporatelocalturnoverrequirement.
Fee
1,050
Filingdeadline
Within10workingdaysfromconclusionofbindingagreement,
announcementofpublicbidoracquisitionofcontrollinginterest.
Failuretonotifyisacriminaloffence.
Time(Stage1)
1month
Time(Stage2)
2months(furtherappealpossible)
PageA124
Formand
Information
requirements
OneroussimilartoEUformCO.Shortformoptionavailable
Appeal
AdministrativeAppealCourtofAthens
FurtherappealpossibletotheCouncilofStateonpointsoflaw
andprocedure
Remedies
Anyconditionsthatwouldrendertheconcentrationcompatible
withthesubstantivetestforclearance
Language
Greek(supportdocumentsgenerallypermittedinEnglish)
Guidelines
None
MemberofICN
MemberofEU
Comments
TheMinistriesofNationalEconomyandDevelopmentmayapprovethemergeronthe
groundofgeneraleconomicinterestifthisoverridesanylikelyrestrictionon
competition
PageA125
Hungary
SubstantiveLaw
Test
SubstantialImpedimenttoEffectiveCompetition(SIEC)
(since1June2009)
Relevanceof
efficiencies
Relevantwheretheyproduceconsumerbenefits
Legislation
ActLVIIof1996ontheProhibitionofUnfairandRestrictive
MarketPractices
ActCXXof2001onCapitalMarkets
ActIVof2006
Guidelines
None
Useofmarket
sharesand
concentration
Nopresumptions
ResponsibleBody(s) HungarianCompetitionAuthority
CompetitionCouncil(decisionmakingbody)
Notification
Requirement
Threshold
Totalnetsalesrevenueofallpartiesexceeded15billionforints
inpreviousbusinessyearandatleasttwogroupsoffirms
concernedhadtotalnetsalesrevenueintheprecedingyear
exceeding500millionforintseach(requirementsareslightly
morecomplexthanthis)
Jurisdictionalnexus
EffectwithinHungary.Meetingtheturnoverthresholdis
sufficientforthispurpose.
Fee
HUF2mforinsignificantmergers
FurtherHUF8minmorecomplicatedmatters
Filingdeadline
Within30calendardaysfrom(a)publicationoftheinvitationto
tender;or(b)conclusionofbindingcontract;or(c)acquisitionof
thecontrollingrights,wherecontrolisobtainedthroughother
means.
Time(Stage1)
30days(decidewhethertoproceedatStage1or2)
45daysforstage1assessment(maybeextended)
PageA126
Time(Stage2)
120days(maybeextended
Formand
Information
requirements
SimilartotheEUMRformCO
Appeal
MetropolitanCourtinBudapestandthentotheCourtofAppeal
inBudapest.Decisionsnormallymadewithin12years.
Remedies
Structuralandbehaviouralremediesavailable
Language
Hungarian
Guidelines
Noticeondifferentiatingbetweenconcentrationssubjectto
authorisationinsimplifiedorfullprocedure(Notice1/2003
modifiedbyNotice1/2005)
MemberofICN
MemberofEU
PageA127
Iceland
SubstantiveLaw
Test
Preventionofeffectivecompetitionbybringingaboutaor
strengtheningapositionofdominance
Relevanceof
efficiencies
Section17cprovides:Whenassessingamerger,accountshall
betakenoftechnologicalandeconomicefficiencies,provided
thatitisinthebestinterestofconsumersandcompetitionisnot
hindered.
Legislation
CompetitionAct
RulesNo881/2005RelatingtotheNotificationofMergers
Guidelines
AppliesEUmergerguidelines
Useofmarket
sharesand
concentration
Marketshareandconcentrationareimportant,butnot
determinative
ResponsibleBody(s) CompetitionAuthority
CompetitionCouncil
Notification
Requirement
Mandatory
Nopenaltiesorfinesforfailingtonotify(article52)
Threshold
CombinedturnoverofISK1billionormoreandatleasttwoof
theundertakingshaveaminimumannualturnoverofISK50
millioneach
Jurisdictionalnexus
Requiresmergertohaveaneffect(orbeintendedtohavean
effect)inIceland.Thedegreeofeffectisnotclear.
Fee
Nofee
Filingdeadline
Mustbenotifiedwithinoneweekofagreementonamergeror
withinoneweekofpublicannouncementofthemerger
Time(Stage1)
30days
Time(Stage2)
Threemonths
Formand
Information
requirements
ContainedinAnnextotheRulesontheNotificationofMergers
(MergerList).Exemptionsfromcertaininformation
requirementsareavailableiftheinformationisnotnecessaryfor
areviewofthemerger(butapplicationforexemptionisrequired
beforetherequirementtonotifyarises).Detailcomparableto
EUMRformCO
PageA128
Appeal
CompetitionAppealsCommittee(decisionwithin6weeks)
FurtherappealtotheIcelandiccourts
Remedies
Language
Icelandic
MemberofICN
MemberofEuropeanCompetitionAuthorities(ECA)
CooperationagreementwithScandinaviancompetitionauthorities(Danish,Norwegian
andSwedish)2001(involvesinformationexchangesofbothconfidentialandnon
confidentialinformation)
Comments
AppliedtojoinEUin2009.Targetdateforaccessionis2012.
PageA129
Ireland
SubstantiveLaw
Test
Substantiallesseningofcompetition
Relevanceof
efficiencies
Anticompetitiveeffectsmaybecompensatedforbymerger
specificefficienciesonusisontheparties
Legislation
CompetitionAct2002(Part3)
Guidelines
Useofmarket
sharesand
concentration
N/02/003NoticeinrespectofcertaintermsusedinPart3
oftheCompetitionAct2002.
N/02/004Noticeinrespectofguidelinesformerger
analysis.
UsesHHItoanalysemarketconcentration.
Notification
Requirement
Voluntarynotificationavailablewherethresholdsnotmet
Threshold
Inthepreviousfinancialyeartheworldwideturnoverofatleast
twoofthefirmsisnotlessthan40millionandatleasttwoof
thefirmsinvolvedcarryonbusinessinanypartofIrelandand
theturnoverintheRepublicofIrelandofanyoneofthe
undertakingsinvolvedisnotlessthan40m.
Jurisdictionalnexus
Localturnover
Fee
8,000
Filingdeadline
Withinonemonthoftheconclusionoftheagreementorthe
makingofapublicbid.
Time(Stage1)
1month(maybeextendedto45days)
Time(Stage2)
4months(total)
Formand
Information
requirements
Mandatorynotificationformrequiresdetailedinformation.
CompetitionAuthoritymaywaivecompliancewithsome
informationrequirementsinindividualcases
Appeal
HighCourt(aimfordecisionwithin2months)
FurtherappealtotheSupremeCourtonaquestionoflaw
PageA130
Remedies
Bothstructuralandbehaviouralremediesavailable
Language
English
Guidelines
N/03/001Noticeinrespectofthereviewofnonnotifiable
mergersandacquisitions.
Revisedproceduresforthereviewofmergersand
acquisitions(February2006)
MemberofICN
MemberofEU
PageA131
Italy
SubstantiveLaw
Test
Creationorstrengtheningofadominantpositionasaresultof
whichcompetitioniseliminatedorsubstantiallyreducedinthe
Italianmarket
Relevanceof
efficiencies
Efficienciesarenotconsideredaspartofmergerassessment
Legislation
LawNo287of10October1990
PresidentialDecreeNo217of30April1998
Guidelines
None(generalinstructionswithnotificationforms)
Useofmarket
sharesand
concentration
Nopresumptionsoneofthecriteriausedinoverall
assessment.
ResponsibleBody(s) ItalianAntitrustAuthority
Notification
Requirement
MandatoryPreMergernotification
(nonsuspensive,butinpracticepartiesdonotclosewithout
clearance)
Threshold
TurnoverintheItalianmarketbyallfirmsinvolvedishigherthan
461millionortheturnoverintheItalianmarketbythetarget
firmishigherthan46
(updatedannuallyforadjustmentsinGDP)
Jurisdictionalnexus
Localeffectstest
Localthresholdrequirement
Fee
1.2%ofthevalueofthetransactionandbetween3,000and
60,000
Filingdeadline
None
Time(Stage1)
30days
Time(Stage2)
45days
Formand
Information
requirements
Mandatoryformdetailedrequiresconsiderableinformation.
Levelofdetailmaydependonmarketshareoftheparties
Twocopiesrequired
PageA132
Appeal
TARLaziohasexclusiveappellatejurisdictioninrelationto
mergers.FurtherappealpossibletoSupremeAdministrative
Court(CouncilofState)
Eachappealtakes12years
Remedies
Language
Italian
Guidelines
Noticeregardingcertainspecificaspectsrelatedtomerger
control
MemberofICN
MemberofEU
PageA133
Japan
SubstantiveLaw
Test
Substantialrestraintofcompetition
Relevanceof
efficiencies
Guidelineslisteconomicefficiencyasafactortobeconsideredin
thereviewprocess,buttheymustbemergerspecificandnot
capableofbeingachievedbyothermeansandmustenhance
userswelfare.
Legislation
ActonProhibitionofPrivateMonopolisationandMaintenance
ofFairTrade(LawNo54of1947)Chapter4(AntimonopolyAct)
Guidelines
2004GuidelinesontheApplicationoftheAntimonopolyActfor
ReviewingBusinessCombinationsasamendedinMarch2007
Useofmarket
sharesand
concentration
Indicativeconcentrationsafeharbourforhorizontalmergers:
PostHHInotmorethan1,500;postHHIover1,500butnotmore
than2,500andincreaseinHHIisnotmorethan250;postHHI
morethan2,500andincreaseofHHIislessthan150.Guidelines
alsosuggestthatifPostHHIislessthan2,500andcombined
marketshareislessthan35%,thebusinessisunlikelytobe
deemedtosubstantiallyrestraincompetition.
(Priorto2007changestotheGuidelinesmarketshare,rather
thanmarketconcentration,wasusedassafeharbourcriteria)
ResponsibleBody(s) FairTradeCommission
Notification
Requirement
Threshold
Thresholdschangedin2009toreplaceassetbasedthresholds
withturnoverbasedthresholds.
Notificationrequiredwhereallacquiringfirmshavecombined
Japaneseturnoverofover20billion,thetargetfirmshave
combinedJapaneseturnoverofover5billionandcertainvoting
stakethresholdsarecrossed.Differentthresholdsapplyfor
statutorymergersandbusinessassettransfers
Jurisdictionalnexus
Fee
Nofees
Filingdeadline
None
PageA134
Time(Stage1)
30daynonclosureperiodforshareacquisitions(thisreplaced
thepostfilingrequirementin2009)TheFTCmayshortenthis
period.
Priortothe2009amendmentsonlypostfilingwasrequired.
Despitetheabsenceofaformaltimeline,apriorconsultation
timeframehasbeenestablished(itsoperationinlightofthe
2009legislativeamendmentsisnotclear).Partiesmayapplyfor
priorconsultationandtheFTCmustnotifypartieswithin20days
oftheapplicationwhetheradditionalinformationisrequired.
Afteranyinformationrequiredisprovided,thefirststage
consultationbeginsandisconcludedwithin30days.
Time(Stage2)
90daysaftersubmissionofanyadditionalinformation
Formand
Information
requirements
Prescribedformsdoesnotrequireeconomicanalysis
Appeal
PartiesmayappealaformaldecisionoftheFTCtotheTokyo
HighCourt.Decisionsgenerallymadewithinoneyear.
Remedies
Structuralremediespreferred,butbehaviouralremediesare
possible
Language
Japanese
Guidelines
2002PoliciesDealingwithPriorConsultationRegardingBusiness
CombinationPlans(amended28March2007)
MemberofICN
CooperationAgreementswithUS(1999),EU(2003)andCanada(2005)
Comments
1,052posttransactionshareacquisitionreportswerefiledinfiscalyear2007
IntroducedSSNIPtestin2007changestomergerguidelines
PageA135
Korea
SubstantiveLaw
Test
Anticompetitiveeffect(noclearlydefinedtest)
Relevanceof
efficiencies
Whereefficiencyenhancingeffects,difficulttoobtainwithout
themerger,outweighpotentialadverseeffectsofrestricting
competition,themergermaybepermittednotwithstandingits
anticompetitiveeffect.Veryfewcaseshavesucceededin
satisfyingtherequirementsoftheefficiencyexception.
Legislation
MonopolyRegulationandFairTradeAct(MRFTA)1980(as
amended)
Guidelines
GuidelineforReviewM&A(20December2007)
Useofmarket
sharesand
concentration
Anticompetitiveeffectpresumed(rebuttable)where(a)
combinedmarketshareofmergedentityresultsinmonopoly
status(deemedwheremarketshareofsinglecompanyis50%or
moreinrelevantmarket;(b)aggregatemarketshareofthreeor
lesscompaniesis75%ormoreintherelevantmarket(unless
turnoverislessthan4billionwoninrelevantmarket);(c)the
combinedmarketshareofthepostmergercompanyisthe
largestintherelevantmarketand(d)thecombinedmarket
shareofthepostmergercompanyexceedsthatofthecompany
holdingthesecondlargestmarketsharebynotlessthan25%of
combinedmarketshareheldbythecompanies.
Inaddition,mergersinwhichtheHHIisbelow1,200are
presumedtohavenocompetitionlimitingeffectandmayfile
usingashortformreview
ResponsibleBody(s) KoreaFairTradeCommission(KFTC)
Notification
Requirement
Voluntarynotificationalsopossible
Threshold
Oneofthepartieshastotalassetsorannualturnoverof200
billionwonormoreandtheotherhasassetsorannualturnover
of20billionwonormore.
Jurisdictionalnexus
Localnexusrequirementrequiresbothforeignparties,
combinedwithaffiliates,tohaveannualturnoverof20billion
wonormoreinKorea
Fee
None
PageA136
Filingdeadline
Since25June2009partiestolargetransactionsmustfilepre
mergernotificationanytimeaftersigningagreementandbefore
closing(partiesmayrequestreviewpriortosigningagreement)
Time(Stage1)
30days
Time(Stage2)
Noformalstage2,butKFTCmayextendwaitingperiodtoa
maximumof120days(total)
Formand
Information
requirements
Variousformsrequiredtobesubmittedwithsupporting
documents.TheKFTCmaysubsequentlyrequestfurther
information
Appeal
ApplicationforjudicialreviewmaybemadetotheSeoulHigh
Court.
Remedies
Language
Korean
Guidelines
M&ANotificationGuidelines(20August2009)
MemberofICN
PageA137
Luxembourg
SubstantiveLaw
Test
Prevention,restrictionordistortionofcompetition
Nospecificprovisiondealingwithmergers
Relevanceof
efficiencies
N/A
Legislation
LawonCompetitionof17May2004
Guidelines
N/A
Useofmarket
sharesand
concentration
N/A
ResponsibleBody(s) MinistryofEconomics(investigation)
CompetitionCouncil(decisionmaking)
Notification
Requirement
None(nopriorclearanceoptionavailable)
Threshold
N/A
Jurisdictionalnexus
N/A
Fee
N/A
Filingdeadline
N/A
Time(Stage1)
N/A
Time(Stage2)
N/A
Formand
Information
requirements
N/A
Appeal
N/A
Remedies
N/A
Language
N/A
Guidelines
N/A
PageA138

MemberofICN
MemberofEU
PageA139
Mexico
SubstantiveLaw
Test
Reduce,ImpairorPreventcompetition
Relevanceof
efficiencies
FCCmustconsiderpotentialbenefitsandefficienciesthatare
favourabletothecompetitiveprocess,providedtheirconsumer
welfarebenefitsexceedanticompetitiveeffects
Legislation
FederalLawonEconomicCompetition1993
Guidelines
None
Useofmarket
sharesand
concentration
MarketpowerdeterminedbyHHI.Safeharbourexistswhere
HHIincreaseisbelow75pointsorHHIisbelow2,000points.
WhereHHIishigher,burdenofproofshiftstoparties
ResponsibleBody(s) FederalCompetitionCommission
Notification
Requirement
Threshold
BasedonmultiplesofminimumwageinFederalDistrictof
MexicoCity.
Jurisdictionalnexus
Thresholdsassessedonnationalimpactbasis.
Fee
124,849.00MNPesos
Filingdeadline
None(justpriortoclosing)
Time(Stage1)
Fasttrackprocesscompletedwithin15daysformergers
qualifying
Time(Stage2)
Duringfirst15daysFCCmayrequestadditionalinformationto
beprovidedwithin15days.AfterthattimetheFCChas35
businessdaystoissuearuling,extendableby40businessdays.
Formand
Information
requirements
Longandshortformoptionsavailable.Longformcanbe
onerous,includingmarketdataandeconomicreasoning.
Appeal
AdministrativeJusticeTribunal(maytake15years)
Remedies
Language
Spanish(nonessentialdocumentsmaybepermittedinEnglish)
PageA140
MemberofICN
CooperationagreementswithEU(2000),EFTA(2000),US(2000),Canada(2000),Israel
(2000),Chile(2004),Korea(2004),Japan(2006)andNAFTA(1994)
Comments
In2008100transactionswerefiledandallcleared
PageA141
Netherlands
SubstantiveLaw
Test
SignificantimpedimenttoeffectivecompetitionintheDutch
marketoranypartthereof,particularlyasaresultofthe
creationorstrengtheningofadominantposition
Relevanceof
efficiencies
Nospecificattentionhasbeenpaidtoefficienciestodate
Legislation
DutchCompetitionActof22May1997
Guidelines
Seeproceduralguidelines
Useofmarket
sharesand
concentration
Shortformreviewoptionmaybeconsideredifpartiesmarket
sharesinoverlappingmarketsarenotmorethan25%combined
andpartiesmarketsharesarebelow30%onallupand
downstreammarkets
ResponsibleBody(s) NetherlandsCompetitionAuthority
Notification
Requirement
Threshold
Aggregateworldwideturnoverofundertakingsconcernedin
previouscalendaryearexceeds113.45millionandindividual
turnoverinNetherlandsofeachofatleasttwoofthe
undertakingsconcernedwasatleast30million.
Jurisdictionalnexus
Turnoverinthreshold
Fee
15,000fornotificationand30,000forlicence
Filingdeadline
None
Time(Stage1)
Fourweeks(onlyabout25%determinedwithinthisperioddue
tostoptheclockinformationrequests)
Time(Stage2)
13weeks(licencerequest)
Formand
Information
requirements
Specificforminformationaboutpartiesandthetransaction
required(includingmarketresearchreports)alongwith
supportingdocuments
Appeal
DistrictCourtofRotterdam(ChamberofAdministrativeLaw)
FurtherappealtoCourtofAppealforTradeandIndustryinThe
Hague
PageA142
Remedies
Maynowbeofferedduringinvestigationstage.Structural
remediespreferredbutbehaviouralremediesavailable
Language
Dutch
Guidelines
GuidelinesRemedies(21September2007)
BestPracticesinrelationtoMergerCases(15July2004)
MemberofICN
MemberofEU
PageA143
NewZealand
SubstantiveLaw
Test
Substantiallesseningofcompetition
Relevanceof
efficiencies
Economicefficiencyconsiderationsrelevanttoauthorisation.
Efficienciesnotconsideredindetailinclearancedecisions
Legislation
CommerceAct1986
Guidelines
MergersandAcquisitionsGuidelines(January2004)
Useofmarket
sharesand
concentration
SafeHarboursbelowwhichCommissionisunlikelytobe
concernedexistwheremergedentitywouldhaveamarketshare
of40%orless,unlessthereisaconcentratedmarketorthe
marketisaconcentratedmarketpostacquisitionandthe
mergedentitywouldhavenomorethan20%share.
ResponsibleBody(s) CommerceCommission
Notification
Requirement
Voluntary
Formalclearanceorauthorisationpossible
Threshold
N/A
Jurisdictionalnexus
MustbeamarketeffectinNewZealand
Fee
Forclearance:NZ$2,250peracquisition
Forauthorisation:NZ$22,500(partialrefundmaybepossibleif
authorisationgranted)
Filingdeadline
Time(Stage1)
10workingdaysforclearance(extensionsoftensoughtand
guidelinesindicateclearancewithinanaverageof40working
days))
60workingdaysforauthorisation
Time(Stage2)
N/A
Formand
Information
requirements
Prescribedform,relativelydetailed,witheconomicevidence
advisableformorecomplexcases.Authorisationapplications
requireeconomicanalysisofpublicbenefitsanddetriments.
Appeal
HighCourt
CourtofAppeal
SupremeCourt(subjecttoleavebeinggranted)
PageA144
Remedies
TheCommissionmayacceptstructural,butnotbehavioural
undertakingsfromtheparties
Language
English
Guidelines
MergersandAcquisitionsClearanceProcessGuidelines
(November2008)
MemberofICN
FormalcooperationarrangementswithAustralia(ACCC),Canada(CCB),Taiwan(TFTC)
andtheUK(OFT).AseparateCooperationProtocolforMergerReviewexistsbetween
theCommissionandtheACCC
Comments
CommerceCommission(InternationalCooperationandFees)Bill,introducedin
September2008)ifpassed,willfacilitatecooperationbetweentheCommissionandthe
ACCC.
PageA145
Norway
SubstantiveLaw
Test
Creationorstrengtheningofasignificantrestrictionon
competition,contrarytothepurposeoftheAct(thepurposeof
theActistofurthercompetitionandtherebycontributetothe
efficientuseofsocietysresources)
Relevanceof
efficiencies
Consideredwhendeterminingwhethertherestrictionon
competitioniscontrarytothepurposeoftheAct.Where
efficiencygainsoutweighthedisadvantagescausedbyreduced
competition,themergerwillbeapproved.Mergergenerated
efficienciesneednotbepassedontoconsumers,butthe
purposeoftheActdoesrequirethatspecialconsiderationbe
giventotheinterestofconsumers
Legislation
NorwegianCompetitionActof5March2004,chapter4
RegulationontheNotificationofConcentrationsof28April2004
Guidelines
None
Useofmarket
sharesand
concentration
NotificationmustincludedescriptionsofmarketsinNorwayor
partthereofinwhichthepartiesconcernedobtaincombined
marketsharesexceeding20%postmerger.Marketshareisthe
startingpointforanalysis
ResponsibleBody(s) NorwegianCompetitionAuthority
MinistryofGovernmentAdministrationandReform(appeals
fromNCA)
KinginCouncil(government)canrenderdecisionsrelatingto
mergersofmajorsignificance
Notification
Requirement
Threshold
Atleasttwoofthepartiesmusthaveanannualturnoverin
Norwayexceeding20millionkronerandthecombinedannual
turnoverinNorwayofthepartiesmustexceed50millionkroner
Jurisdictionalnexus
TurnoverinNorway.Tobeprohibitedtransactionsmusthave
effectorbelikelytohaveaneffectwithinNorway
Fee
None
Filingdeadline
None
PageA146
Time(Stage1)
15workingdays
Time(Stage2)
25workingdaysfromsubmissionofcompletenotificationtogive
noticethatinterventionmaytakeplace
45moreworkingdaysifnoticeofpossibleinterventionisgiven
toprovideadraftinterventiondecision
15workingdaysforpartiestorespondtodraftdecision
15workingdaysfollowingpartiesresponseforfinaldecision
(maybeextendedby25workingdaysifpartiespropose
remedies)
(partiesmaychoosetoproceedstraighttostage2)
Formand
Information
requirements
Nomandatoryformsbutinformationsuggested
Appeal
MinistryofGovernmentAdministrationandReform
Remedies
Structuralorbehaviouralremediesavailable.
Language
Norwegian,Swedish,DanishorEnglish
Guidelines
GuidelinesoftheNCAonStandardisedNotification
GuidelinesoftheNCAonCompleteNotification
BestPracticesontheConductofMergerControlProceedings
MemberofICN
MemberofEFTANetworkofCompetitionAuthorities
ClosecontactwithotherNordicauthorities
Comments
Lessthan5%ofmergersproceedtostage2
PageA147
Poland
SubstantiveLaw
Test
Significantrestrictionofcompetition(particularlyasaresultof
thecreationorstrengtheningofadominantmarketposition)
Relevanceof
efficiencies
Noefficiencydefence,butevidenceofefficienciesmaybe
acceptedascountervailingexistenceofdominanceorsignificant
impedimentstocompetition
Legislation
ActonCompetitionandConsumerProtectionof16February
2007
RegulationoftheCouncilofMinistersof17July2007onthe
notificationoftheintentiontoconcentrateundertakings
RegulationoftheCouncilofMinistersof17July2007onthe
methodofcalculatingtheturnoverofundertakingssubjectof
concentration
Guidelines
None
Useofmarket
sharesand
concentration
Anundertakingispresumedtohaveadominantpositionifits
marketshareexceeds40%
ResponsibleBody(s) OfficeofCompetitionandConsumerProtection
Notification
Requirement
Threshold
Aggregateturnoverofallparticipatingpartiesintheprevious
financialyearexceeded1billionworldwideor50millionin
Poland(subjecttoademinimisturnoverexemption)
Jurisdictionalnexus
EffectinPolandlocalthresholdrequirement
Fee
5,000zloty
Filingdeadline
None
Time(Stage1)
2months(plusadditionaltimewhereadditionalinformationhas
beenrequested)
Time(Stage2)
N/A
Formand
Information
requirements
OnerousnotificationquestionnaireisasdetailedastheEUs
formCO
PageA148
Appeal
CourtofCompetitionandConsumerProtection(onlawandfact)
CourtofAppeals
SupremeCourt
Timeframeforeachstageisapproximately1year
Remedies
Varietyofremediesavailable,includingdivestiture
Language
Polish
Guidelines
None
MemberofICN
MemberofEU
Comments
In2008,177decisionsweremadeinmergercases.Nonewereprohibitedandtwowere
subjecttoconditionalclearance.
PageA149
Portugal
SubstantiveLaw
Test
Createorreinforceadominantpositioninthenationalmarket
orinasubstantialpartofit,resultinginsignificant
impedimentstoeffectivecompetition
Relevanceof
efficiencies
Noseparatedefenceorspecialconsiderationofefficiencies
Legislation
LawNo18/2003of11June2003
Guidelines
None
Useofmarket
sharesand
concentration
Usedasathresholdmeasure
Notification
Requirement
Threshold
Wheremergercreatesorreinforcesasharegreaterthan30%of
thenationalmarketforaparticulargoodorserviceora
substantialpartofitorintheprecedingfinancialyeartheparties
recordedaturnoverinPortugalexceeding150million,provided
individualturnoverinPortugalofatleasttwopartiesexceeds2
million.
Jurisdictionalnexus
Localturnoverorsharerequirement
Fee
Variabledependingonturnover.Threelevelsoffeeapply:
7,500,15,000and25,000
Filingdeadline
None
Time(Stage1)
Within5daysnoticeoftheproposedmergerispublishedin
nationalnewspapers(attheexpenseofnotifyingparties)
30workingdays(extendable)tocompleteinitialinvestigation
(mayalsobeshortenedunderSimplifiedDecisionProcedure)
Time(Stage2)
90workingdaysfromdateofnotification
Formand
Information
requirements
Specificformrequireddetailedinformationrequired
PageA150
Appeal
DecisionsoftheCompetitionAuthoritymaybeappealedtothe
commercesectionofthecourtintherelevantterritory,subject
tofurtherreviewbytheAppellateCourtofLisbonandfurther,
onmattersoflaw,totheSupremeCourtofJustice.
Remedies
Structuralorbehaviouralremediespossible
Language
Portuguese
Guidelines
Noticeonthetimeframesapplicabletomergercontrol
procedures
Noticeonpossibilityofprenotificationdiscussionsofmerger
transactions
MemberofICN
MemberofEU
Comments
In2008,68mergercaseswereconcludedbytheCompetitionAuthority.
PageA151
SlovakRepublic
SubstantiveLaw
Test
Creationorstrengtheningofadominantpositionresultingin
significantbarrierstoeffectivecompetition
Relevanceof
efficiencies
Althoughcapableofbeingconsideredaspartofthesubstantive
test,verylittleweightisgiventoefficiencieswherepostmerger
marketshareshouldbeveryhigh
Legislation
ActonProtectionofEconomicCompetition
Guidelines
Seeproceduralguidelines
Useofmarket
sharesand
concentration
Nomarketsharesafeharbours,butamarketshareof40%
providesaninformalindicationofapositionofmarket
dominance
ResponsibleBody(s) AntimonopolyOffice(AMO)
Notification
Requirement
Threshold
Combinedglobalturnoverofthepartiesisatleast46millionfor
theclosedaccountingperiodprecedingthemergerandatleast
twoofthepartieshaveaturnoverofatleast14millioneachin
Slovakiaforthatperiod;or
Atleastoneofthepartiestothemergerhasatotalturnoverof
atleast19millioninSlovakiafortheclosedaccountingperiod
precedingthemergerandatleastoneotherpartyhasatotal
globalturnoverofatleast46millionforthatperiod
Jurisdictionalnexus
EffectinSlovakiafornotificationpurposesitisbasedonlocal
turnoverrequirements
Fee
3,319
Filingdeadline
None
Time(Stage1)
60workingdaysfromcompletenotification
Time(Stage2)
90workingdays(timesuspendedwherepartieswishtopropose
remedies)
Formand
Information
requirements
Detailedinformationisrequirednospecificform.Insome
casespartiesmayapplytoreducetheamountofinformation
required
PageA152
Appeal
CounciloftheAMO
(decisionwithin6months;maybeextendedto24)
CountyCourtofBratislava
SupremeCourt
Remedies
Behaviouralremediesrarelyaccepted.Structuralremedies
preferred.
Language
Slovak
Guidelines
Noticeondetailsofthenotification
Noticeonmethodofcalculationofturnover
Guidelinesonidentificationofthepartiestotheconcentration
Guidelinesonproposalofcommitments
Guidelinesontheancillaryrestraints
MemberofICN
MemberofEU
Comments
ChangesweremadetotheAct,effectivefrom1June2009,followingtheintroductionof
theEurointoSlovakia.
PageA153
Spain
SubstantiveLaw
Test
Preventionofthemaintenanceofeffectivecompetitionin
wholeorinpartofthenationalmarket
Relevanceof
efficiencies
Anumberoffactorsmaybeconsideredwhendeterminingifthe
substantivetesthasbeensatisfied,includingefficiencies.Any
claimedefficienciesmustbemergerspecific,substantial,of
directbenefittoconsumers,timelyandverifiable.
IftheMinisterintervenesonpublicinterestgrounds,certain
efficiencies(particularlydynamicefficiencies)maybeconsidered
further
Legislation
Law15/2007ontheDefenceofCompetition
Guidelines
None
Useofmarket
sharesand
concentration
Relevantforoneofthealternativethresholdtestsfor
notification.
ResponsibleBody(s) NationalCompetitionCommission(CNC)
InvestigationsDirectorate(forinvestigations
TheCouncil(decisionmakingbody)
Notification
Requirement
Threshold
Shareof30%ormoreofthenationalmarketoradefined
geographicmarketwithinitisacquiredorincreased;or
AggregateturnoverinSpainofthepartiesinvolvedexceeded
240millionduringpastfinancialyearandturnoverinSpainof
eachofatleasttwopartiesexceeded60million
Jurisdictionalnexus
Marketshareorturnoverthresholdtests(noseparateeffects
test)
Fee
Rangesdependingonsizeoftransaction;3,000,6,000,
12,000or24,000.Wherefilingmadeunderabbreviatedform
feeis1,530
Filingdeadline
None
Time(Stage1)
1month
Time(Stage2)
2months(extendableby15workingdayswherepartiessubmit
commitments)
PageA154
Formand
Information
requirements
Appeal
Officialformisrequired.Informationsimilartothatrequiredby
theEUsformC)
Abbreviatedformisavailableforstraightforwardcases,butnot
wherethereishorizontaloverlapbetweentheactivitiesofthe
parties.
AudienciaNacional
SpanishSupremeCourt(takesbetween24years)
Remedies
Divestitureorotherappropriatecommitmentstorestore
competitionareavailable.
Language
Spanish
Guidelines
None
MemberofICN
MemberofEU
Comments
MinisterofEconomymayintervenewhereCNCmakesadecisiontoprohibitthe
transactionorclearitsubjecttoconditions.IftheMinisterintervenesthedecisionmust
bebasedonpublicinterestcriteriadifferentfromcompetitioncriteria,including
promotionoftechnicalresearchanddevelopment.
PageA155
Sweden
SubstantiveLaw
Test
SignificantimpedimenttoeffectivecompetitioninSwedenora
substantialpartthereof,particularlyasaresultofthecreation
orstrengtheningofadominantposition
Relevanceof
efficiencies
Notnormallytakenintoconsiderationbutmorefocuson
efficienciesanticipatedinthefuture(followingadoptionofnew
substantivetestin2008)
Legislation
SwedishCompetitionAct(1November2008)
Guidelines
None
Useofmarket
sharesand
concentration
Oneofanumberoffactorstobeconsidered
ResponsibleBody(s) CompetitionAuthority(administration)
StockholmDistrictCourt(powertomakeorders/prohibitions)
Notification
Requirement
Threshold
CombinedturnoverinSwedenofmorethan1billionkronaand
eachofatleasttwopartieshasaturnoverinSwedenexceeding
200millionkrona
Jurisdictionalnexus
Localturnoverthreshold
Fee
None
Filingdeadline
None
Time(Stage1)
25workingdays(increasedto35workingdaysifcommitments
offered)
Time(Stage2)
3months(todecidewhethertolodgeapplicationwiththe
Court)
Formand
Information
requirements
Specificformrequired.InformationrequiredissimilartoEUs
formCO.Authoritymaywaivetherequirementforcertain
informationinindividualcases.
Appeal
StockholmDistrictCourt(6monthstodecide)
MarketCourt(within3months)
PageA156
Remedies
Structuralandbehaviouralavailablebutstructuralremediesare
preferred
Language
Swedish
Guidelines
RefertoEuropeanCommissionNotices
MemberofICN
MemberofEU
AgreementwithDenmark,NorwayonIceland
Comments
Mergermaynotbeprohibitedifdoingsowouldsetasideessentialnationalinterestsof
securityorresources
PageA157
Switzerland
SubstantiveLaw
Test
Creationorstrengtheningofadominantpositioneliminating
effectivecompetitionintherelevantmarket(unless
competitionisenhancedinanothermarketandthatoutweighs
thedetrimentcausedbythecreationorstrengtheningofa
dominantpositionintherelevantmarket)
Relevanceof
efficiencies
Considered,particularlywhereconsumerslikelytobenefitfrom
them.Efficienciesinonemarketmayoutweightheproblems
causedbythemergerinanothermarket
Legislation
FederalLawonCartelsandOtherRestrictionsofCompetition
MergerControlRegulation
Guidelines
None
Useofmarket
sharesand
concentration
Nosafeharbours
ResponsibleBody(s) CompetitionCommission(Comco)
Notification
Requirement
Threshold
Inpreviousbusinessyearpartiesmusthavehadanaggregate
turnoverofatleast2billionSwissfrancsworldwideoran
aggregateturnoverinSwitzerlandofatleast500millionSwiss
francsandatleasttwoofthepartiesinvolvedmusthave
reportedindividualturnoversinSwitzerlandofatleast100
millionSwissfrancs.
Jurisdictionalnexus
Effectsdoctrinefornotificationbasedonthresholdtest
Fee
PhaseI5,000Swissfrancs
PhaseIIhourlyrateofbetween100to400Swissfrancs
Filingdeadline
None
Time(Stage1)
1month
Time(Stage2)
4months
Formand
Information
requirements
Standardnotificationformmustbeuseddetailedinformation,
includingmarketinformation,required
PageA158
Appeal
FederalAdministrativeCourt
FederalSupremeCourt
Remedies
Structuralorbehaviouralremediesavailable
Language
OfficialSwisslanguage(German,French,Italian,Romansh)
Guidelines
None
MemberofICN
Noformalcooperationagreements
Comments
Amendmentsanticipatedfor2010proposaltomovetoSIECtestorSLCtest,tolower
thresholdsandtoenterintobilateralagreementswiththeEU.Itisalsosuggestedthat
theCommissionbegiventherighttoinvestigatemergersnotmeetingturnover
thresholds.
PageA159
Turkey
SubstantiveLaw
Test
Createsorstrengthensadominantpositionandsignificantly
impedeseffectivecompetitioninarelevantproductmarket
withinthewholeorpartofTurkey
Relevanceof
efficiencies
Canbeconsideredbutdonotappeartohavebeenconsideredin
asubstantialwaytodate
Legislation
LawonProtectionofCompetitionNo4054(13December1994)
CommuniquNo1997/1onMergersandAcquisitionsRequiring
theApprovaloftheCompetitionBoard
Guidelines
GuidelinesontheDefinitionofRelevantMarket
Useofmarket
sharesand
concentration
Usedforjurisdictionalthresholds.Forpurposesofassessing
whetheramergedentitywouldholdadominantposition,
marketsharesofaround40percentormoreareconsidered
ResponsibleBody(s) TurkishCompetitionAuthority
CompetitionBoard
Notification
Requirement
Threshold
Aggregatemarketsharesexceed25%intherelevantmarketin
Turkeyortotalturnoverexceeds25millionlirawithinthewhole
orapartofTurkeyintherelevantproductmarket
Jurisdictionalnexus
Effectstest
Fee
None
Filingdeadline
Atleast30daysandpreferably45daysbeforeclosing
Time(Stage1)
30days
Time(Stage2)
6months(maybeextendedforanadditional6months)
Formand
Information
requirements
Specificformandadditionaldocuments,including,ifavailable,
marketresearchreports,arerequiredtobefiled.Detailed
answersrequiredtoavoidsubsequentrequestforincomplete
informationwhichwillrestarttheclock
Threecopiesrequired
Appeal
CouncilofState
Remedies
PageA160
Language
Turkish
Guidelines
GuidelinesontheVoluntaryNotificationofAgreements,
ConcertedPracticesandDecisionsofAssociationsof
Undertakings
MemberofICN
AgreementwithEUrelatingtonotificationandrequestsforaction
Comments
In2008,175transactionswerecleared,22clearedwithconditionsand57felloutside
thethresholds;69wereforeigntoforeigntransactions.
Therearecurrentproposalstochangethelegislation.
PageA161
UnitedKingdom
SubstantiveLaw
Test
SubstantiallesseningofcompetitionintheUK
Relevanceof
efficiencies
ConsideredaspartofcompetitiontestOFTmayconsider
mergerspecificefficiencygainswheretheywouldhavea
positiveeffectonmarketrivalrysothatnoSLCwouldresultor
theymaybeconsideredeveniftheydonotalleviateSLCifthey
wouldbepassedontoconsumers.
Legislation
EnterpriseAct2002
Guidelines
CC3MarketInvestigationReferences:CompetitionCommission
Guidelines(June2003)
Useofmarket
sharesand
concentration
Factorstoconsiderwhendeterminingcompetitiveeffects,but
nopresumptionsraised
ResponsibleBody(s) OfficeofFairTrading(OFT)
CompetitionCommission(CC
SecretaryofStateforBusiness,InnovationandSkills
(forlimitedcasesraisingdefinedpublicinterests)
Notification
Requirement
Voluntary
Threshold
Shareofsupplyorturnoverthresholdtestsapply:
Shareofsupplymergercreatesorenhancesa25%shareof
supplyorpurchasesofanygoodsorservicesintheUKora
substantialpartofit(thisisnotamarketsharetestandneednot
involveeconomicmarkets)
Turnoverwhereturnoveroftargetfirmexceeds70millionin
theUK
Jurisdictionalnexus
AtleastoneofthepartiesmustbeactiveintheUK
Fee
Rangefrom15,000to45,000withsomeexemptionsforsmall
andmediumsizedfirms
Filingdeadline
None
Time(Stage1)
20workingdays(wheremergernoticefiled)whichmaybe
extendedby10workingdays
Informalsubmissionsnormallydecidedwithin40workingdays
PageA162
Time(Stage2)
WhenmergerreferredbyOFTtotheCC,CCmustreportwithin
24weeks,extendablebyeightweeks
Formand
Information
requirements
Partiescanuseproformanoticeofinformalsubmission
Whereproformanoticeisusedtheamountofinformation
requiredissimilartothatrequiredbytheEUformCO
Similarinformationshouldbesuppliedforinformalsubmissions
Appeal
CompetitionAppealTribunal
CourtofAppeal
Remedies
Structuralremediesgenerallyconsideredmoreappropriatebut
behaviouralremediesmaybeusedinsomecases
Language
English
Guidelines
CC2MergerReferences:CompetitionCommissionGuidelines
(June2003)
CC7Chairman'sGuidanceonDisclosureofInformationin
MergerandMarketInquiries(July2003)
CC8MergerRemedies:CompetitionCommissionGuidelines
(November2008)
MarketDefinition(OFT403,December2004)
MergersJurisdictionalandProceduralGuidance(OFT527,June
2009)
MemberofICN
MemberofEU
Comments
OFTrefersmatterstoCCwheneveritbelievesthemergerwouldresultinanSLC
112mergersconsideredbetween1April2007and31March2008;10referencesmade
toCC.SLCfoundin7casesbutallresolvedthroughundertakings.
PageA163
UnitedStatesofAmerica
SubstantiveLaw
Test
Substantiallesseningofcompetitionortendtocreatea
monopoly
Relevanceof
efficiencies
Mergerspecificefficienciesconsidered.Theymustbe
substantiated.Reductionsinproductioncostsarelikelytobe
reviewedmorefavourablythanefficienciesrelatingto
procurement,managementorcapitalcosts(thismaychange
withtheproposednewmergerguidelines)
Legislation
ClaytonAct1914,s7
HartScottRodinoAntitrustImprovementsAct1976
Guidelines
DepartmentofJusticeandFederalTradeCommission,Horizontal
MergerGuidelines(issued1992;revised8April1997)
DepartmentofJusticeandFederalTradeCommission,
CommentaryontheHorizontalMergerGuidelines(2006)
DepartmentofJustice,NonHorizontalMergerGuidelines(14
June1984)
FederalTradeCommissionandUSDepartmentofJustice,
AntitrustGuidelinesforCollaborationsAmongCompetitors(April
2000)
Useofmarket
sharesand
concentration
HHIusedtocalculateconcentrationandasanearlyguideto
assessingthepotentialforthemergertoSLC
ResponsibleBody(s) FederalTradeCommission
DepartmentofJustice(AntitrustDivision)
Notification
Requirement
Novoluntaryoption
Threshold
Commercetest,sizeoftransactionandsizeofpartiestestsmust
besatisfied
Commercetesteithertheacquiringoracquiredpartymustbe
engagedinUScommerceoractivityaffectingUScommerce
Sizeoftransactiontestmergermustresultinacquiringperson
holdingassetsorvotingsecuritieshavinganaggregatetotal
valueexceedingUS$63.4m
PageA164
Sizeofpartiestestonepartymusthaveworldwidesalesor
assetsofUS$12.7millionandtheothermusthaveworldwide
salesorassetsofUS$126.9millionormore(thisisnotrequired
wheresizeoftransactionexceeds$253.7m)
Exemptionssomeexemptionsalsoapply
Jurisdictionalnexus
Effectsdoctrineappliesthresholdproxiesused
Fee
Variabledependingonsize:US$45,000,US$125,000and
US$280,000
Filingdeadline
None
Time(Stage1)
30days(earlyterminationavailable)
Time(Stage2)
30days(aftercompliancewithsecondrequest)
Formand
Information
requirements
NotificationandReportFormforinitialfilingrequiresbasic
information,includingallstudies,surveys,analysisandreports
preparedwithrespecttotheproposedmerger.UnliketheEU
formCO,nodiscussionofrelevantmarketsorcompetitive
conditionsisrequired.Electronicsubmissionsarepermitted
Wherestage2initiatedandsecondrequestmade,the
informationrequiredisveryonerousandalldocumentsmustbe
translatedintoEnglish.Oraldepositionsarealsoavailabletothe
agencies.
Appeal
Agencymayapplytodistrictcourttoblockamerger(including
throughpreliminaryinjunction)
CourtofAppealsinrelevantCircuit
SupremeCourt(rare)
Remedies
Structuralremediesmostcommon.Behaviouralremedies
availablebutuncommon.
Language
English
Guidelines
DOJandFTC,AntitrustEnforcementGuidelinesforInternational
OperationsIssuedbytheUSDepartmentofJusticeandthe
FederalTradeCommission(1995)
MemberofICN
CooperationagreementswithAustralia,Brazil,Canada,Germany,Israel,Japan,Mexico
andtheEU.
Comments
MergerGuidelinesarecurrentlybeingreviewedandarelikelytobereplacedin2010
PageA165
EuropeanUnion
SubstantiveLaw
Test
SignificantImpedimenttoEffectiveCompetition(SIEC)inthe
EuropeanUnionmarketorasubstantialpartofit,inparticular
asaresultofthecreationorstrengtheningofadominant
position
Relevanceof
efficiencies
Relevantifdirectlybeneficialtoconsumers,mergerspecific,
substantial,timelyandverifiable.Theextenttowhichtheymay
beusedtocounterbalancepotentialanticompetitiveeffects
remainsuncertain
Legislation
CouncilRegulation(EC)139/2004(EUMR)
Guidelines
GuidelinesontheAssessmentofHorizontalMergers2004
GuidelinesontheAssessmentofNonHorizontalMergers2008
Useofmarket
sharesand
concentration
Usedasausefulfirstindicatorofmarketstructureandthe
competitiveimportanceofthemergingparties.Wherepost
mergerfirmwouldholdlessthan25%orpostmergerHHIis
below1000themergerisunlikelytoraiseconcerns.
ResponsibleBody(s) DirectorateGeneralforCompetitionoftheEuropean
Commission(DGComp)
FullCollegeofCommissionsresponsibleforfinaldecision
Notification
Requirement
Threshold
Aggregateworldwideturnoverofallpartiesexceeds5billion
andEuropeanUnionwideturnoverofeachofatleasttwo
partiesexceeds250million,unlesseachofthepartiesachieves
morethantwothirdsofaggregateEuropeanUnionwide
turnoverinasingleMemberStateor
Aggregateworldwideturnoverexceeds2.5billion,the
EuropeanUnionwideturnoverofeachofatleasttwoparties
exceeds100andinatleastthreememberstatestheaggregate
turnoverofallthepartiesexceeds100andineachofthose
threememberstatestheturnoverofeachofatleasttwoparties
exceeds25millionunlesseachofthepartiesachievesmore
thantwothirdsofitsaggregateEuropeanUnionwideturnover
inasingleMemberState
Jurisdictionalnexus
EuropeanUniondimension,determinedbythresholds
Fee
Nofee
Filingdeadline
None
PageA166
Time(Stage1)
25workingdays(extendableby10dayswhencommitments
offered)
Time(Stage2)
90workingdays(extendableto105ifremediesofferedafter55th
day)
Afurtherextensionof20daysmaybepossible.
Rejectionofnotificationforincompletenessorrequestsformore
detailedinformationwhichmaystoptheclock,canresultinthe
reviewperiodlastingmanymonthslongerthanthis.
Formand
Information
requirements
FormCOor,shortformCO
FormCOisonerousconsiderablemarketinformationis
required.Waiversmaybegrantedinrespectofsome
information
(oneoriginal,fivecopiesand32copiesonCDorDVDRommust
besubmitted)
ShortformCOrequireslessinformationandlesssupporting
documents
Appeal
AppealtoGeneralCourt(previouslyCourtofFirstInstance)
Averagetimeframeis30monthsbutitmaytakemanyyears
FurtherappealtotheCourtofJustice(previouslyEuropeanCourt
ofJustice)
Normallytakesmorethantwoyears
Interestedthirdpartiesmayappeal,includingMemberStates
Remedies
Strongpreferenceforstructuralremedies,butbehavioural
undertakingsmaybeacceptedinlimitedcases
Language
AnyofficialEUlanguage
Guidelines
ConsolidatedJurisdictionalNotice2007
BestPracticesontheConductofMergerProceedings2004
NoticeonMergerRemedies2008
BestPracticeGuidelinesforDivestitureCommitments2003
MemberofICN
US/ECAgreementontheApplicationofCompetitionLaws1991
EC/CanadaCooperationAgreement(June1999)
EC/JapanCooperationAgreement(August2003)
Comments
Supranationalregulatorforthe27EUMemberStateswherethejurisdictionalnexusis
satisfied.
PageA167
PageA168
Appendix2
ICNRecommendations1
WorkingGroupCommentaryhasbeenremovedfromtheRecommendations
PageA21
ICN RECOMMENDED PRACTICES FOR MERGER NOTIFICATION

PROCEDURES
I.
II.
III.
IV.
V.
Nexustoreviewingjurisdiction;(2002)
A. Jurisdictionshouldbeassertedonlyoverthosetransactionsthathavean
appropriatenexuswiththejurisdictionconcerned
B. Mergernotificationthresholdsshouldincorporateappropriatestandardsof
materialityastotheleveloflocalnexusrequiredformergernotification
C. Determinationofatransactionsnexustothejurisdictionshouldbebasedon
activitywithinthatjurisdiction,asmeasuredbyreferencetotheactivitiesofat
leasttwopartiestothetransactioninthelocalterritoryand/orbyreferenceto
theactivitiesoftheacquiredbusinessinthelocalterritory
Notificationthresholds;(2002)
A. Notificationthresholdsshouldbeclearandunderstandable
B. Notificationthresholdsshouldbebasedonobjectivelyquantifiablecriteria
C. Notificationthresholdsshouldbebasedoninformationthatisreadily
accessibletothemergingparties
Timingofnotification;(2002)
A. Partiesshouldbepermittedtonotifyproposedmergersuponcertificationofa
goodfaithintenttoconsummatetheproposedtransaction
B. Jurisdictionsthatprohibitclosingwhilethecompetitionagencyreviewsthe
transactionorforaspecifiedtimeperiodfollowingnotificationshouldnot
imposedeadlinesforpremergernotification
C. Jurisdictionsthatdonotprohibitclosingpendingreviewbythecompetition
agencyshouldneverthelessallowpartiesareasonabletimeinwhichtofile
notificationfollowingaclearlydefinedtriggeringevent
Reviewperiods;(2003)
A. Mergerreviewsshouldbecompletedwithinareasonableperiodoftime
B. Mergerreviewsystemsshouldincorporateproceduresthatprovidefor
expeditedreviewandclearanceofnotifiedtransactionsthatdonotraise
materialcompetitiveconcerns
C. Insuspensivejurisdictions,initialwaitingperiodsshouldexpirewithina
specifiedperiodfollowingnotificationandanyextendedwaitingperiodsshould
expirewithinadeterminabletimeframe
D. Innonsuspensivejurisdictions,initialmergerreviewsshouldbecompleted
withinaspecifiedperiodfollowingnotificationandanyextendedreviews
shouldbecompletedwithinadeterminabletimeframe
E. Jurisdictionsshouldadoptappropriatelytailoredprocedurestoaccommodate
particularcircumstancesassociatedwithnonconsensualtransactionsandsales
inbankruptcy
Requirementsforinitialnotification;(2003)
A. Initialnotificationrequirementsshouldbelimitedtotheinformationneededto
verifythatthetransactionexceedsjurisdictionalthresholds,todetermine
whetherthetransactionraisescompetitiveissuesmeritingfurther
investigation,andtotakestepsnecessarytoterminatethereviewof
transactionsthatdonotmeritfurtherinvestigation.
B. Initialnotificationrequirementsand/orpracticesshouldbeimplementedsoas
toavoidimposingunnecessaryburdensonpartiestotransactionsthatdonot
presentmaterialcompetitiveconcerns.
PageA22
C.
VI.
VII.
VIII.
IX.
Competitionagenciesshouldprovideforthepossibilityofprenotification
guidancetopartiesonthenotifiabilityofthetransactionandthecontentofthe
intendednotification.
D. Jurisdictionsshouldlimittranslationrequirementsandformalauthentication
burdens
Conductofmergerinvestigations;(2004)
A. Mergerinvestigationsshouldbeconductedinamannerthatpromotesan
effective,efficient,transparentandpredictablemergerreviewprocess.
B. Mergerinvestigationproceduresshouldincludeopportunitiesformeetingsor
discussionsbetweenthecompetitionagencyandthemergingpartiesatkey
pointsintheinvestigation
C. Mergingpartiesshouldbeadvisednotlaterthanthebeginningofasecond
stageinquirywhythecompetitionagencydidnotclearthetransactionwithin
theinitialreviewperiod.
D. Whereinvestigationperiodsarenotsubjecttodefinitivedeadlines,procedures
shouldbeadoptedtoensurethattheinvestigationiscompletedwithoutundue
delay
E. Competitionagenciesshouldseektoavoidimposingunnecessaryor
unreasonablecostsandburdensonmergingpartiesandthirdpartiesin
connectionwithmergerinvestigations
F. Mergerinvestigationsshouldbeconductedwithdueregardforapplicablelegal
privilegesandrelatedconfidentialitydoctrines
ProceduralFairness;(2004)
A. Proceduralfairnessshouldbeaffordedtomergingpartiesandthirdpartieswith
alegitimateinterestinthemergerunderreview
B. Priortoafinaladverseenforcementdecisiononthemerits,mergingparties
shouldbeprovidedwithsufficientandtimelyinformationonthefactsandthe
competitiveconcernsthatformthebasisfortheproposedadversedecision
andshouldhaveameaningfulopportunitytorespondtosuchconcerns
C. Thirdpartiesshouldbeallowedtoexpresstheirviewsduringthemergerreview
process
D. Thecompetitionagencyshouldmanagethemergerreviewprocesstoensure
thattheprocessisimplementedfairly,efficiently,andconsistently
E. Mergerreviewsystemsshouldprovideanopportunityfortimelyreviewbya
separateadjudicativebodyofacompetitionagencysfinaladversedecisionon
themeritsofamerge
Transparency;(originallyVI2003)
A. Mergercontrollawsshouldbeappliedwithahighleveloftransparency,
subjecttotheappropriateprotectionofconfidentialinformation
B. Mergercontrolregimesshouldbetransparentwithrespectto,ataminimum,
thejurisdictionalscopeofthemergercontrollaw,thecompetitionagencys
decisionmakingprocedures,andtheprinciplesandcriteriathecompetition
agencyusestoapplythesubstantivereviewstandard
C. Competitionagenciesshouldpromotetransparencybymakinginformation
aboutthecurrentstateofmergercontrollaw,policy,andpracticereadily
availabletothepublic
Confidentiality;(2004)
A. Businesssecretsandotherconfidentialinformationreceivedfrommerging
partiesandthirdpartiesinconnectionwiththemergerreviewprocessshould
besubjecttoappropriateconfidentialityprotections
PageA23
X.
XI.
XII.
XIII.
B. Competitionagenciesshouldpromotetransparencyoftheconfidentialitylaws,
policies,andpracticesapplicabletotheirmergercontrolprocedures
C. Competitionagenciesshouldseektodefercontactswiththirdpartiesuntilthe
proposedtransactionbecomespublicwheresuchdeferralwouldnotadversely
affectthereviewingagencysabilitytoconductitsinvestigationeffectivelyor
completeitsreviewwithinapplicabledeadlines
D. Confidentialityrulesshouldstrikeanappropriatebalancebetweenprotecting
theconfidentialityofthirdpartysubmissionsandproceduralfairness
considerations
E. Competitionagenciesshouldavoidunnecessarypublicdisclosureof
confidentialinformationinpublicannouncements,courtoradministrative
proceedings,decisions,andothercommunicationsrespectingapending
transaction
InteragencyCoordination;(2004)
A. Competitionagenciesshouldseektocoordinatetheirreviewofmergersthat
mayraisecompetitiveissuesofcommonconcern
B. Interagencycoordinationshouldbeconductedinaccordancewithapplicable
lawsandotherlegalinstrumentsanddoctrines
C. Interagencycoordinationshouldbetailoredtotheparticulartransactionunder
reviewandtheneedsofthecompetitionagenciesconductingthemerger
investigations
D. Competitionagenciesshouldencourageandfacilitatethemergingparties
cooperationinthemergercoordinationprocess
E. Reviewingagenciesshouldseekremediestailoredtocuredomesticcompetitive
concernsandendeavortoavoidinconsistencywithremediesinotherreviewing
jurisdictions
Remedies;(2005)
A. Aremedyshouldaddresstheidentifiedcompetitiveharmarisingfromthe
proposedtransaction
B. Themergerreviewsystemshouldprovideatransparentframeworkforthe
proposal,discussion,andadoptionofremedies
C. Proceduresandpracticesshouldbeestablishedtoensurethatremediesare
effectiveandeasilyadministrable
D. Appropriatemeansshouldbeprovidedtoensureimplementation,monitoring
ofcompliance,andenforcementoftheremedy
CompetitionAgencyPowers;(2005)
A. Competitionagenciesshouldhavetheauthorityandtoolsnecessaryfor
effectiveenforcementofapplicablemergerreviewlaws
B. Competitionagenciesshouldhavesufficientstaffingandexpertisetodischarge
theirenforcementresponsibilitieseffectively
C. Competitionagenciesshouldhavesufficientindependencetoensurethe
objectiveapplicationandenforcementofmergerreviewlaws
Reviewofmergercontrolprovisions.
(2003originallyVII,thenXI(2004)thenXIII(2005))
A. Jurisdictionsshouldperiodicallyreviewtheirmergercontrolprovisionstoseek
continualimprovementinthemergerreviewprocess
B. Jurisdictionsshouldconsiderreformstotheirmergercontrollawsand
proceduresthatpromoteconvergencetowardsrecognizedbestpractices
PageA24
ICN RECOMMENDED PRACTICES FOR MERGER ANALYSIS

I.
II.
III.
IV.
V.
TheLegalFrameworkforCompetitionMergerAnalysis(2008)
A. Thepurposeofcompetitionlawmergeranalysisistoidentifyandpreventor
remedyonlythosemergersthatarelikelytoharmcompetitionsignificantly
B. Ajurisdictionsmergerreviewlawandpolicyshouldprovideacomprehensive
frameworkforeffectivelyaddressingmergersthatarelikelytoharm
competitionsignificantly
C. Anagencysmergeranalysisshouldbecomprehensiveinitsassessmentof
factorsaffectingthedeterminationofwhetheramergerislikelytoharm
UseofMarketShares:Thresholds&Presumptions(2008)
A. Marketsharesandmeasuresofmarketconcentrationplayanimportantrolein
mergeranalysisbutarenotdeterminativeofpossiblecompetitionconcerns.
Agenciesshouldgivecarefulconsiderationtomarketdefinitionandthe
calculationofmarketsharesandmarketconcentration
B. Marketsharesandmeasuresofmarketconcentrationcanprovideusefulinitial
guidancetohelpidentifymergersthatmayraisecompetitiveconcerns
requiringfurtheranalysis
C. Highmarketconcentrationandsignificantincreasesinmarketsharesbrought
aboutbyamergerareuseful,butgenerallyarenotconclusiveindicatorsthata
mergerislikelytoharmcompetitionsignificantly.Jurisdictionsthatusemarket
concentrationand/ormarketsharestopresumecompetitiveharmshould
ensurethatanysuchpresumptionmaybeovercomeorconfirmedbyadetailed
reviewofmarketconditions
Entry&Expansion(2008)
A. Theassessmentoffirmentryand/orexpansionbyexistingcompetitorsshould
beanintegralpartoftheanalysisofwhetheramergerislikelytoharm
competitionsignificantly(e.g.,themergedfirmcouldraisepricesorreduce
output,quality,orinnovation).
B. Inassessingwhetherentryand/orexpansionwouldeffectivelyconstrainthe
mergedentity,competitionagenciesshouldconsiderwhetherentryand/or
expansionwouldbe:(a)likely;(b)timely;and,(c)sufficientinnature,scaleand
scope
CompetitiveEffectsAnalysisinHorizontalMergerReview:Overview(2009)
A. Thegoalofcompetitiveeffectsanalysisinthereviewofhorizontalmergersisto
assesswhetheramergerislikelytoharmcompetitionsignificantlybycreating
orenhancingthemergedfirmsabilityorincentivestoexercisemarketpower,
eitherunilaterallyorincoordinationwithrivals
B. Inconductingcompetitiveeffectsanalysis,agenciesshouldconsiderwhethera
mergerlikelywillresultinanticompetitiveunilateralorcoordinatedeffects.
Thesetwotheoriesofcompetitiveharmprovidetheanalyticalframeworksfor
determiningwhetherahorizontalmergermaybeexpectedtoharm
C. Theanalysisofcompetitiveeffectsundereithertheunilateralorcoordinated
effectsframeworkshouldbeclearlygroundedinbothsoundeconomicsandthe
factsoftheparticularcase
UnilateralEffects(2009)
A. Inanalyzingthepotentialforahorizontalmergertoresultinanticompetitive
unilateraleffects,agenciesshouldassesswhetherthemergerislikelytoharm
PageA25
VI.
competitionsignificantlybycreatingorenhancingthemergedfirmsabilityor
incentivestoexercisemarketpowerindependently
B. Inconductingunilateraleffectsanalysis,agenciesshouldapplytheeconomic
theoryormodelthatbestfitsthecharacteristicsofthemarket(s)atissue
C. Inconductingunilateraleffectsanalysis,agenciesshouldassessthecompetitive
constraintsandotherfactorsrelevanttotheabilityofthemergedfirmto
exercisemarketpowerintherelevantmarket(s)
CoordinatedEffects(2009)
A. Inanalyzingthepotentialforahorizontalmergertoresultincoordinated
effects,agenciesshouldassesswhetherthemergerincreasesthelikelihood
thatfirmsinthemarketwillsuccessfullycoordinatetheirbehaviouror
strengthenexistingcoordinationinamannerthatharmscompetition
significantly.
B. Inconductingcoordinatedeffectsanalysis,agenciesshouldassesswhetherthe
conditionsthataregenerallynecessaryforsuccessfulcoordinationarepresent:
(a)theabilitytoidentifytermsofcoordination,(b)theabilitytodetect
deviationsfromthetermsofcoordination,and(c)theabilitytopunish
deviationsthatwouldunderminethecoordinatedinteraction
C. Inconductingcoordinatedeffectsanalysis,agenciesshouldassesstheextentto
whichexistingcompetitiveconstraintsandotherfactorswouldlikelydeteror
disrupteffectivecoordination.Inmakingthisassessment,agenciesshould
considerallavailableevidence,includingthepremergermarketconditionsthat
mayconstrainorfacilitatesuccessfulcoordination,andtheimpactofthe
mergerontheseconditions
PageA26
Bibliography
Table of Contents
B1
Articles,Books,Reportsandspeeches ......................................................................3
B1.1 Articles ............................................................................................................ 3
B1.2 Books ............................................................................................................ 30
B1.3 Bookchapters ................................................................................................ 37
B1.4 Looseleafservices ........................................................................................... 42
B1.5 Conferencepapersandspeeches ..................................................................... 43
B1.6 Reportsandworkingpapers ............................................................................ 54
B1.7 Newspaperandmagazinearticles .................................................................... 60
B2
Cases...................................................................................................................64
B3
Legislation ...........................................................................................................67
Australia.................................................................................................................. 67
Austria .................................................................................................................... 67
Belgium ................................................................................................................... 67
Canada .................................................................................................................... 67
China ..................................................................................................................... 68
CzechRepublic......................................................................................................... 68
Denmark ................................................................................................................. 68
EuropeanUnion ....................................................................................................... 68
Finland .................................................................................................................... 68
Germany ................................................................................................................. 68
India ..................................................................................................................... 69
NewZealand............................................................................................................ 69
Poland .................................................................................................................... 69
Switzerland ............................................................................................................. 69
UnitedKingdom ....................................................................................................... 69
UnitedStates ........................................................................................................... 69
B4
Treaties,Agreements,Recommendationsandbestpractices ...................................70
B4.1 Treatiesandagreements ................................................................................. 70
B4.2 RecommendationsandBestPractices .............................................................. 72
PageB1
B5
OtherReferences................................................................................................. 73
B5.1Governmentandofficialdocuments ................................................................... 73
Australia ........................................................................................................... 73
EuropeanUnion ................................................................................................ 73
UnitedKingdom ................................................................................................ 73
UnitedStates .................................................................................................... 74
B5.2 Nationalcompetitionauthoritypublications,includingguidelines ....................... 75
Australia ........................................................................................................... 75
Belgium ............................................................................................................ 76
Canada ............................................................................................................. 76
CzechRepublic .................................................................................................. 76
Denmark .......................................................................................................... 77
EuropeanUnion ................................................................................................ 77
Finland ............................................................................................................. 79
Ireland.............................................................................................................. 80
Korea ............................................................................................................... 80
NewZealand ..................................................................................................... 80
Switzerland ....................................................................................................... 80
Turkey .............................................................................................................. 80
UnitedKingdom ................................................................................................ 81
UnitedStates .................................................................................................... 81
5.3 Organisationaldocuments ................................................................................. 83
5.4 Pressreleases ................................................................................................... 91
5.5 Theses .............................................................................................................. 95
5.6 SubmissionstoReviewsandInquiries ................................................................. 96
5.7 Onlinesources ................................................................................................ 100
5.8 Internetsites .................................................................................................. 103
ResearchInstitutes .......................................................................................... 103
Internationalandmultinationalorganisationsandnetworks ............................... 104
Legalassociations ............................................................................................ 104
Competitionauthorities,judicialbodiesandgovernmentagencies ...................... 105
CompetitionBlogs ........................................................................................... 108
Othercompetitionlawwebsitesandresources ................................................. 108
PageB2
B1
Articles, Books, Reports and speeches
B1.1 Articles
Adams, Walter, 'Dissolution, Divorcement, Divestiture: The Pyrrhic Victories of
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Akbar, Yusaf, 'Grabbing Victory from the Jaws of Defeat: Can the GE/Honeywell
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World Competition 403
Aktas, Nihat, Eric de Bodt, Michel Levasseur and Andre Schmitt, 'The Emerging
Role of the European Commission in Merger and Acquisition Monitoring:
the Boeing-McDonnell Douglas Case' (2001) 7 European Financial
Management 447
Alford, Roger P, 'The Extraterritorial Application of Antitrust Laws: The United
States and European Community Approaches' (1992) 33 Virginia Journal
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Alford, Roger P, 'The Extraterritorial Application of Antitrust Laws: A Postscript on
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Anderson, Timothy L, 'Extraterritorial Application of National Antitrust Laws: The
Need for More Uniform Regulation' (1992) 38 Wayne Law Review 1579
Angwin, Duncan, 'Mergers and Acquisitions across European Borders: National
Perspectives on Preacquisition Due Diligence and the Use of Professional
Advisers' (2001) 36 Journal of World Business 32
'Antitrust Marathon II' (2008) 4 European Competition Journal 213
Antognini-O'Neill, Jennifer, 'Conflicts in International Merger Enforcement: The
Proposed de Havilland Merger' (1993) 9 Connecticut Journal of
Anwar, Syed Tariq, 'EU's Competition Policy and the GE-Honeywell Merger
Fiasco: Transatlantic Divergence and Consumer and Regulatory Issues'
(2005) 47 Thunderbird International Business Review 601
Arnold, Malcolm and David Parker, 'UK Competition Policy and Shareholder
Value: The Impact of Merger Inquiries' (2007) 18 British Journal of
Management 27
PageB3
Atwood, James R., 'Blocking Statutes and Sovereign Compulsion in American

Antitrust Litigation' (1996) 27 Swiss Review of International Competition
Law 5
Averitt, Neil W and Robert H Lande, 'Using the "Consumer Choice" Approach to
Antitrust Law' (2007) 74 Antitrust Law Journal 175
Baer, William J and R C Redcay, Solving Competition Problems in Merger
Control: The Requirements for an Effective Divestiture Remedy (2001) 69
George Washington Law Review 915
Baer, William J, 'Twenty years of Hart-Scott-Rodino Merger Enforcement:
Reflections on Twenty Years of Merger Enforcement Under the HartScott-Rodino Act ' (1997) 65 Antitrust Law Journal 825
Bagheri, Mahmood and Chizu Nakajima, 'Optimal Level of Financial Regulation
Under the GATS: A Regulatory Competition and Cooperation Framework
for Capital Adequacy and Disclosure of Information' (2002) 5 Journal of
International Economic Law 507
Baker, Donald I and W Todd Miller, 'Antitrust Enforcement and Non-Enforcement
as a Barrier to Imports' (1996) 24 International Business Lawyer 488
Banks, J D, 'The Development of the Concept of Extraterritoriality under
European Merger Law and its Effectiveness under the Merger Regulation
following the Boeing/McDonnell Douglas Decision 1997' [1998] European
Competition Law Review 306
Barringer, William H, 'Competition Policy and Cross Border Dispute Resolution:
Lessons Learned from the US-Japan Film Dispute' (1998) 6 George
Mason Law Review 459
Bean, Bruce W and Elena Kapustina, '1997: A Year of Significant Progress in
Russia' (1998) 6 Trade Practices Law Journal 119
Beaton-Wells, Caron, Mergers without Markets? Unilateral effects analysis in the
United States and its prospects in Australia (2006) 34 Australian
Business Law Review 186
Beckler, Richard W and Matthew H Kirtland, 'Extraterritorial Application of US
Antitrust Law: What Is a "Direct, Substantial, and Reasonably
Foreseeable Effect" Under the Foreign Trade Antitrust Improvements
Act?' (2003) 38 Texas International Law Journal 11
Bell, Robert B, Voluntary HSR Filings: A Modest Proposal (2009) 23 Antitrust 69
Bennett, Robert, 'The Draft Merger Guidelines and Market Definition: An Analysis
of Two Recent Cases' (1996) 29 Australian Economic Review 279
PageB4
Bhattacharjea, Aditya, The Case for a Multilateral Agreement on Competition

Policy: A Developing Country Perspective (2006) 9 Journal of
Bian, Lin and DG McFedtridge, 'The Efficiencies Defence in Merger Cases:
Implications of Alternative Standards' (2000) 33 Canadian Journal of
Economics 297
Black, Bernard S, 'Is This the First International Merger Wave?' (2000) 4(4) The
M&A Lawyer 20
Black, Bernard S., 'The First International Merger Wave (and the Fifth and Last
U.S. Wave)' (2000) 51 University of Miami Law Review 799
Blumenthal, William, Introductory Note (1997) 65 Antitrust Law Journal 813
Blumenthal, William, 'Reconciling the Debate over Merger Remedies: A
Discussant's Proposed Decision Rule' (2001) 69 George Washington Law
Review 978
Blumenthal, William, 'Twenty years of Hart-Scott-Rodino Merger Enforcement:
Introductory Note' (1997) 65 Antitrust Law Journal 813
Bonvin, Jacques, 'Competition Law in Switzerland' (1997) 3 European
Boscheck, Ralf, 'Competitive Advantage and the Regulation of Dominant Firms'
(2007) 30 World Competition 463
Braithwaite, John, 'Methods of Power for Development: Weapons of the Weak,
Weapons of the Strong' (2004-2005) 26 Michigan Journal of International
Law 297
Braithwaite, John, 'Rewards and Regulation' (2002) 29 Journal of Law and
Society 12
Braithwaite, John, 'Rewards and Regulation' (2002) 29 Journal of Law and
Society 12
Braithwaite, John, 'Rules and Principles: A theory of Legal Certainty' (2002) 27
Australian Journal of Legal Philosophy 47
Brandl, M and M Brodey, 'Take-Over Law and Merger Control in Austria' (2002)
The European Lawyer 11
Brebner, Julie, 'The Relevance of Import Competition to Merger Assessment in
Australia' (2002) 10 Competition and Consumer Law Journal 119
Brittan, Leon, 'Towards an International Framework of Competition Rules' (1996)
24 International Business Lawyer 454
PageB5
Brock, James W, 'Merger policy and the Antitrust Modernization' (2009) 54

Antitrust Bulletin 337
Brodley, Joseph F, 'The Economic Goals of Antitrust: Efficiency, Consumer
Welfare, and Technological Progress' (1987) 62 New York University Law
Review 1020
Brown, Jay and Niamh Connery, 'Comparing US and EU Merger Review:
Procedures, Principles and Whether Adopting the "Substantial Lessening
of Competition" Test in the EU will Produce Greater Harmony after
GE/Honeywell' (2002) 1 Antitrust Quarterly 2
Brown, Meredith M, Paul S Bird, and Alan H Paley, 'Legal Aspects of Acquisitions
by Non-U.S. Companies of Publicly Held U.S. Companies - Part 1' (2001)
5 The M&A Lawyer 9
Brunt, Maureen, The Use of Economic Evidence in Antitrust Litigation: Australia
(1986) 14 Australian Business Law Review 261
Budzinski, Oliver, 'Toward an International Governance of Transborder Mergers?
Competition Networks and Institutions Between Centralism and
Decentralism' (2003) 36 New York University Journal of International Law
and Politics 1
Bulmer, S J, Institutions and Change in the European Communities: the Case of
Merger Control (1994) 72 Public Administration 423
Bureau for Mercantile Law, South Africa, 'Competition Act 89 of 1998 (South
Africa)' (1998) 16 Bulletin 104
Burnley, Richard, 'An Appropriate Jurisdictional Trigger for the EC Merger
Regulation and the Question of Decentralisation' (2002) 25 World
Competition 263
Bursco, Sandro, Giuseppe Lopomo, David T Robinson and S Viswananathan,
'Efficient Mechanisms for Mergers and Acquisitions' (2007) 48
International Economic Review 995
Buxbaum, Hannah L, 'German Legal Culture and the Globalization of
Competition Law: A Historical Perspective on the Expansion of Private
Antitrust Enforcement' (2005) 23 Berkeley Journal of International Law
474
Buxbaum, Hannah L, 'Territory, Territoriality, and the Resolution of Jurisdictional
Conflict' (2009) 57 American Journal of Comparative Law 631
Cabral, Lus MB, 'An Equilibrium Approach to International Merger Policy' (2005)
25 International Journal of Industrial Organization 739
Cabral, Lus MB, 'International Merger Policy Coordination' (2003) 15 Japan and
the World Economy 21
PageB6
Calvani, Terry and Thomas A Evans, 'Regulation of Mergers and Monopolization'

(2001) 5 The M&A Lawyer 17
Calvani, Terry and Thomas A Evans, 'Regulation of Mergers and Monopolization
- Part 2' (2001) 5 The M&A Lawyer 13
Campbell, A Neil and Jeffrey P Roode, 'International Mergers: The Highest
Common Denominator Effect' (August 1997) Global Competition Review
<http://www.mcmillan.ca/Upload/Publication/International%20Mergers_th
e%20Highest%20Common%20Denominator_Campbell_0897.pdf> at 17
October 2001
Campbell, A Neil and J William Rowley, 'The Internationalization of Unilateral
Conduct Laws - Conflict, Comity, Cooperation and/or Convergence?'
(2008-2009) 75 Antitrust Law Journal 267
Campbell, A Neil and Omar Wakil, 'Competition Mergers & Acquisitions: Recent
Developments of Importance' (2007) Lexpert/The American Lawyer 42
Cann Jr, Wesley A, 'Internationalizing Our Views Toward Recoupment and
Market Power: Attacking the Antidumping/Antitrust Dichotomy Through
WTO-Consistent Global Welfare Theory' (1996) 17 University of
Pennsylvania Journal of International Economic Law 69
Cannon, Robert, 'Laker Airways and the Courts: A New Method of Blocking the
Extraterritorial Application of US Antitrust Laws' (1985) 7 Journal of
Comparative Business and Capital Market Law 63
Carlton, Dennis W, 'The Need to Measure the Effect of Merger Policy and How to
Do It' (2008) 22 Antitrust 39
Caroll, Anthony J, 'The Extraterritorial Enforcement of US Antitrust Laws and
Retaliatory Legislation in the United Kingdom and Australia' (1983?) 13
Denver Journal of International Law and Policy 377
Chen, Chunlai and Findlay, Christopher, 'A Review of Cross-border Mergers and
Acquisitions in APEC' (2003) 17 Asian-Pacific Economic Literature 14
Chey, Hyoung-Kyu, 'Do markets enhance convergence on international
standards? The case of financial regulation' (2007) 1 Regulation &
Governance 295
Cini, Michelle, The European Commission: An unelected legislator? (2006) 8(4)
Journal of Legislative Studies 14
Clarke, Julie, The Dawson Report and Merger Regulation (2003) 8 Deakin Law
Review 245.
Clarke, Julie, 'Multi-jurisdictional Merger Review Procedures - A Better Way'
(2006) 14 Trade Practices Law Journal 90
PageB7
Clifford, John F, Opashinov, Mark and Hollinger, Michael, 'Efficiency-dependent

Mergers: Lessons from Canada' (2003) 6 Global Competition Review 23
Clougherty, Joseph A and Zhang, Anming, 'Export Orientation and Domestic
Merger Policy: Theory and Some Empirical Evidence' (2005) 38 Canadian
Journal of Economics 778
Coccia, Massimo, 'Competition Law in Uzbekistan' (1996) 2 European
Cocuzza, Claudio and Montini, Massimiliano, 'International Antitrust Co-operation
in a Global Economy' (1998) 19 European Competition Law Review 156
Coeurdacier, Nicolas, Santis, Roberto A De and Aviat, Antonin, 'Cross-border
mergers and acquisitions and European integration' (2009) Economic
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Coleman, Mary, Christopher Pleatsikas, and David Teece, 'The Merger
Guidelines in the United States, Australia and New Zealand: An Economic
Perspective' (1998) 6 Trade Practices Law Journal 153
Collins, Lawrence, 'Blocking and Clawback Statutes: The United Kingdom
Approach' (1986) Journal of Business Law 372
Concannon, Eileen M and Andrew I Gavil, 'Review of Foreign Merger and
Acquisition Laws: Australian Trade Regulation: An Overview' (1983) 52
Antitrust Law Journal 967
Conn, Deanna, 'Assessing the Impact of Preferential Trade Agreements and New
Rules of Origin on the Extraterritorial Application of Antitrust Law to
International Mergers' (1993) 93 Columbia Law Review 119
Connor, John M., 'International Convergence of Antitrust Law and Enforcement'
(1997) 28 Antitrust Law & Economics Review 17
Coombe, Rosemary J, 'Interdisciplinary Approaches to International Economic
Law: The Cultural Life of Things: Antrhopological Approaches to Law and
Society in Conditions of Globalisation' (1995) 10 American University
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Corones, Stephen, 'The Revised ACCC Merger Guidelines' (1996) 24 Australian
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PageB8
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(2000) 20 Northwestern Journal of International Law and Business 155
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Cowie, Michael G, 'The Global Spread of Antitrust Enforcement Directed at
Mergers and Acquisitions' (1998) 43 Antitrust Bulletin 917
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Devlin, Alan and Bruno Peixoto, 'Reformulating Antitrust Rules to Safeguard
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Dignam, Alan, 'The Role of Competition in Determining Corporate Governance
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(2003) 38 Texas International Law Journal 27
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PageB9
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Easterbrook, Frank H, 'The Chicago School and Exclusionary Conduct' (2008) 31
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Editorial, 'Case Study: Nippon Paper Company Price-Fixing Case' (1999) 4(1)
Economic Perspectives - An Electronic Journal of the US Information
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Editorial, 'Case Study: The Boeing-McDonnell Merger' (1999) 4(1) Economic
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Editorial, UK Merger Process in Turmoil (2003)
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of Law and Economics 43
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PageB10
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PageB11
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Boeing versus the European Union of Airbus' (1998) 16 Brookings Review
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Union: Working Towards Conflict Resolution' (2006) 26 Northwestern
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Journal 292
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Behavioural Economics Support this Contention?' (2005) 13 Competition
and Consumer Law Journal 1
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Role of Pass Through (2006) 34 Australian Business Law Review 28
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Australian Economic Review 83
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Union and United States Regulatory Policy and Procedure' (1994) 7
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Asher, Allan, 'New Developments in Competition Policy: An Australian
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Bridgeman, John S, 'Mergers - Differences in Process or Policy? UK, US and EU
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November 2000
Bridgeman, John, 'Recent Developments in Co-operation Between National
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Budzinski, Oliver, 'The International Competition Network as an International
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Cosnita, Andreea and Jean-Philippe Tropeano, Do Remedies Affect the
Efficiency Defence? An Optimal Merger Control Analysis (Paper
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Crampton, Paul S, Gerwin van Gerven, and Joseph F Winterscheid, 'Best
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Elliott, Richard and Jim Dinning, Failing Firm Analysis in Canadian Merger
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Ergas, Henry, Doubts about Dawson (Paper presented at the Competition Law
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Fels, Allan, 'Competition and Globalisation: Trade and Cooperation with the EU in
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the EU in the New Millennium Conference, The University of Melbourne,
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January 2010
Fels, Allan, Mergers and Market Power (Speech delivered at the Australia-Israel
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January 2003
Fels, Allan, 'The Benefits of Institutional Integration: Antitrust Enforcement and
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Antitrust Law, 9 October 2000)
December 2000
Fels, Allan, 'The Globalisation Debate - Perspectives in Balancing Competition
Policy with the Trend to Globalisation' (Paper Presented at the Trade
Practices Workshop, Melbourne, 7-9 August 1998)
Fels, Allan, 'The International Dimension to Competition Policy' (Paper presented
at the 6th Asian and Oceanic Antimonopoly Conference, Canberra, 1999)
Fels, Allan, 'The Role of the ACCC in the Post Hilmer Era' (Paper Presented at
the Trade Practices Workshop, Melbourne, 7-9 August 1998)
Fels, Allan, 'The Trade Practices Act - The Past, The Present and The Future'
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2000
Fels, Allan, Trade and Competition in the Asia Pacific Region (Speech delivered
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Finckenstein, Konrad von, 'Core International Competition Issues in Canada'
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Fingleton, John, 'Upgrading Irish Competition Law: The 2001 Bill Examined'
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Galloway, Jonathan, EC Merger Control: Does the Re-emergence of
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2004
Goldman, Calvin S and Rill, James F, 'The Internationalization of Competition
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Canada Europe Round Table for Business Symposium on International
Competition Law: The Business Case for Convergence, Brussels, 29
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Goldman, Calvin S, 'Outline for Discussion by Calvin S Goldman on Cooperation
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Henneberry, Edward, Cross-Border Remedies in Merger Cases: The
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James, Charles, 'Reconciling Divergent Enforcement Policies: Where Do We Go

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14 November 2001
Jenny, Frederic, 'International Cooperation on Competition: Myth, Reality and
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November 2009
Katsouloacos, Yannis and David Ulph, On Optimal Legal Standards for
Competition Policy A General Analysis (Paper presented at Paper
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<http://www.cresse.info/uploadfiles/Optimal_Legal_Standards%20_April0
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King, Stephen P, 'The Clearance of Mergers' (Paper presented at the Law
Council of Australia - Trade Practices Workshop, Surfers Paradise,
Queensland, 11 August 2007)
Klein, Joel I, 'Time for a Global Competition Initiative?' (Paper presented at the
EC Merger Control 10th Anniversary Conference, Brussels, 14 September
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2010
Kobayashi, Hideaki, 'Japan's Views on International Cooperation in the Field of
Competition Policy' (Paper presented at the American Bar Association Section of Antitrust Law Midwinter Meeting, Hawaii, 27 January 1997)
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Kovacic, William E, 'Does US Merger Policy Have a Future?' (Paper presented at
the Law Council of Australia - Trade Practices Workshop, Surfers
Paradise, Queensland, 11 August 2007)
Kovacic, William E, 'Extraterritoriality, Institutions, and Convergence in
International Competition Policy' (Speech delivered at the Annual Meeting
of the American Society of International Law, Washington DC, 5 April
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September 2009
Kurokochi, Hisami, 'The Relationship Between Economic Policy Development
and Competition Policy' (Paper presented at the Sixth Asian and Oceanic
Antimonopoly Conference, Canberra, 16 November 1999)
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Lowe, Philip, 'The Future Shape of European Merger Control' (Speech delivered
at the RBB/FIPRA Seminar, Brussels, 17 February 2003)
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14 January 2010
Lowe, Philip, 'The Interaction between the Commission and Small Member
States in Merger Review' (Speech delivered at the Competition Authority,
Merger Review Day, Dublin, 10 October 2003)
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14 January 2010
Neil Campbell, 'Best Practices for the Review of International Mergers'
(Paper presented at the IBA's Fifth Annual Competition Conference,
Florence, 21 September 2001) <http://www.canada-europe.org/en/CDRom/pdf/Best%20Practices.pdf> at 14 January 2004
McNutt, Patrick, ''Carpe Diem' Says New Chairman about Authority's New Role'
(Paper presented at Competition Press Forum, Dublin, 24 February 1997)
Mohlenkamp, Andrewas, 'Convergence in International Antitrust Law' (Paper
presented at the CERT Symposium 2001 - International Competition Law,
Berlin, 12 November 2001) <http://www.canada-europe.org/en/CDRom/pdf/BDI.pdf> at 14 January 2004
Monti, Mario, Convergence in the EU-US Antitrust Policy Regarding Mergers and
Acquisitions: An EU Perspective (Speech to the UCLA Law First Annual
Institute on US and EU Antitrust Aspects of Mergers and Acquisition, Los
Angeles, 28 February 2004)
Monti, Mario, 'Cooperation between competition authorities - a vision for the
future' (Paper presented at the Japan Foundation Conference,
Washington DC, 23 June 2000)
Monti, Mario, 'The Future for Competition Policy in the European Union' (Speech
delivered at the Merchant Taylors Hall, London, 9 July 2001)
<http://ec.europa.eu/competition/speeches/index_2001.html> at 17
September 2009
Montini, Massimiliano, 'Globalization and International Antitrust Cooperation'
(Paper presented at the International Conference - Trade and Competition
in the WTO and Beyond, Venice, 4-5 December 1998 (Revised draft 31
March 1999))
<http://papers.ssrn.com/paper.taf?ABSTRACT_ID=200611> at 4-5
December 1998
Norman, Neville R, 'Globalisation - and Competition Policy/Law' (Paper presented
at the Trade Practices Workshop, Melbourne, 7-9 August 1998)
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Okamoto, Iwau, 'A Draft Presentation Paper on Competition Principles for APEC'
(Paper presented at the APEC Competition Policy and Deregulation
Workshop, Christchurch, New Zealand, 30 April - 1 May 1999)
Oster, Alan, 'The Globalisation Debate - Perspectives in "Balancing" Competition
with the Trend to Globalisation in the Finance Industry' (Paper presented
at the Trade Practices Workshop, Melbourne, 7-9 August 1998)
Otten, Adrian, 'The Work of the WTO Working Group on the Interaction Between
Trade and Competition Policy' (Paper presented at the Competition Policy
and Deregulation Workshop, Christchurch, New Zealand, 30 April - 1 May
1999)
Parker, Richard G, 'Global Merger Enforcement' (Speech delivered to the
International Bar Association, Barcelona, Spain, 28 September 1999)
<http://www.ftc.gov/speeches/other/barcelona.htm> at 10 Nov 1999
Pitofsky, Robert, Antitrust Analysis in High-Tech Industries: a 19th Century
Discipline Addresses 21st Century Problems (Paper presented at the
American Bar Association, Section of Antitrust Laws Antitrust Issues in
High-Tech Industries Workshop, Scottsdale, Arizona, 25-26 February
1999) <http://www.ftc.gov/speeches/pitofsky/hitch.htm> at 27 July 1999
Pitofsky, Robert, 'Competition Policy in a Global Economy - Today and
Tomorrow' (Speech delivered at the European Institute's Eighth Annual
Transatlantic Seminar on Trade and Investment, Washington DC, 4
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November 2009
Pitofsky, Robert, 'EU and US Approaches to International Merger - Views from
the US Federal Trade Commission' (Paper presented at the EC Merger
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<http://www.ftc.gov/speeches/pitofsky/pitintermergers.shtm> at 15
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Pitofsky, Robert, 'International Antitrust - An FTC Perspective' (Paper presented
at the Fordham Corporate Law Institute, 22nd Annual Conference on
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Pitofsky, Robert, 'Merger and Competition Policy - The Way Ahead' (Paper
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2009
Pitofsky, Robert, The Effect of Global Trade on United States Competition Law
and Enforcement Policies (Paper presented at the Fordham Corporate
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Poddar, Dave, 'Commentary on Mergers Panel Papers' (Paper presented at the

Law Council of Australia - Trade Practices Workshop, Surfers Paradise,
11 August 2007)
Reno, Janet, 'The International Competition Policy Advisory Committee,
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Ricupero, Rubens, The Havana Charter - 50 Years After (Paper presented to
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April 2000
Rosch, J Thomas, 'Monopsony and the Meaning of "Consumer Welfare" A Closer
Look at Weyerhaeuser' (Paper presented at the 2006 Milton Handler
Annual Antitrust Review, New York, 7 December 2006)
Rosch, J Thomas, 'The Common Law of Section 2: Is It Still Alive and Well?'
(Paper presented at the George Mason Law Review 11th Annual
Symposium, Washington DC, 31 October 2007)
Rowley, J William and Omar K Wakil, 'International Mergers: The Problem of
Proliferation' (Paper presented at the 33rd Annual Conference on
International Antitrust Law and Policy, New York, September 2006)
<http://www.mcmillan.ca/Upload/Publication/JRowley_International_Merg
ers_Fordham%20Conference.pdf> at 19 November 2009
Rowley, J William and Omar K Wakil, 'The Internationalisation of Antitrust. The
Need for a Global Competition Forum' (Paper presented at the Canadian
Competition Policy: Preparing for the Future, Toronto, 19-20 June 2001)
<http://www.ivey.uwo.ca/competitionconference2001/proceedings2/JWillia
mRowley.pdf> at 20 April 2002
Rowley, J William, 'The Internationalisation of Merger Review: Towards Global
Solutions (Perspectives of a Non-Governmental Advisor)' (Paper
presented at the International Competition Network, First Annual
Conference, Napoli 28-29 September 2002)
<http://www.mcmillanbinch.com/Upload/Publication/The%20Internationali
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Rowley, J William, 'The Internationalisation of Merger Review: Global Solutions
Require Both Words and Actions' (Paper presented at the 2003 Antitrust
Conference: Antitrust Issues in Todays Economy, New York, 18-19
March 2003)
<http://www.mcmillan.ca/Upload/Publication/The%20Internationalisation%
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Rowley, J William, 'The Internationalisation of Merger Review: The Need for

Global Solutions' (Paper presented at the Canada-EU Summit, Ottawa,
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Rowley, J William, Omar K Wakil and A Neil Campbell, 'Streamlining International
Merger Control' (Paper presented at the EC Merger Control 10th
Anniversary Conference, Brussels, 14 September 2000)
<http://www.mcmillanbinch.com/Upload/Publication/Streamlining%20Inter
national%20Merger%20Control_Sept%202000.PDF> at 14 January 2004
Samuel, Graeme, Balancing the Competing Pressures (Speech delivered at the
National Press Club, 12 November 2003)
Schaub, Alexander, 'Assessing International Mergers: the Commission's
Approach' (Paper presented at the EC Merger Control 10th Anniversary
Conference, Brussels, 14 September 2000)
Scott, Sheridan, '"C" is for Competition: How We Get Things Done in a
Globalized Business World' (Paper presented at the Insight Conference,
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Scott, Sheridan, 'The Canadian Competition Bureau's Approach to Merger
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Practices Workshop, Surfers Paradise, Queensland, 11 August 2007)
Scott-Wilson, C J, 'The Benefits of Converging Standards in Merger Review
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Shelton, Joanna R, 'Competition Policy: What Chance for International Rules?'
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Shelton, Joanna R, 'Regulatory Reform, Demonopolisation, and Privatisation:
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Pre-UNCTAD X Seminar on the Role of Competition Policy for
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Simons, Joseph J, Merger Enforcement at the FTC (Keynote Address to the
Tenth Annual Golden State Antitrust and Unfair Competition Law Institute,
Antitrust and Unfair Competition Law Section of the State Bar of
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Procedures' (Paper presented at the Canada Europe Round Table for
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2004
Sullivan, Michael A and Mario Brilliant, A Comparison of Basic Merger
Notification Requirements in Canada, the United States and the European
Community (Paper presented at the Annual Conference of the Canadian
Bar Association Competition Law Section, 20-21 September 2001)
<http://www.bureaudelaconcurrence.gc.ca/eic/site/cbbc.nsf/eng/01177.html> at 30 January 2010
Svetlicinii, Alexandr, 'Competitiveness and Competition: International Merger
Control from the Business Prospective' (Paper Paper presented at
Economic Integration, Competition and Cooperation, 6th International
Conference, Opatija, 19-20 April 2007)
<http://ssrn.com/abstract=1311069> at 19 November 2009
Valentine, Debra A, Antitrust in a Global High-Tech Economy (Speech delivered
to the American Bar Association, Law Practice Management Section,
Women Rainmakers and The Womens Bar Association of the District of
Columbia, 8th National Forum for Women Corporate Counsel, Washington
DC, 30 April 1999) <http://www.ftc.gov/speeches/other/dvatspeech.shtm>
at 27 July 1999
Valentine, Debra A, The Evolution of US Merger Law (Speech delivered to the
INDECOPI Conference, 13 August 1996)
<http://www.ftc.gov/speeches/other/dvperumerg.shtm> at 21 January
2010
van Miert, Karel, 'Globalization of Competition: The Need for Global Governance'
(Speech delivered at Vrije Universiteit Brussel, Brussels, 25 March 1998)
<http://ec.europa.eu/competition/speeches/text/sp1998_052_en.html> at
10 July 2000
van Miert, Karel, 'International Cooperation in the Field of Competition - A View
from the EC' (Paper presented at the Fordham - 24th Annual Conference,
16 October 1997 1997)
<http://europa.eu.int/comm/competition/speeches/text/sp1997_073_en.ht
ml (10 July 2000)> at 16 October 1997 Accessed
Varney, Christine A, An Update on the Review of the Horizontal Merger
Guidelines (Speech delivered to the Horizontal Merger Guidelines
Review Projects Final Workshop, Washington DC, 26 January 2010)
<http://www.justice.gov/atr/public/speeches/254577.htm> at 28 January
2010
PageB52
Varney, Christine A, Coordinated Remedies: Convergence, Cooperation, and the

Role of Transparency (Speech delivered to the Institute of Competition
Law, New Frontiers of Antitrust Conference, Paris, 15 February 2010)
Varney, Christine A, Merger Guidelines Workshops (Speech delivered at the
Third Annual Georgetown Law Global Antitrust Enforcement Symposium,
Washington DC, 22 September 2009)
Varney, Christine A, 'Our Progress Towards International Convergence' (Paper
presented at the 36th Annual Fordham Competition Law Institute
Conference on International Antitrust and Policy, New York, 24
September 2009)
<http://www.justice.gov/atr/public/speeches/250264.htm> at 14 January
2010
Varney, Christine A, 'Procedural Fairness' (Paper presented at the 13th Annual
Competition Conference of the International Bar Association, Fiesole,
Italy, 12 September 2009)
<http://www.justice.gov/atr/public/speeches/249974.pdf> at 14 January
2010
von Finckenstein, Konrad, 'International Antitrust Cooperation: Bilateralism or
Multilateralism?' (Speech delivered to the American Bar Association
Section of Antitrust Law and the Canadian Bar Association National
Competition Law Section, Vancouver, 31 May 2001)
<http://strategis.ic.gc.ca/SSG/ct02240e.html> at 28 November 2001
Waller, Spencer Weber, 'From the Ashes of Hartford Fire: The Unanswered
Questions of Comity' (Paper presented at the 25th Anniversary
Conference on International Antitrust Law and Policy, Fordham Corporate
Law Institute, New York, 22-23 October 1998) 33
Wolff, Alan Wm., 'Trade and Competition Policy' (Paper presented at the
Economic Strategy Institute, Washington DC, 15 December 1997)
Wolff, Alan Wm. & Dewey Ballantine, 'WTO Dispute Settlement and the Particular
Problem of Trade and Competition Policy' (Paper presented at the
Conference on Dispute Resolution in the World Trade Organization,
Washington DC, 24 June 1998)
<http://www.libertyparkusafd.org/lp/Hamilton/speeches%5CTrade%20Dis
pute%20Settlement.pdf> at 2 May 2000
Zemnek, Ji, 'Competition Law Problems Relating to the Czech Republic's
Accession to the EU' (Paper presented at the Third European Community
Studies Association (ECSA) Conference: The European Union in a
Changing World, The Prague, 19-20 September 1996)
PageB53
B1.6 Reports and working papers

Aktas, Nihat, Eric de Bodt and Richard Roll, 'Market Response to European
Regulation of Business Combinations' (UCLA Business Forecast, 2002)
Antitrust Modernization Commission, Report and Recommendations (April 2007)
<http://govinfo.library.unt.edu/amc/report_recommendation/toc.htm> at 19
January 2010
Avi-Yonah, Reuven S, 'National Regulation of Multinational Enterprises: An
Essay on Comity, Extraterritoriality, and Harmonization' (Research Paper
No 00-01, University of Michigan, 2002)
Banal-Estaol, Albert Paul Heidhues, Rainer Nitsche and Jo Seldeslachts,
Merger Clusters during Economic Booms (Discussion Paper No SP II
2006-17, Wissenschaftszentrum Berlin, September 2006)
<http://skylla.wz-berlin.de/pdf/2006/ii06-17.pdf> at 27 January 2010
Bartolini, David and Alberto Zazzaro, 'The Anticompetitive Effects of the Antitrust
Policy' (Working Paper No 18, MoFiR, Universita Politecnica delle
Marche, Department of Economics, 2009)
<http://ideas.repec.org/p/anc/wmofir/18.html> at 3 May 2009
Bergeijk, Peter AG van, 'What could anti-trust in the OECD do for development?'
(Working Paper No 473, Institute of Social Studies, 2009)
Bergman, Mats A, Coate, Malcolm B, Jakobsson, Maria and Ulrick, Shawn W,
'Comparing Merger Policies: The European Union versus the United
States' (Potomac Papers in Law and Economics No 07-01, 2007)
Budzinski, Oliver, 'Pluralism of Competition Policy Paradigms and the Call for
Regulatory Diversity' (Working Paper No 14/2003, Philipps-University of
Marburg Volkswirtschaftliche Beitraege, 2003)
<http://ssrn.com/abstract=452900> at 23 November 2009
Campbell, A Neil and William J Rowley, 'Best Practices for Merger Review:
Analysis and Recommendations for the Review Processes in the United
States and the European Union' (Report, Merger Streamlining Group,
November 2002) <http://www.mcmillanbinch.com/Upload/Publication/
Best%20Practices%20for%20Merger%20Review_Analysis%20and%20R
ecommendations_Rowley_1102.pdf> at 18 March 2004
CBI, 'The Benefits of Converging Standards in Merger Control Procedures'
(2001) 29 October 2001 <http://www.cbi.org.uk/ndbs/positiondoc.nsf/
1f08ec61711f29768025672a0055f7a8/44e6819b8a53807880256b4c004b
f77b/> at 29 October 2001
Chongwoo, Choe and Chander Shekhar, 'Compulsory or Voluntary Pre-merger
Notification? Theory and Some Evidence' (Working Paper No 13450,
MPRA Paper, 2009) <http://ideas.repec.org/p/pra/mprapa/13450.html> at
2 March 2009
PageB54
Clougherty, Joseph A, 'Competition Policy Trends and Economic Growth: CrossNational Empirical Evidence' (No 7515, Centre for Economic Policy
Research, 2009)
Coate, Malcolm B and Heimert, Andrew J, 'Merger Efficiencies at the Federal
Trade Commission 1998-2007' (Bureau of Economics, Federal Trade
Commission, 2009)
Coate, Malcolm B and Kleit, Andrew N, 'The Political Economy of the Federal
Trade Commission - Administrative Decision Making in Merger
Enforcement' (Working Paper No 210, Federal Trade Commission, 1995)
Coate, Malcolm B, 'Bush, Clinton, Bush: Twenty Years of Merger Enforcement at
the Federal Trade Commission' (Working Paper, 29 September 2009)
Coate, Malcolm B, 'Unilateral Effects under the Guidelines: Models, Merits and
Merger Policy' (2008)
Competition Authority of Ireland, 'Second Submission to the Merger Review
Group' (2, 1997)
Competition Policy Review Panel, Compete to Win (Final Report, Canada, June
2008) <http://www.ic.gc.ca/eic/site/cprp-gepmc.nsf/vwapj/Compete_to_
Win.pdf/$FILE/Compete_to_Win.pdf> at 16 February 2010
Connor, John M and Bush, Darren, 'Deterring International Cartels in the Face of
Comity and Jurisdiction: A Legal, Economic, and Empirical Evaluation of
the Extraterritorial Application of US Antitrust Laws' (2007)
Davey, Lise and John K Barker, 'Merger Review Benchmarking Report'
(Competition Bureau (Canada), 2001)
de la Mano, Miguel, 'For the Customer's Sake: The Competitive Effects of
Efficiencies in European Merger Control' (European Commission
Enterprise Papers No 11, 2002)
Elhauge, Einer, 'Harvard, Not Chicago: Which Antitrust School Drives Recent
Supreme Court Decisions' (Harvard Law and Economics Discussion
Paper No 594, 2007)
Ezrachi, Ariel, 'Merger Control and Cross Border Transactions - A Pragmatic
View on Cooperation, Convergence and What's in Between' ((L) 11/05,
The University of Oxford Centre for Competition Law and Policy, 2005)
Evans, David S Why Different Jurisdictions Do Not (and Should Not) Adopt the
Same Antitrust Rules (Working Paper, 16 February 2009)
PageB55
Evenett, Simon J and Michal Gal, A Report on the Third Annual Conference of
the International Competition Network (International Competition Network,
2004) <http://www.internationalcompetitionnetwork.org/seoul/
seoul_icn_final.pdf> at 21 January 2005
Fackelmann, Christian R, 'Dynamic Efficiency Considerations in EC Merger
Control - An Intractable Subject or a Promising Chance for Innovation?'
((L) 09/06, The University of Oxford Centre for Competition Law and
Policy, 2006)
Farmer, Susan Beth, The Evolution of Chinese Merger Notification Guidelines: A
Work in Progress Integrating Global Consensus and Domestic
Imperatives (Pennsylvania State University, Dickinson School of Law, 29
May 2009) <http://ssrn.com/abstract=1411727> at 4 March 2010
Farrell, Joseph and Katz, Michael L, 'The Economics of Welfare Standards in
Antitrust' (UC Berkeley, Competition Policy Center, Institute of Business
and Economic Research, 20 July 2006)
Farrell, Joseph and Carl Shapiro, Antitrust Evaluation of Horizontal Mergers: An
Economic Alternative to Market Definition (Working Paper, 25 November
2008) <http://ssrn.com/abstract=1313782> at 20 January 2010.
M Fox, Eleanor, A Report on the First Annual Conference of the International
Competition Network (International Competition Network, 2002)
<http://www.internationalcompetitionnetwork.org/news/dec102002.doc> at
21 January 2005
Fox, Eleanor M and Merit E Janow, A Report of the Second Annual Conference
of the International Competition Network (International Competition
Network, 2003)
<http://www.internationalcompetitionnetwork.org/merida_report_2003.pdf
> at 20 January 2005
Fuller, Deanne and Sgro, Pasquale M, 'Developing a World Competition Code:
Competition and International Trade Policies' (Working Paper 9811,
Deakin University School of Economics, 1998)
Gal, Michal S, 'Extra-territorial Application of Antitrust - The Case of a Small
Economy (Israel)' (09-03, NYU Center for Law, Economics and
Organization, 2009)
Gans, Joshua S, '"Protecting Consumers by Protecting Competition": Does
Behavioural Economics Support this Contention' (2005)
Gans, Joshua S, 'Reconsidering the Public Benefit Test in Merger Analysis: The
Role of "Pass Through"' (2005)
Gans, Joshua S, 'The Competitive Balance Argument for Mergers' (1999)
PageB56
Geradin, Damien, Marc Reysen and David Henry, 'Extraterritoriality, Comity and
Cooperation in EC Competition Law' (Working Paper, July 2008)
<http://ssrn.com/abstract=1175003> at 8 October 2009
Goddard, Garry and Walker, Greg, 'Bank Mergers in Australia: Competition
Assessment of the Commonwealth Bank of Australia's Acquisition of
Colonial Limited' (2/01, Charles Sturt University, 2001)
Group, Merger Streamlining, 'Preliminary Report on a Survey Commissioned by
the Merger Streamlining Group: Implementation of the International
Competition Network's Recommended Practices for Merger Notification
Procedures' (International Competition Network, 2003)
Guzman, Andrew T, 'International Antitrust and the WTO: The Lesson from
Intellectual Property' (University of California, Berkeley, 2000)
Guzman, Andrew, 'The Case for International Antitrust' (10, University of
California, 2003)
Heyer, Kenneth, 'Welfare Standards and Merger Analysis: Why Not The Best'
(Discussion Paper No EAG 06-08, Department of Justice Economic
Analysis Group, March 2006)
<http://www.justice.gov/atr/public/eag/221880.pdf> at 20 January 2010
Hovenkamp, Herbert J, 'Mergers and Market Definition' (College of Law,
University of Iowa, 2009)
International Bar Association, Report of the Task Force on Extraterritorial
Jurisdiction (6 February 2009)
Hilmer, Frederick G, Mark Rayner and Geoffrey Taperell, National Competition
Policy (Report by the Independent Committee of Inquiry, Commonwealth
of Australia, 25 August 1993) (Hilmer Report)
Karagiannis, Yannis, 'Why the EU Does Not Have an Independent Competition
Agency: French Interests and Transaction Costs in Early European
Integration' (Working Paper No 2008/18, Institut Barcelona D'Estudis
Internacionals (IBEI), 2008)
Kocmut, Mitja, 'The Role of Efficiency Considerations Under the EU Merger
Control' ((L) 05/05, The University of Oxford Centre for Competition Law
and Policy, 2005)
Kovacic, William E, Robert C Marshall, Leslie M Marx and Steven P Schulenberg,
'Quantitative Analysis of Coordinated Effects' (Working Paper, August
2006, Revised October 2006) <http://www.bateswhite.com/news/pdf/
Fordham%20volume%20paper%20Final%20(CEMR%20Fordham%20Ko
vacic%20et%20al).pdf> at 23 November 2007
PageB57
KPMG, 'Peer Review of Competition Policy' (Department of Trade and Industry

(UK), 2007)
Lear Laboratorio di Economia, Antitrust, Regolamentazione, Ex-post Review of
Merger Control Decisions (A Study for the European Commission,
December 2006)
<http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf> at 25
January 2010
Lex Mundi, Pre-Merger Notification Survey (Prepared by the Lex Mundi
Antitrust, Competition and Trade Practice Group, September 2009)
<http://www.lexmundi.com/images/lexmundi/PracticeGroups/Antitrust/Pre
MergerUpdate09/Premerger_Survey_Update_September_2009_Main_Do
cument.pdf> at 30 January 2010
Litzell, Maria, The Appraisal of Collective Dominance under the Clarified
Substantive Test of the New EC Merger Regulation A Step Towards
Greater Global Convergence of Merger Control? (Working Paper, 12
September 2005)
<http://www.elsa.org/fileadmin/user_upload/elsa_international/PDF/SPEL/
SPEL05_1_MARIA_LITZELL.pdf> at 29 January 2010
Lyons, Bruce, 'An Economic Assessment of EC Merger Control: 1957-2007'
(CCP Working Paper 08-17, Department of Economics and the ESRC
Centre for Competition Policy, University of East Anglia, 2008)
Mason, Robin and Helen Weeds, The Failing Firm Defence: Merger Policy and
Entry (Discussion Paper 3664, Centre for Economic Policy Research, 9
October 2002)
<http://www.cepr.org/meets/wkcn/6/6600/papers/weeds.pdf> at 27
January 2010
Mattoo, Aaditya, 'Dealing with Monopolies and State Enterprises' (Working Paper
No TISD-98-01, World Trade Organization, 1998)
<http://www.wto.org/english/res_e/reser_e/ti9801_e.htm > at 17 January
2000
Neil Campbell, 'Best Practices for the Review of International Mergers Discussion Draft' (Discussion Paper prepared for IBAs Fifth Annual
Competition Conference, 2001) <http://www.canada-europe.org/en/CDRom/pdf/Best%20Practices.pdf> at 19 November 2009
McMahon, Kathryn, 'Developing Countries and International Competition Law
and Policy' (Research Paper No 2009/11, Warwick School of Law, 2009)
Monti, Mario, 'Prospects for Transatlantic Competition Policy' (Peterson Institute
for International Economics, Policy Brief 01-6, May 2001)
<http://www.iie.com/publications/pb/pb.cfm?ResearchID=74> at 25
January 2010
PageB58
Pattberg, Philipp, 'The Transformation of Global Business Regulation' (Global

Governance Working Paper Series No 18, Amsterdam, The Global
Governance Project, 2006)
Pengilley, Warren, Extraterritorial effects of United States Commercial and
Antitrust Legislation: a view from "down under" (Occasional Paper No 7,
Transnational Corporations Research Project, University of Sydney 1984)
PriceWaterhouseCoopers, 'A Tax on Mergers? Surveying the Time and Costs to
Business of Multi-jurisdictional Merger Reviews' (June 2003)
<http://www.globalcompetitionforum.org/PWC_Merger_Cost_Study_Repo
rt_Final_2003_Jun.pdf> at 25 June 2003
Report of Group of Experts on Competition Policy in the New Trade Order:
Strengthening International Cooperation and Rules (Report COM(96)284
final, European Commission, DGIV, Brussels, 12 July 1995)
<http://aei.pitt.edu/4112/> at 31 January 2010
Rhee, Ki-Eun, 'Reevaluating Merger Guidelines for the New Economy' (Working
Paper No 06-18, KDI School of Public Policy and Management,
December 2006)
Ridyard, Derek, The Commissions New Horizontal Merger Guidelines An
Economic Commentary (GCLC Working Paper 02/05, The Global
Competition Law Centre, 2005)
<http://www.coleurop.be/content/gclc/documents/GCLC%20WP%200205.pdf> at 20 January 2010
Rolinitis, Steve, 'The Boeing & McDonnell Douglas Merger' (Paper Prepared for
Dr David Loomis, Illinois State University, 1997)
<http://economics.illinoisstate.edu/dloomis/320web/steve.pdf > at 31
January 2010
Scott, Andrew, National Champions and the Two-Thirds Rule in EC Merger
Control (Working Paper CCP o6-6, EC Centre for Competition Policy &
The Norwich Law School, University of East Anglia, April 2006)
<http://www.uea.ac.uk/polopoly_fs/1.104483!ccp06-6.pdf> at 30 January
2010
Slaughter, Anne-Marie and David T Zaring, 'Extraterritoriality in a Globalized
World' (Working Paper, 1997) <http://ssrn.com/abstract=39380> at 11
September 2009
Salvo, Alberto, 'Sequential Cross-border Mergers in Models of Oligopoly'
(Working Paper, Northwestern University Kellogg School of
Management, 2008) <http://ssrn.com/abstract=932611> at 13 January
2010
PageB59
Sokol, D Daniel, 'Monopolists Without Borders: The Institutional Challenge of

International Antitrust in a Gilded Age' (Research Paper No 1034,
University of Wisconsin Legal Studies, 2007)
Spector, David, 'Horizontal Mergers, Entry, and Efficiency Defences' (Paper No
01-18, Massachusetts Institute of Technology, Department of Economics,
2001)
Stephan, Paul, 'Competitive Competition Law? An Essay Against International
Cooperation' (Working Paper 03-3, University of Virginia School of Law,
2003)
Tepperman, Andrew and Sanderson, Margaret, 'Innovation and Dynamic
Efficiencies in Merger Review' (CRA International, 2007)
Trade Practices Act Review Committee, Review of the Competition Law
Provisions of the Trade Practices Act (Commonwealth of Australia,
January 2003) (Dawson Report)
Werden, Gregory J, 'Essays on Consumer Welfare and Competition Policy'
(Working Paper, 2 March 2009) <http://ssrn.com/abstract=1352032> at 20
January 2010
Wise, Michael, 'Review of Competition Law and Policy in Hungary' (OECD, 2000)
Whish, Richard and Diane Wood, Merger Cases in the Real World A Study of
Merger Control Procedures (OECD, 1994) (Whish/Wood Report)
B1.7 Newspaper and magazine articles

ACCC Not to Intervene in Proposed Soft Drinks Merger, M2 Presswire, 9
October 2000
ACCC: ACCC Opposes Revised Coke/Schweppes Acquisition, M2 Presswire, 8
June 1999
AFP, 'EU Court Stymies Sony-BMG Merger', ABC News Online, 13 July 2006
AFP, 'India Rebukes World's Rich for Setting Unfair Global Economic Rules',
Yahoo! News, Cairo, 19 June 2000
Andrews, Edmund L, 'Boeing, Threatened, Sees Trade War', New York Times
(New York), 21 May 1997, D1
<http://www.nytimes.com/1997/05/21/business/boeing-threatened-seestrade-war.html?pagewanted=all> at 15 January 2010
Andrews, Edmund L and Paul Meller, Europe Ends Bid by GE For Honeywell,
The New York Times (New York), 4 July 2001
<http://www.nytimes.com/2001/07/04/business/europe-ends-bid-by-gefor-honeywell.html?pagewanted=1> at 17 March 2010
PageB60
Arnott, Sarah, Transatlantic Row over Oracles Sun takeover, The Independent,
11 November 2009
<http://www.independent.co.uk/news/business/news/transatlantic-rowover-oracles-sun-takeover-1818242.html> at 22 January 2010.
Associated Press, 'Impala Launches Appeal Against EU Clearance of Sony BMG
Merger', International Herald Tribune, 16 June 2008
Aussie Block on Cadburys Coke Deal, The Evening Standard, London, 8 April
1999
Australia: BHP-Rio Merger would Push Up Iron Ore Prices, says Australian
Regulator News, TendersInfo, 26 August 2008
Australias Watchdog Wont Oppose BHP-Rio Merger, AP Worldstream, 1
October 2008
'Boeing Responds to European Commission Statement of Objections to Merger',
PR Newswire Europe, 21 May 1997
<http://www.prnewswire.co.uk/cgi/news/release?id=12304 > at 15
January 2010
Cadbury Schweppes: Acquisition of Cadbury Schweppes Beverage Brands by
the Coca-Cola Company in Australia, M2 Presswire, 14 April 1999
Cadbury Schweppes, Coke Rearrange Deal to Placate EU Regulators, Food &
Drink Weekly, 31 May 1999 <http://www.allbusiness.com/retail-trade/foodbeverage-stores/267520-1.html> at 9 March 2010
Clegg B and A Hepworth, ACCC Not to Blame for Knocking our Champions,
Australian Financial Review, 19 September 2002.
Coca-Cola Gains Approval to Buy Cadbury Schweppes South Africa Business,
Food & Drink Weekly, 12 July 1999
Coleman, Brian, 'Clinton Hints US May Retaliate if EU Tries to Block BoeingMcDonnell Deal', Wall Street Journal (New York), 18 July 1997, A2
Editorial, 'Antitrust Explosion; Competition Regulators Must Not Compete With
Each Other', Financial Times (London), 2008, 10
Elliott, Michael, 'The Anatomy of the GE-Honeywell Disaster', Time Magazine (8
July 2001)
<http://www.time.com/time/business/article/0,8599,166732,00.html> at 13
January 2010
Ergas, Henry Good Report, Pity About All the Flaws, Australian Financial
Review (Sydney), 18 June 2003, 63
EU Plans Investigation of Coca-Cola, Cadbury Seal for Antitrust Actions, Food &
Drink Weekly, 3 May 1999
PageB61
European Commission Opens Formal Antitrust Proceedings Into Joint Venture

Between Rio Tinto and BHP Billiton, Mondaq Business Briefing, 2
February 2010
European Commission to Extend Review of BHP-Rio Tinto Bid, Mining
International, 1 August 2008
EU Blocks GE/Honeywell Deal, BBC News (UK), 3 July 2001
<http://news.bbc.co.uk/1/hi/business/1420398.stm> at 29 January 2010
'EU Google/DoubleClick Merger Approval a Good Sign for Comity', RedOrbit
News 2005, <http://www.redorbit.com/news/display/?id-1291460> 10
October 2009
Fels, Allan, 'Globalisation Cuts Both Ways, Business Review Weekly, 27
October 2000 <http://www.brw.com.au/stories/20001027/7668.htm> at 27
October 2000
Fels, Allan, Persistent Myths Ignore the Reality of ACCC Action, Australian
Financial Review, 21 November 2002
Fox, Eleanor M and Andreas F Lowenfeld, 'Boeing Affair's Valuable Lessons',
Wall Street Journal (New York), 5 August 1997, A19
Gale Group, 'Merger Muddle; Antitrust; Transatlantic Antitrust Troubles', The
Economist (United States), 23 June 2001, 4
Gerard, Damien, 'Managing the Financial Crisis in Europe: Why Competition Law
is Part of the Solution, Not of the Problem', Global Competition Policy:
The Online Magazine for Global Competition Policy, December 2008
Global Dealing for BHP Billiton as it Tries to Sell Rio Merger, AsiaPulse News,
16 November 2007
Hicks, Matt, 'B2B e-markets in antitrust spotlight', eWEEK, 17 July 2000,
International Law Office, 'Multinationals Are Uncomfortable with EU Competition
Reform', International Law Office, 20 June 2000
<http://www.internationallawoffice.com/detailnews.CFM?News__Ref=546
> at 29 July 2000
Japan Antitrust Regulator Ends BHP-Rio Probe, iStockAnalyst, 3 December
2008
Jenkins Jr, Holman W, 'What's a Little Antitrust Between Friends?', Wall Street
Journal (New York), 28 January 1997, A17
Kroes in U-turn on Oracle-Sun Deal EurActiv.com (Online), 21 January 2010
<http://www.euractiv.com/en/infosociety/kroes-turn-oracle-sundeal/article-189132> at 22 January 2010
PageB62
Lohr, Steve and James Kanter, Cultural Bent Hangs Over Oracles Battle for
Sun, The New York Times (New York), 11 November 2009
<http://www.nytimes.com/2009/11/11/technology/companies/11oracle.htm
l> at 22 January 2010
Merger Activity Highest Since 2008, More Deals Predicted, MoneyNews.com, 4
March 2010 <http://moneynews.com/InvestingAnalysis/Merger-ActivityHighest-Deals/2010/03/04/id/351594> at 18 March 2010
Miller, John and Peppi Kiviniemi, EU Clears Oracle to Buy Sun Microsystems,
Wall Street Journal (Online), 21 January 2010
<http://online.wsj.com/article/SB100014240527487036992045750165616
37563060.html?mod=WSJ_Markets_section_Deals> at 22 January 2010
Murphy, Katharine, 'Fels at odds with Howard over merger regulation', The
Australian Financial Review (Melbourne), 13 November 2001, 3
Paczkowski, Sun CEO: Go Oracle! [Internal Memo], Digital Daily (Online) 21
January 2010 <http://digitaldaily.allthingsd.com/20100121/sun-ceo-gooracle-internal-memo/> at 22 January 2010
Pearlstein, Steven and John Mintz, 'Too Big to Fly?', Washington Post
(Washington), 4 May 1997, H01
Pearlstein, Steven, 'Europeans Relent, Back Boeing Merger', Washington Post
(Washington), 24 July 1997, E01
Rio Tinto, BHP-Billiton Finally Sign off on Pilbara Deal, The Australian, 7
December 2009 <http://www.perthnow.com.au/business/news/rio-tintobhp-billiton-finally-sign-off-on-pilbara-deal/story-e6frg2qu1225807729763> at 4 March 2010
Robertson, Jack, 'WTO Not Cut Out to be Antitrust Watchdog', Electronic Buyers'
News 18 May 1998, 10
Robertson, Jordan, EU Probes Oracle-Sun Deal, Cites Open-Source Issue, AP
Online, 3 September 2009 <http://www.highbeam.com/doc/1A1D9AFVCSG3.html> accessed 17 March 2010
Salmons, Richard and James Chessell, 'Mergers and Tax Back on the Reform
Agenda', The Age (Melbourne), 12 November 2001, 1
'Sony BMG Wins Merger Appeal at Top EU Court', New York Post (New York),
11 July 2008, at 11 July 2008
Tucker, Sundeep and Patti Waldmeir, 'Asian Antitrust Laws Threaten to Tie Up
Global Deals, Lawyers Warn', Financial Times (London), 28 July 2008, 1
Tyson, Laura DAndrea, ''McBoeing' Should be Cleared for Takeoff', Wall Street
Journal (New York), 22 July 1997, A14
PageB63
UK Competition Officials Give Green Light Coca-Cola/Cadbury Brands Deal,

Food & Drink Weekly, 7 June 1999 <http://www.allbusiness.com/retailtrade/food-beverage-stores/270777-1.html> at 9 March 2010
Unger, Henry, Coca-Cola Posts Gains Despite Snags in Australian Deal, Knight
Ridder/Tribune Business News, 8 April 1999
Wilson, Katharine, Increase in UK Merger Fees from October 2009 (1 October
2009) Bird & Bird
<http://www.twobirds.com/English/NEWS/ARTICLES/Pages/Increase_UK
_merger_fees_October_2009.Aspx> at 10 November 2009
Wolk, Martin, 'EU Issues Formal Objection to Boeing Merger', Reuters News, 22
May 1997
B2 Cases
Airtours/First Choice (IV/M1524) [2000] OJ L 93/1, [2000] CMLR 494
Amalgamated Wireless (Australasia) Ltd v McDonnell Douglas Corp (1987) 77
ALR 537
American Banana Co v United Fruit Co, 213 US 347 (1909)
Australian Competition and Consumer Commission v Singapore Airlines Cargo
Pte Ltd [2009] FCA 510.
Australian Gas Light Company v ACCC (No 3) [2003] FCA 1525
Bertelsmann AG and Sony Corporation of America v Independent Music
Publishers and Labels Association (Impala) (C-413/06 P) [2008] ECR I0000.
Boeing/McDonnell Douglas (IV/M877) [1997] OJ L 336/16
Bonython v Commonwealth [1951] AC 201
Brown Shoe Co v United States, 270 US 294 (1962)
Commissioner of Competition v Superior Propane Inc and ICG Propane Inc
(2001) FCA 104 (Canada)
Consolidated Gold Fields v Anglo-American Corp 698 F Supp 487 (SDNY 1988)
Continental Can Co Inc (1972) OJ (L7/25); Europemballage Corporation and
Continental Can Co Inc v Commission, Case 6/72 [1973] CMLR 199
Continental Ore Co v Union Carbide & Carbon Corp, 370 US 690
PageB64
Dominicus Americana Bohio v Gulf & Western Industries Inc, 473 F Supp 680,
688 (SDNY 1979)
EEOC v Arabian American Oil Co 499 US 244 (1991)
E.ON/Endesa (COMP/M.4197)
F Hoffman-La Roche Ltd v Empagran, 542 US 155 (2004)
Foley Bros Inc v Filardo 336 US 281 (1949)
FTC v Cement Inst, 333 US 683 (1947)
FTC v Motion Picture Adver. Co, 344 US 392 (1952)
Gencor Ltd v Commission (T-102/96) [1999] ECR II-753
Gencor Ltd v European Commission [1997] OJ L11/30
Gencor/Lonrho (IV/M619) [1997] OJ L 11/30, [1999] 4 CMLR 1076
General Electric Co v Commission, Case T-210/01 (Court of First Instance, 14
December 2005)
General Electric/Honeywell (COMP/M2220) [2004] OJ L48/I
Hartford Fire Insurance v California, 509 US 764 (1993)
Hilton v Guyot, 159 US 113 (1895)
Hoffmann La Roche & Co AG v Commission, Case 87/76 [1979) ECR 461
Imperial Chemical Industries Ltd v Commission, Case 48/49 [1972] ECR 619
In re Uranium Antitrust Litigation, 617 F.2d 1248 (7th Cir, 1980)
Independent Music Publishers and Labels Association (Impala, International
Association) v Commission of the European Communities (T-464/04)
[2006] ECR II-2289
Industrial Investment Development Corp v Mitsui & Co 671 F 2d 876 (5th Cir,
1982)
Laker Airways Ltd v Sabena, Belgian World Airlines, 731 F 2d 909 (DC Cir, 1984)
Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164
Mannington Mills Inc v Congoleum Corp, 595 F 2d 1287 (3rd Cir, 1979)
Metro-SB-Grobmarkte GmbH & Co KG (United Kingdom Intervening) v EC
Commission (SABA GmbH and Germany Intervening) (no 2) Case 74/84
[1987] CMLR 118
Meyer Heine Pty Limited v The China Navigation Company Ltd (1965-1966) 115
CLR 10
PageB65
Montreal Trading Ltd v Amax Inc, 661 F 2d 864 (10th Cir 1982)
National Bank of Canada v. Interbank Card Ass'n, 666 F 2d 6 (2d Cir 1981)
Omya/JM Huber (Comp/M3796) [2007] OJ L 72/24
Omya v Commission, (T-145/06) [2009] OJ C 69/81
Oracle/PeopleSoft, (Comp/M3216) [2005] OJ L 218/6
<http://ec.europa.eu/competition/mergers/cases/decisions/m3216_en.pdf
> at 15 January 2010
R v Jameson [1896] 2 QB 425
Re Queensland Co-operative Milling Association Ltd & Defiance Holdings Ltd
(1976) ATPR 40-012
Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] 1 All ER 434, 460
(House of Lords)
Rivendell Forest Products, Ltd v Canadian Forest Products, Ltd, 810 F Supp
1116 (D Colo 1993)
Seven Network Limited v News Limited [2007] FCA 1062
SS Lotus (France v Turkey) PCIJ Ser A, No. 10 (1927)
Star-Kist Foods, Inc v P J Rhodes & Co, 769 F 2d 1393 (9th Cir 1985)
Sun Chemical Group BV v Commission (T-282/06) [2007] ECR II-000, [2007] 5
CMLR 438
Synthetic Rubber, KG 26 Nov 1980, WuW/E OLG 2411
Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338
Timberlane Lumber Co v Bank of America, 549 F 2d 597 (9th Cir, 1976)
Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) ATPR 40876
Trade Practices Commission v Gillette Co (No 1) (1993) 45 FCR 366
Trade Practices Commission v Santos Ltd (1992) 38 FCR 382
Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31
United States v Aluminum Co of America, 148 F 2d 416 (2nd Cir, 1945)
United States v El Paso Natural Gas Co, 376 US 651 (1964)
United States v General Dynamics Corp 415 US 486 (1974)
United States v Microsemi Corporation (Civil Action No 1:08cv1311)
PageB66
United States v Nippon Paper Industries Co, 109 F 3d 1, 8 (1st Cir, 1997)
United States v Philadelphia National Bank, 374 US 321 (1963)
Wood Pulp [1985] 3 CMLR 474
B3
Legislation
Australia
Competition Policy Reform Act 1995 (Cth)
Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth)
Trade Practices Act 1974 (Cth)
Trade Practices Regulations 1974 (Cth)
Trade Practices (Transfer of Market Dominance) Amendment Act 1986 (Cth)
Trade Practices Legislation Amendment Act 1977 (Cth)
Trade Practices Legislation Amendment Act 1992 (Cth)
Trade Practices Legislation Amendment Act (No 1) 2006 (Cth)
Austria
Cartel Act 1993
Federal Act on the Establishment of a Federal Competition Authority 1984
(Competition Act) <http://www.bwb.gv.at/> at 9 January 2004
Form for the Notification of Concentrations
<http://www.bwb.gv.at/BWB/Gesetze/default.htm> at 9 January 2004
Unfair Competition Act 1984
Belgium
Law of 5 August 1991 on the Protection of Economic Competitions
Canada
Competition Act 1985, Chapter C-34
Foreign Extraterritorial Measures Act Incorporating the Amendments Countering
the US Helms-Burton Act 1996
PageB67
China
Anti-monopoly Law of the Peoples Republic of China (adopted 30 August 2007)
Czech Republic
Act No 143/2001 Coll., on the Protection of Economic Competition
Act No. 273/1996 Coll., on the Competence of the Office for the Protection of
Economic Competition
Act No. 63/1991 Coll., on the Protection of Economic Competition
Denmark
Consolidated Competition Act 2002
<http://www.ks.dk/english/competition/legislation/comp-act539-02> at 28
June 2002
European Union
Commission Consolidated Jurisdictional Notice under Council Regulation (EC)
No 139/2004 on the Control of Concentrations Between Undertakings
[2008] OJ C 95/1
Commission Regulation (EC) No 802/2004 Implementing Council Regulation
(EC) No 139/2004 (The Implementing Regulation) and its Annexes
(Form CO, Short Form CO and Form RS) [2004] OJ L 133, 1-39 amended
by Commission Regulation (EC) No 1033/2008 [2008] OJ L 279, 3-12
Council Regulation (EC) No 4064/89 of 21 December 1989 on the Control of
Concentrations Between Undertakings [1989] OJ L 395
Council Regulation (EC) No 139/2004 of 20 January 2004 on the Control of
Concentrations Between Undertakings [2004] OJ L 24
Treaty of Lisbon amending the Treaty on European Union and the Treaty
Establishing the European Community of 13 December 2007 [2007] OJ C
306 (entered into force 1 December 2009)
Finland
Act on Competition Restrictions (480/1992)
Act on the Finnish Competition Authority 1988
Germany
Law Against Restrictions of Competition 1957
PageB68
India
Competition Act 2002 (India)
New Zealand
Commerce Act 1986
Poland
Law Against Monopolistic Practices and Protection of Consumer Interests 1990
Switzerland
Federal Law on Cartels and Other Restrictions of Competition of 6 October 1995
Merger Control Regulation of 17 June 17 1996 (SR 251.4)
United Kingdom
Enterprise Act 2002
Enterprise Act 2002 (Merger Fees) (Amendment) Order 2009
Protection of Trading Interests Act 1980
United States
Antitrust Procedural Improvements Act 1980 (amending 15 USC 18)
Celler-Kefauver Antimerger Act 1950 (amending 15 USC 18)
Clayton Antitrust Act 1914, 15 USC 12-27; 29 USC 52-53
Federal Trade Commission Act 1914, 15 USC 41-58
Hart-Scott-Rodino Antitrust Improvements Act 1976, 15 USC 18a
International Antitrust Enforcement Assistance Act 1994, 15 USC 6201-6212
Rules, Regulations, Statements and Interpretations Under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, 16 CFR 801(90) (2005)
Sherman Antitrust Act 1890, 15 USC 1-7
Third Restatement of Foreign Relations Law (1987)
Tunney Act 1974, 15 USC 16
PageB69
B4 Treaties, Agreements, Recommendations and best

practices
B4.1 Treaties and agreements
Agreement Between Denmark, Iceland and Norway on Co-operation in
Competition Cases (entered into force 1 April 2001)
Agreement Between the European Communities and the Government of Canada
Regarding the Application of Their Competition Laws (entered into force
17 June 1999)
Agreement between the Government of Australia and the Government of the
United States of America relating to Cooperation on Antitrust Matters
[1982] ATS 13 (entered into force 29 June 1982)
Agreement Between The Government of Canada and the European Communities
Regarding The Application of Their Competition Laws
<http://europa.eu.int/comm/competition/international/bilateral/canada/agre
ement_app_comp_law_en.pdf>
Agreement between the Government of Canada and the European Communities
Regarding the Application of their Competition Laws (17 June 1999)
Agreement between the Government of Canada and the Government of the
United States of America on the Application of Positive Comity Principles
to the Enforcement of their Competition Laws (2004)
Agreement between the Government of Canada and the Government of the
United Mexican States Regarding the Application of their Competition
Laws (2001)
Agreement between the Government of the United States of America and the
Government of Canada Regarding the Application of Their Competition
and Deceptive Marketing Practices Laws (August 1995)
Agreement between the Government of the United States of America and the
European Communities Regarding the Application of their Competition
Laws (23 September 1991)
Agreement Between the Government of the United States of America and the
Government of Australia Relating to Cooperation on Antitrust Matters
(entered force 29 June 1982)
Agreement Between The Government of the United States of America and the
Government of Australia on Mutual Antitrust Enforcement Assistance
(entered into force on 27 April 1999)
PageB70
Agreement between the Government of the USA and the EC on the Application
of Positive Comity Principles in the Enforcement of their Competition Law
(4 June 1998)
Australia and New Zealand Closer Economics Relations, signed 28 March 1983,
[1983] ATS 2 (entered into force 1 January 1983)
Cooperation Arrangement Between the Commissioner of Competition (Canada)
and Her Majesty's Secretary of State for Trade and Industry and the
Office of Fair Trading in the United Kingdom Regarding the Application of
their Competition and Consumer Laws (2003)
Convention on the Organisation for Economic Co-operation and Development,
opened for signature 14 December 1960), 888 UNTS 179, entered into
force 30 September 1961
Co-operation and Co-ordination Agreement between the Australian Competition
and Consumer Commission and Papua New Guinea Consumer Affairs
Council (1999)
Co-operation and Co-ordination Agreement between the Australian Trade
Practices Commission and New Zealand Commerce Commission (1994)
January 2010
Cooperation and Coordination Arrangement Between the Taipei Economic and
Cultural Office and the Australian Commerce and Industry Office
Regarding the Application of Competition and Fair Trading Laws (entered
into force 13 September 1996)
Cooperation Arrangement Between the Commissioner of Competition (Canada),
the Australian Competition and Consumer Commission and the New
Zealand Commerce Commission Regarding the Application of Their
Competition Laws (October 2000)
January 2010
Havana Charter (1948)
<http://www.wto.org/english/docs_e/legal_e/havana_e.pdf> (did not enter
into force)
United Nations Convention on Contracts for the International Sale of Goods 1980
opened for signature 11 April 1980, 1489 UNTS 3.
PageB71
B4.2 Recommendations and Best Practices

US-EU Merger Working Group, Best Practices on Cooperation in Merger
Investigations (October 2002)
Australian Competition and Consumer Commission and New Zealand Commerce
Commission, Cooperation Protocol for Merger Review (August 2006)
OECD Council, Recommendation Concerning a Consultation and Conciliation
Procedure on Restrictive Business Practices Affecting International Trade,
3 July 1973, C (73)99/final.
OECD Council, Recommendation of the Council concerning Action Against
Inflation, 14 December 1971, C(71)205/final
OECD Council, Recommendation of the Council Concerning Action Against
Restrictive Business Practices Affecting International Trade Including
Those Involving Multinational Enterprises, 20 July 1978, C(78)133/final
OECD Council, Recommendation of the Council Concerning Cooperation
between Member Countries on Restrictive Business Practices Affecting
International Trade, 5 October 1967, C(67)53/final
OECD Council, Recommendation of the Council Concerning Effective Action
Against Hard Core Cartels, 25 March 1998, C(98)35/final
OECD Council, Recommendation of the Council Concerning Merger Review, 23
March 2005, C(2005)34/final
OECD Council, Recommendation of the Council for Co-operation between
Member Countries in Areas of Potential Conflict between Competition and
Trade Policies, 23 October 1986, C(86)65/final
OECD Council, Recommendation of the Council on Competition Assessment, 22
October 2009, C(2009)130/final
OECD Council, Recommendation of the Council on Competition Policy and
Exempted or Regulated Sectors, 25 September 1979, C(79)155/final
OECD Council, Revised Recommendation of the Council concerning Cooperation between Member Countries on Anticompetitive Practices
Affecting International Trade, 27 July 1995, C(95)130/final
OECD Council, Revised Recommendation of the Council Concerning
Cooperation between Member Countries on Restrictive Business
Practices Affecting International Trade, 25 September 1979,
C(79)154/final
OECD Council, Revised Recommendation of the Council concerning Cooperation between Member Countries on Restrictive Business Practices
affecting International Trade, 5 June 1986, C(86)44/FINAL
PageB72
B5
Other References
B5.1 Government and official documents

Australia
Commonwealth of Australia, Australia-United States' Relations: the
Extraterritorial Application of United States Laws (Joint Committee
on Foreign Affairs and Defence, Canberra, 1983)
Commonwealth of Australia, Mergers, Monopolies and Acquisitions:
Adequacy of Existing Legislative Controls (Senate Standing
Committee on Legal and Constitutional Affairs, Canberra, 1991)
(Cooney Report)
Commonwealth of Australia, Mergers, Takeovers and Monopolies:
Profiting from Competition (House of Representatives Standing
Committee on Legal and Constitutional Affairs, Canberra, May
1989) (Griffiths Report)
Evidence to Standing Committee on Legal and Constitutional Affairs, SubCommittee Workshop on Mergers, Takeovers and Monopolies, 24
October 1988 (Philip Clarke)
Treasury, Competition and Consumer Policy Division, Information Sheet
on Ministerial Consents under s 5 of the Trade Practices Act 1974
(19 June 2009) <http://www.treasury.gov.au/documents/
1072/PDF/Departmental_Procedures_as_at_19_June_09.pdf> at
25 January 2010
European Union
EU, 'Commission adopts comprehensive reform of EU Merger Control'
(2002) 11 December <http://europa.eu.int/> at 11 December
EU, Control of Major Cross-Border Mergers: Merger Control in the
European Union European Union
<http://europa.eu.int/comm/competition/citizen/citizen_mergers_en
.html> at 10 January 2004
EU, EU Competition Policy and Enlargement
<http://europa.eu/int/comm/competition/international/enlargement/
policy.html> at 10 January 2004
United Kingdom
DTI, Consumer and Competition Policy Directorate, Merger Fees:
Summary of Responses to the Consultation on Possible Changes
to the System of Charging Firms for the Costs of Merger Control
(Report URN05/1036, March 2005)
<http://www.berr.gov.uk/files/file52679.pdf> at 27 January 2010
PageB73
OFT, Merger Statistics <http://www.oft.gov.uk/shared_oft/mergers_ea02/

678502/Merger_stats.pdf> at 27 January 2010
United States
Comments on the FTC-DOJ Clearance Process before the Antitrust
Modernization Commission, 3 November 2005 (Timothy J Muris)
<http://govinfo.library.unt.edu/amc/commission_hearings/pdf/Muris
_Statement.pdf> at 30 January 2010
Congress of the United States, Letter to Assistant Attorney General,
Department of Justice, Christine Varney, 18 September 2009
Congress of the United States, Letter to Chairman of the Federal Trade
Commission, Jonathan Leibowitz, 18 September 2009
Evidence to Antitrust Modernization Commission, Hearing on International
Issues, Washington DC, 15 February 2006 (revised 2 March 2006)
(Eleanor M Fox)
<http://govinfo.library.unt.edu/amc/commission_hearings/pdf/State
ment_Fox_final.pdf> at 26 October 2009
Evidence to Antitrust, Business Rights and Competition Subcommittee,
Committee on the Judiciary, United States Senate, Washington
DC, 22 March 2000 (Joel I Klein)
<http://www.justice.gov/atr/public/testimony/4381.htm> at 14
January 2010
Evidence to International Competition Policy Advisory Committee,
Washington DC, 17 May 1999 (Joseph Winterscheid)
<http://www.justice.gov/atr/icpac/3736.htm> at 31 January 2010
Evidence to International Competition Policy Advisory Committee,
Washington DC, 3 November 1998 (Barry Hawk)
<http://www.justice.gov/atr/icpac/2232-b.htm> at 31 January 2010
Senate of the United States, 'Senate Resolution 108 - Expressing the
Sense of the Senate' (1997) 16 July S7609at 16 July
Statement for the Hearing of the Antitrust Modernization Commission:
Treatment of Efficiencies in Merger Enforcement, Washington
DC, 17 November 2005 (Charles F (Rick) Rule, Consumer
Welfare, Efficiencies, and Mergers)
<http://govinfo.library.unt.edu/amc/commission_hearings/pdf/State
ment-Rule.pdf> at 14 January 2010
Too Big to Fail?: The Role of Antitrust Law in Government-Funded
Consolidation in the Banking Industry, Hearing before the
Subcommittee on Courts and Competition Policy of the Committee
on the Judiciary, House of Representatives (111th Congress, 1st
PageB74
Session, Serial No 111-33, 17 March 2009)

<http://judiciary.house.gov/hearings/printers/111th/11133_48102.PDF> at 20 March 2010.
United States Congressional Record House of Representatives, 22 July
1997, Page H5517, House Resolution 191
United States Congressional Record Senate, 16 July 1997, S7609,
Senate Resolution 108
United States House of Representatives, 'Regarding Interference of
European Commission in Merger of Boeing Co and McDonnell
Douglas' (1997) 22 July 1997 H5517at 22 July 1997
United States, 'Regulatory Practices and Their Effect on Market Access in
a Globalizing Economy' (Submission of the United States to the
Competition Policy and Deregulation Workshop, Christchurch,
New Zealand, 30 April - 1 May 1999)
B5.2 National competition authority publications, including

guidelines
Australia
ACCC, ACCC Annual Report (2000-2001)
ACCC, Exports and the Trade Practices Act: Guideline to the
Commission's Approach to Mergers, Acquisitions and other
Collaborative Arrangements that Aim to Enhance Exports and the
International Competitiveness of Australian Industry (October
1997)
ACCC, Formal Merger Review Process Guidelines (June 2008)
ACCC, Merger Guidelines (June 1999)
ACCC, Merger Guidelines (November 2008)
ACCC, Merger Review Process Guidelines (July 2006)
ACCC, Summary of the Trade Practices Act 1974 (September 1999 ed,
1999)
ACCC, The ACCC's Approach to Mergers: A Statistical Summary (1998)
ACCC, Statement of Issues BHP Billiton Ltds Proposed Acquisition of
Rio Tinto Ltd and Rio Tinto plc, 22 August 2008
PageB75
Belgium
Economics Ministry, Presentation of the Act on the Protection of
Economic Competition (1 July 1999)
<http://mineco.fgov.be/search97cgi/s97_cgi.exe> at 4 February
2002
Canada
Competition Bureau, Efficiencies in Merger Review (2 March 2009)
Competition Bureau, Confidentiality and Mutual Assistance in Enforcing
Competition Laws (2003) <http://cb-bc.gc.ca/epic/internet/incbbc.nsf/vwGeneratedInterE/ct00067e.html> at 9 March 2004
Competition Bureau, Merger Enforcement Guidelines (1991)
Competition Bureau, Merger Enforcement Guidelines (2004)
Competition Bureau, Merger Review Performance Report (2001)
Competition Bureau, Merger Review Performance Report (2007)
Competition Bureau, Merger Review Process Guidelines (18 September
2009)
Competition Bureau, Notifiable Transactions and Advance Ruling
Certificates under the Competition Act: Procedures Guide (2000)
Competition Bureau, Options for the Internationalization of Competition
Policy - Defining Canadian Interests (1999)
<http://strategis.ic.gc.ca/SSG/ct01519e.html> at 29 May 2000
Competition Bureau, Short Form Information Notifiable Transactions
Regulations, Section 16 <http://strategis.ic.gc.ca/SSI/ct/s16e.pdf>
at 25 January 2010
Competition Bureau, Long Form Information Notifiable Transactions
Regulations, Section 17 <http://strategis.ic.gc.ca/pics/ct/s17e.pdf>
at 25 January 2010
Czech Republic
Office for the Protection of Competition, Decree of the Office for the
Protection of Competition No 368/2001 Coll Stipulating Details
Relating to the Notification of a Concentration of Undertakings
(2001) (repealed)
Office for the Protection of Competition, Decree of the Office for the
Protection of Competition No 252/2009 of 31 July 2009 Coll
Stipulating Details of a Concentration Notification (2009)
PageB76
Office for the Protection of Competition, Notice of the Notion of

Undertakings Concerned Under the Act on Protection of
Competition (current to 10 June 2009)
Office for the Protection of Competition, Notice of the Office for the
Protection of Competition on the Pre-notification Contacts with
Merging Parties (current to 10 June 2009)
Office for the Protection of Competition, Notice of the Office for the
Protection of Competition on Calculation of Turnover for the
Purpose of the Control of Concentrations Between Undertakings
(current to 10 June 2009)
Office for the Protection of Competition, Notice on the Application of the
Failing Firm Defence Concept in the Assessment of
Concentrations of Undertakings (current to 10 June 2009)
Office for the Protection of Competition, Notice on the Prohibition of
Implementation of Concentrations Prior to the Approval and
Exemptions Thereof (current to 10 June 2009)
Denmark
Danish Competition Authority, Executive Order Calculation of Turnover in
the Competition Act (No 895 of 21 September 2000)
Danish Competition Authority, Executive Order on the Notification of
Mergers (No 480 of 15 June 2005)
Danish Competition Authority, Introduction to the Danish Competition Act
<http://www.ks.dk/english/competition/legislation/guide/> at 9
March 2004
Danish Competition Authority, Notification form K2 - Notification of
Mergers (current to 2008)
European Union
Directorate General of Competition, Best Practices on the Conduct of EC
Merger Proceedings (20 January 2004)
<http://ec.europa.eu/competition/mergers/legislation/proceedings.
pdf> at 25 April 2009
Directorate General of Competition, Best Practices on the Conduct of EC
Merger Proceedings (20 January 2004)
<http://ec.europa.eu/competition/mergers/legislation/proceedings.
pdf> at 25 April 2009
PageB77
European Commission, Commission Notice on a Simplified Procedure for

Treatment of Certain Concentrations under Council Regulation
(EC) 139/2004 [2005] OJ C 56/32.
European Commission, Commission Notice on Case Referral in Respect
of Concentrations [2005] OJ C 56/5
European Commission, Commission Notice on Remedies Acceptable
Under the Council Regulation (EC) No 139/2004 and under
Commission Regulation (EC) No 802/2004 [2008] OJ C 267, 1-27
European Commission, Commission Notice on the Definition of Relevant
Market for the Purposes of Community Competition Law [1997] OJ
C 372, 5
European Commission, Commission Report to the Council and the
European Parliament on the Application of the Agreement
between the European Communities and the Government of the
United States of America Regarding the Application of their
Competition Laws 1 January 1998 to 31 December 1998' [13
August 1999] COM(99) 439 final <http://aei.pitt.edu/4939/> at 25
January 2010
European Commission, Communication from the Commission to the
Council: Report on the Functioning of Regulation No 139/2004 [18
June 2009] COM(2009) 281 final
European Commission, Communication Pursuant to Article 3(2) of
Regulation 802/2004 Implementing Council Regulation (EC) No
139/2004 on the Control of Concentrations Between Undertakings
[2006] OJ C 251/2
European Commission, COMP/M.4197 E.ON/Endesa, Commission
Decision Relating to a Proceeding Pursuant to Art 21 of Council
Reg 139/2004 on the Control of Concentrations between
Undertakings, 26 September 2006 (C (2006) 4279 final)
European Commission, EU Competition Law Rules Applicable to Merger
Control Situation as at 14 July 2009 (2009)
<http://ec.europa.eu/competition/mergers/legislation/merger_comp
ilation.pdf> at 25 January 2010
European Commission, Governance Statement of the European
Commission, 30 May 2007
<http://ec.europa.eu/atwork/synthesis/doc/governance_statement_
en.pdf> at 30 January 2010
European Commission, Guidelines on the Assessment of Horizontal
Mergers under the Council Regulation on the Control of
Concentrations between Undertakings of 5 February 2004 [2004]
OJ C 31, 5-18
PageB78
European Commission, Merger Statistics: 21 September 1990 to 31

December 2009 <http://ec.europa.eu/competition/mergers/
statistics.pdf> at 25 January 2010
European Commission, Mergers Overview, European Commission,
Competition <http://ec.europa.eu/comm/competition/
mergers/overview_en.html> at 21 September 2007.
European Commission, Report from the Commission to the Council and
the European Parliament on the application of the agreements
between the European Communities and the Government of the
United States of America and the Government of Canada
Regarding the Application of their Competition laws - 1 January
2002 to 31 December 2002 [2003] COM(2003) 500 final
European Commission, Report from the Commission to the Council and
the European Parliament on the Application of the Agreements
Between the European Communities and the Government of the
United States of America and the Government of Canada
Regarding the Application of their Competition Laws - 1 January
2000 to 31 December 2000 [29 January 2002] COM(2002)45 final
European Commission, Report on Competition Policy 2008 [23 July 2009]
COM(2009) 374 final
European Commission, Towards an International Framework of
Competition Rules: Communication from the Commission to the
Council [18 June 1996] COM(96) 284 final
<http://aei.pitt.edu/3971/> at 13 January 2010
Merger Notification and Procedures Template: European Community
(2004), International Competition Network
<http://europa.eu.int/comm/competition/mergers/others/20040726t
emplate.pdf> at 20 January 2005
Finland
Finnish Competition Authority, Abuse of Dominant position
<http://www.kilpailuvirasto.fi/cgibin/english.cgi?luku=antitrust/abuse-of-dominantposition&sivu=abuse-of-dominant-position> at 28 January 2010
Finish Competition Authority, FCAs Guidelines on the Revised Provisions
on the Control of Concentrations <http://www.kilpailuvirasto.fi/cgibin/english.cgi?luku=legislation&sivu=guidelines-control-ofconcentrations> at 28 January 2010
PageB79
Ireland
Competition Authority, Notice in Respect of Guidelines for Merger
Analysis (Decision No N/02/004, 16 December 2002)
Competition Authority, Notice in Respect of the Review of Non-notifiable
Mergers and Acquisitions (Decision No N/03/001, 30 September
2003)
Competition Authority, Revised Procedures for the Review of Mergers and
Acquisitions (February 2006)
Competition Policy Section, The General Scheme of the Competition Bill
2001 (July 1991)
Korea
Fair Trade Commission, Guideline for Review M&A (20 December 2007)
Fair Trade Commission, M&A Notification Guideline (Enacted by
Economic Planning Board Notification No 44, 13 May 1981, as
amended to 23 March 2005)
New Zealand
New Zealand Commerce Commission, Mergers and Acquisitions
Guidelines (2005)
Switzerland
Competition Commission, Evaluation of the Cartel Act: Synthesis Report
in Brief (2009)
<http://www.weko.admin.ch/dokumentation/00216/index.html?lang
=en> at 20 January 2010
Merger Notification and Procedures Template: Switzerland (updated
March 2006) <http://www.docstoc.com/docs/2641755/MERGERNOTIFICATION-AND-PROCEDURES-TEMPLATE-Switzerland>
at 28 January 2010
Turkey
Competition Board, Guidelines on the Voluntary Notification of
Agreements, Concerted Practices and Decisions of Associations
of Undertakings
<http://www.rekabet.gov.tr/dosyalar/form/form3.doc> at 20
January 2010
Competition Board, Guidelines on the Definition of Relevant Market
<http://www.rekabet.gov.tr/word/Guidelines_on_the_Definition_of_
Relevant_Market.doc> at 20 January 2010
PageB80
Presidency of the Competition Authority, Negative Clearance/Exemption

Notification Form
Presidency of the Competition Authority, Notification Form on Mergers
and Acquisitions (Form -2)
United Kingdom
Competition Commission, CC2 Merger References: Competition
Commission Guidelines (June 2003)
Competition Commission, CC3 Market Investigation References:
Competition Commission Guidelines (June 2003)
Competition Commission, CC7 - Chairman's Guidance on Disclosure of
Information in Merger and Market Inquiries (July 2003)
Competition Commission, CC8 Merger Remedies: Competition
Commission Guidelines (November 2008)
Office of Fair Trading, Market Definition (OFT 403, December 2004)
Office of Fair Trading, Mergers Jurisdictional and Procedural Guidance:
Draft Guidance Consultation Document (OFT526con, March 2008)
Office of Fair Trading, Mergers Jurisdictional and Procedural Guidance
(OFT527, June 2009)
Office of Fair Trading, Mergers Procedural Guidance (OFT526, May
2003)
United Kingdom, Merger Notification and Procedures Template: United
Kingdom (2 February 2006), International Competition Network
United States
Department of Justice, Antitrust Division Workload Statistics FY 19992008 <http://www.justice.gov/atr/public/workstats.pdf> at 28
January 2010
Department of Justice, Merger Review Process Initiative (12 October
2001, Revised 4 August 2004 and 14 December 2006)
<http://www.usdoj.gov/atr/public/220237.pdf> 20 January 2010
Department of Justice, Non-Horizontal Merger Guidelines (14 June 1984)
Department of Justice and Federal Trade Commission, Antitrust
Enforcement Guidelines for International Operations - Issued by
the US Department of Justice and the Federal Trade Commission
(1995)
PageB81
Department of Justice and Federal Trade Commission, Commentary on

the Horizontal Merger Guidelines (2006)
Department of Justice and Federal Trade Commission, Horizontal Merger
Guidelines (issued 1992; revised 8 April 1997)
Federal Trade Commission and Department of Justice, Hart-Scott-Rodino
Annual Report Fiscal Year 2008: Section 7A of the Clayton Act,
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Thirty-first
Annual Report) (2008)
Federal Trade Commission and US Department of Justice, Antitrust
Guidelines for Collaborations Among Competitors (April 2000)
Federal Trade Commission, Performance and Accountability Report:
Fiscal Year 2004 (2004)
<http://www.ftc.gov/opp/gpra/2004parreport.pdf> at 23 January
2010
<http://www.ftc.gov/opp/gpra/2009parreport.pdf> at 17 December
2009
Federal Trade Commission, Revised Jurisdictional Thresholds for Section
7A of the Clayton Act, Federal Register Vol 74 No 8, Tuesday 13
January 2009, Notices, 1687.
Federal Trade Commission, Statement of Chairman Robert Pitofsky and
Commissioners Janet D Steiger, Roscoe B Starek III and Christine
A Varney in the Matter of the Boeing Company/McDonnell
Douglas Corporation, File No 971-0051 (1 July 1997)
Federal Trade Commission, Statement of Commissioner Mary L
Azcuenaga, File No 971-0051 (1 July 1997)
Federal Trade Commission, 'Statement of Commissioner Mozelle W
Thompson: Sony Corporation of America/Bertelsmann Music
Group Joint Venture, File No 041-0054' (28 July 2004)
Federal Trade Commission, The Form and Instructions (2008) Hart-ScottRodino PreMerger Notification Program
<http://www.ftc.gov/bc/hsr/hsrform.htm> at 30 January 2010
Federal Trade Commission Premerger Notification Office, Introductory
Guide I: What is the Premerger Notification Program? An
Overview (Revised March 2009)
PageB82
Memorandum of Agreement Between the Federal Trade Commission and

the Antitrust Division of the United States Department of Justice
Concerning Clearance Procedures for Investigations (2002)
<http://www.ftc.gov/opa/2002/02/clearance/ftcdojagree.pdf> at 20
January 2010
Protocol for Coordination in Merger Investigations Between the Federal
Enforcement Agencies and the State Attorneys General
<http://www.justice.gov/atr/public/guidelines/1773.htm> at 2
January 2010 (Compact)
United States, 'Developing Cooperative Relationships - United States'
(OECD Working Party No 3 on International Cooperation, 2003)
5.3
Organisational documents
ABA Section on Antitrust Law, 'Report on the Internationalization of Competition

Law Rules: Coordination and Convergence' (2000)
APEC, 'Agreed Outcomes' (Paper presented at the APEC Conference on
Competition Policy and Law, Auckland, New Zealand, 24-26 July 1995)
APEC, 'APEC Economic Leaders' Declaration' (Presented at the APEC
Economic Leaders' Meetings, Auckland, New Zealand, 13 September
1999)
<http://www.apec.org/apec/leaders__declarations/1999.MedialibDownloa
d.v1.html?url=/etc/medialib/apec_media_library/downloads/aelm.Par.0009
.File.v1.1> at 13 January 2009
APEC, 'Regulatory Practices and Their Effect on Market Access in a Globalizing
Economy', Submission of the United States, APEC Competition Policy
and Deregulation Workshop, Christchurch, New Zealand, 30 April - 1 May
1999, <http://www.apeccp.org.tw/doc/Workshop/w1999/010usa.html> at 9
March 2004
Business and Industry Advisory Committee to the OECD (BIAC) and International
Chamber of Commerce (ICC), 'Recommended Framework for Best
Practices in International Merger Control Procedures' (4 October 2001)
<http://www.biac.org/statements/comp/BIAC-ICCMergerPaper.pdf> at 15
January 2010
ECA, Principles on the Application, by National Competition Authorities within the
ECA Network, of Article 22 of the EC Merger Regulation' (January 2005)
<http://www.bundeskartellamt.de/wDeutsch/download/pdf/Merkblaetter/M
erkblaetter_englisch/ECA_Principles.pdf > at 15 January 2010
PageB83
ECA, 'The Exchange of Information between Members on Multijurisdictional

Mergers: Procedures Guide'
<http://www.concorrencia.pt/Download/ECA_procedures_guide_post_Ath
ens.pdf> at 15 January 2010
ECN, 'ECN Working Group on Cooperation Issues: Results of the questionnaire
on the reform of Member States (MS) national competition laws after EC
Regulation NO 1/2003 (as of April 14, 2008)' (ECN, 2008)
ICC, 'ICC recommendations to the International Competition Policy Advisory
Committee (ICPAC) on exchange of confidential information between
competition authorities in the merger context' (21 May 1999)
<http://www.iccwbo.org/collection13/folder47/id405/printpage.html?newsx
sl=&articlexsl=> at 15 January 2010
ICN, 'Defining Merger Transactions for Purposes of Merger Review' (Merger
Working Group, 2007)
<http://www.internationalcompetitionnetwork.org/uploads/library/doc327.p
df> at 15 January 2010
ICN, 'Final Analytical Framework for Merger Review Discussion Paper (Annex)'
(American Bar Association and International Competition Network, 2002)
ICN, 'Guiding Principles for Merger Notification and Review' (Merger Working
Group, 2002)
ICN, ICN Investigative Techniques Handbook for Merger Review (Merger
Working Group, Investigative Techniques Subgroup, June 2005)
ICN, Implementation of the ICN Recommended Practices for Merger Notification
and Review Procedures (April 2005)
<http://www.internationalcompetitionnetwork.org/bonn/Mergers_WG/SG1
_Notification_Procedures/Implementation.pdf> at 12 July 2005
ICN, 'Information Requirements for Merger Notification' (Merger Working Group,
June 2009)
ICN, Memorandum on the Establishment and Operation of the International
Competition Network (2001)
<http://www.internationalcompetitionnetwork.org/> 2001
ICN, Merger Guideline Workbook (Merger Working Group, April 2006)
PageB84
ICN, 'Merger Notification Filing Fees' (Mergers Working Group, April 2005)
ICN, Merger Remedies Review Project (Merger Working Group, Analytical
Framework Subgroup, June 2005)
df> at 2 February 2010
ICN, 'Project on Merger Guidelines' (Merger Working Group, Analytical
Framework Subgroup, Report for the third ICN Annual Conference in
Seoul, April 2004)
ICN, 'Recommended Practices for Merger Analysis' (Merger Working Group
2008, amended 2009)
<http://www.reseauinternationaldelaconcurrence.org/media/library/Cartels
/Merger_WG_1.pdf> at 27 January 2010
ICN, 'Recommended Practices for Merger Notification Procedures' (Merger
Working Group 2002, amended 2003, 2004, 2005, 2006)
df > at 15 January 2010
ICN, 'Report on the Costs and Burdens of Multijurisdictional Merger Review'
(Mergers Working Group, Notification and Procedures Subgroup,
November 2004)
ICN, 'Setting Notification Thresholds for Merger Review' (Merger Working Group,
Notification and Procedures Subgroup, Report to the ICN Annual
Conference, Kyoto, Japan, April 2008)
ICN, 'The Analytical Framework for Merger Control: Final paper for ICN annual
conference' (ICN Merger Working Group: Analytical Framework Subgroup, 2002)
ICN, 'Waivers of Confidentiality in Merger Investigations' (International
Competition Network,
ICN, 'World Antitrust Authorities Call for Improved Merger Review, Advocacy and
Capacity Building at 2nd Annual International Competition Network
Conference' (2003) 26 June
<http://www.internationalcompetitionnetwork.org/news/june262003.html
(accessed 27 June 2003)> at 26 June
ICPAC, 'International Competition Policy Advisory Committee Meeting, Minutes'
(Department of Justice, 1999)
PageB85
ICPAC, 'International Competition Policy Advisory Committee to the Attorney

General and Assistant Attorney General for Antitrust - Final Report'
(Department of Justice, United States, 2000)
IFCAS, 'A Mid-Term Report Card on Antitrust in the Bush Administration' (Paper
presented at Loyola University Chicago School of Law, Rubloff Reception
Room, 2002)
OECD Committee on Competition Law and Policy, 'CLP Report on Positive
Comity' (Report No DAFFE/CLP(99)/19, May 1999)
OECD Competition Committee, Industrial Policy, Competition Policy and
National Champions (Background Note Prepared by David Spector,
Antoine Chapsal and Laurent Eymard, No DAF/COMP/GF(2009)1/REV1,
16 Feb 2009)
OECD Competition Committee, '100th Meeting of the Competition Committee:
Executive Summary of the Discussion'
(DAF/COMP/M(2008)1/ANN3/FINAL, 14 May 2008)
OECD, '"Hard Core" Cartels' (1998) 30 March 1998
<http://www.oecd.org/daf/clp/recommendations/nw98-33a.htm> at 30
March 1998
OECD, Dynamic Efficiencies in Merger Analysis (Best Practice Roundtable on
Competition Policy, DAF/COMP(2007)41, 5 May 2008)
OECD, Efficiency Claims in Mergers and Other Horizontal Agreements (Best
Practice Roundtable on Competition Policy, OCDE/GD(96)65, 1996)
OECD, Failing Firm Defence (Best Practice Roundtable on Competition Policy,
OCDE/GD(96)23, 1996) <
http://www.oecd.org/dataoecd/35/6/1920253.pdf> at 27 January 2010
OECD, Media Mergers (Best Practice Roundtable on Competition Policy,
DAF/COMP(2003)16, 19 September 2003)
OECD, Merger Remedies (Best Practice Roundtable on Competition Policy,
DAF/COMP(2004)21, 23 December 2004)
OECD, Merger Review in Emerging High Innovation Markets (Best Practice
Roundtable on Competition Policy, DAFFE/COMP(2002)20, 24 January
2003) <http://www.oecd.org/dataoecd/40/0/2492253.pdf> at 27 January
2010
PageB86
OECD, Mergers in Financial Services (Best Practice Roundtable on Competition

Policy, DAFFE/CLP(2000)17, 15 September 2000)
OECD, Portfolio Effects in Conglomerate Mergers (Best Practice Roundtable on
Competition Policy, DAFFE/COMP(2002)5, 24 January 2004)
OECD, Report on Notification of Transnational Mergers' (Committee on
Competition Law and Policy, DAFFE/CLP(99)2/FINAL, Feb, 1999)
OECD, Substantive Criteria Used in the Assessment of Mergers (Best Practice
Roundtable on Competition Policy, DAFFE/COMP(2003)5, 11 February
2003) <http://www.oecd.org/dataoecd/54/3/2500227.pdf> at 27 January
2010
OECD, Vertical Mergers (Best Practice Roundtable on Competition Policy,
DAF/COMP(2007)21, 12 November 2007)
OECD, 'Airline Mergers and Alliances' (DAFFE/CLP(2000)1, OECD, 2000)
OECD, Competition and Trade Policies - Their Interaction (1984)
OECD, 'Complementaries Between Trade and Competition Policies'
(COM/TD/DAFFE/CLP(98)98/FINAL, OECD, Joint Group on Trade and
Competition, 1999)
OECD, 'Country Report - Austria' (OECD, 1999-2000)
OECD, 'Country Report - Belgium' (OECD, 1999)
OECD, 'Country Report - Czech Republic' (OECD, 1999)
OECD, 'Framework for the Design and Implementation of Competition Law and
Policy' (Paper presented at the Competition Policy and Law, Auckland,
New Zealand, 24-26 July 1995 1995)
OECD, 'Glossary of Industrial Organisation Economics and Competition Law'
OECD, Hard Core Cartels: Recent Progress and Challenges Ahead (2003)
OECD, 'Historical Development of Competition Laws' (Paper presented at the
Competition Policy and Law, Auckland, New Zealand, 24-26 July 1995
1995)
OECD, 'Issues for Trade and Competition in the Global Context' (2003) 5(3)
OECD Journal of Competition Law and Policy 7
OECD, 'OECD 1998 Recommendations on Hard-Core Cartels' (1999) 4(1)
Agency 37
PageB87
OECD, 'OECD Council Meeting at Ministerial Level - Communique' (1998) 28

April 1998 <http://www.oecd.org/daf/clp/recommendations/nw98-51a.htm
(1 May 2000)> at 28 April 1998
OECD, 'OECD Council Meeting at Ministerial Level - Communique' (1998) 28
April 1998 <http://www.oecd.org/daf/clp/recommendations/nw98-51a.htm
(16 July 2000)> at 28 April 1998
OECD, OECD Organises First Global Forum on Competition (2001)
<http://www.oecd.org/oecd/pages/home/displaygeneral/0,3380,ENdocument-2-nodirectorate-no-20-7537-2,FF.html> at 20 November 2001
OECD, 'OECD Technical Assistance in the Field of Competition Policy 19901999' (OECD, 2000)
OECD, 'Outline of (A) Core Principles, Common Approaches and Common
Standards and (B) Bilateral and Multilateral Approaches'
(Com/TD/Daffe/CLP(98)97/Final, OECD, Joint Group on Trade and
Competition, 1999)
OECD, 'Policy Brief: Economic Survey of Belgium, 2000' (OECD, 2001)
OECD, 'Report on Notification of Transnational Mergers'
(DAFFE/CLP(99)2/FINAL, OECD Committee on Competition Law and
Policy, 1999)
OECD, 'Substantive Criteria Used for the Assessment of Mergers' (OECD, 2002)
OECD, 'The Need for Anti-cartel Enforcement and Merger Control, Facilitated by
International Co-operation' (2004) 6(1&2) OECD Journal of Competition
Law and Policy 68
OECD, Trade and Competition Policies: Options for a Greater Coherence (2001)
UNCTAD, 'A Week of Competition Policy - Note to correspondents No 26' (1998)
<http://www.unctad.org/en/press/nc9826.htm>
UNCTAD, 'Agreed Conclusions of the Intergovernmental Group of Experts on
Competition Law and Policy at its Second Session' (GE.99-52069, United
Nations, 1999)
UNCTAD, Calendar of Meetings for the Remainder of 2000 and the First Quarter
of 2001 (2000) <http://www.unctad.org/en/special/cale2000.htm> at 11
July 2000
UNCTAD, 'Competition Cases Involving More Than One Country'
(TD/B/COM.2/CLP/9, United Nations, 1999)
UNCTAD, 'Continued Work on the Elaboration of a Model Law or Laws on
Restrictive Business Practices - Draft Commentaries to Possible
PageB88
Elements for Articles of a Model Law or Laws' (GE.98-50201, UNCTAD,

1998)
UNCTAD, Directory of Competition Authorities (UNCTAD Secretariat, 2000)
<http://www.unctad.org/en/docs/c2clp99d16.en.pdf (11 July 2000)> at 11
July 2000
UNCTAD, 'Empirical Evidence of the Benefits From Applying Competition Law
and Policy Principles to Economic Development in Order to Attain Greater
Efficiency in International Trade and Development' (GE.98-50801, United
Nations Intergovernmental Group of Experts on Competition Law and
Policy, 1998)
UNCTAD, 'Experiences Gained so far on International Cooperation on
Competition Policy Issues and the Mechanisms Used' (GE.99-51084,
United Nations, 1999)
UNCTAD, 'Experiences Gained So Far With International Cooperation on
Competition Policy Issues and the Mechanisms Used'
(TD/B/COM.2/CLP/3, UNCTAD, 1998)
UNCTAD, 'Handbook on Competition Legislation' (GE.97-52191, UNCTAD,
1997)
UNCTAD, 'Handbook on Competition Legislation' (GE.98-52610, United Nations,
1998)
UNCTAD, Intergovernmental Group of Experts on Competition Law and Policy
Agenda (United Nations 1999) <http://www.unctad.org/en/special/
c2law2ag.htm> at 24 April 2000
UNCTAD, 'Issues Related to Competition Law of Particular Relevance to
Development - Preparations for a Handbook on Competition Legislation'
(GE.99-54066, United Nations, 1999)
UNCTAC, Model Law on Competition (TD/RBP/Conf.5/7/Rev.2, UNCTAD 2004)
UNCTAD, Model Law on Competition: Substantive Elements for a Competition
Law Including Commentaries and Alternative Approaches
(TD/RBP/CONF.5/7/Rev.3, UNCTAD, 2007)
UNCTAD, Note to Correspondents No. 48 - Promoting a Competition Culture
(1997) <http://www.unctad.org/en/press/nc9748.htm> at 11 July 2000
UNCTAD, 'Preliminary Assessment of the Operation of the Set of Multilaterally
Agreed Equitable Principles and Rules for the Control of Restrictive
Business Practices since the Third Review Conference' (GE.99-51070,
United Nations, 1999)
PageB89
UNCTAD, Regional Seminars and Events (2000)

<http://www.unctad.org/en/subsites/cpolicy/futurevents.htm> at 11 July
2000
UNCTAD, 'Report of the Expert Meeting on Competition Law and Policy' (GE.9850003, UNCTAD, 1997)
UNCTAD, 'Report of the Intergovernmental Group of Experts on Competition Law
and Policy on its second session' (GE.99-52295, United Nations, 1999)
UNCTAD, 'Report of the Pre-UNCTAD X Seminar on the Role of Competition
Policy for Development in Globalizing World Markets (Geneva, 14-15
June 1999)' (GE.99-52746, United Nations, 1999)
UNCTAD, 'Review of Technical Assistance, Advisory and Training Programmes
on Competition Law and Policy' (GE.99-51077, United Nations, 1999)
UNCTAD, 'Review of Technical Assistance, Advisory and Training Programmes
on Competition Law and Policy' (TD/B/COM.2/CLP/2, UNCTAD, 1998)
UNCTAD, Role of Competition Policy for Development in Globalizing World
Markets - Executive Summary and Highlight of the Seminar (PreUNCTAD X Seminar) (1999) <http://www.unctad10.org/preconfevents/clpolicy.en.htm (11 July 2000)> at 11 July 2000
UNCTAD, 'The Set of Multilaterally Agreed Equitable Principles and Rules for the
Control of Restrictive Business Practices' (1980) 22 April 1980
<http://www.unctad.org/en/subsites/cpolicy/cpset.htm (24 April 2000)> at
22 April 1980
UNCTAD, 'United Nations Conference on Trade and Development - Plenary Summary' (Paper presented at the United Nations Conference on Trade
and Development - Tenth Session, Bangkok, 12-19 February 2000)
WTO, Day 5: Conference Ends Without Consensus (Press Release, 14
September 2003)
<http://www.wto.org/english/thewto_e/minist_e/min03_e/min03_14sept_e.
htm#statement> at 30 December 2009
WTO, Doha WTO Ministerial 2001: Ministerial Declaration adopted on 14
November 2001, WTO Doc WT/MIN(01)/DEC/1 (2001)
<http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm>
at 30 December 2009
WTO, Interaction between Trade and Competition Policy (2009) World Trade
Organization <http://www.wto.org/english/tratop_e/comp_e/comp_e.htm>
at 24 December 2009
PageB90
WTO, Members and Observers (2010) World Trade Organization

<http://www.wto.org/english/theWTO_e/whatis_e/tif_e/org6_e.htm> at 8
January 2010
WTO, Tarrifs (2010) World Trade Organization
<http://www.wto.org/english/tratop_e/tariffs_e/tariffs_e.htm> at 24 January
2010
WTO, Text of the July Package the General Councils post-Cancn Decision,
WTO Doc, WT/L/579 (2 August 2004)
<http://www.wto.org/english/tratop_e/dda_e/draft_text_gc_dg_31july04_e.
htm> at 30 December 2009
WTO, Trade and Competition Policy: Working Group Set up by Singapore
Ministerial (1999) World Trade Organization
<http://www.wto.org/english/thewto_e/minist_e/min99_e/english/about_e/
16comp_e.htm> at 22 June 2000
WTO, 'World Trade Organization: Ministerial Conference, Singapore, 9-13
December 1996: Singapore Ministerial Declaration' (Press Release
WT/MIN(96)/DEC, 18 December 1996)
<http://www.wto.org/english/news_e/pres96_e/wtodec.htm> at 22 July
2000
5.4
Press releases
Australian Competition and Consumer Commission, ACCC Not to Oppose BHP

Billtons [sic] Proposed Acquisition of Rio Tinto(Media Release NR
279/08, 1 October 2008)
Australian Competition and Consumer Commission, ACCC Not to Oppose
Proposed Acquisition of Hans Continental Smallgoods by Primo (Press
Release NR 032/09, 18 February 2009)
Australian Competition and Consumer Commission, ACCC to Publish Reasons
for its Merger Decisions (Media Release 238/03, 12 November 2003)
Australian Competition and Consumer Commission, ACCC Opposes Revised
Coke/Schweppes Acquisition (Press Release MR 089/99, 8 June 1999)
Australian Competition and Consumer Commission, ACCC Opposes the CocaCola/Schweppes Acquisition (Media Release MR 35/98, 8 April 1999)
Australian Competition and Consumer Commission, ACCC Will Not Oppose
Proposed Acquisition of Wyeth by Pfizer after Proposed Sale of Animal
Health Assets (Media Release NR 241/09, 30 September 2009)
PageB91
BHP Billiton, BHP Billiton and Rio Tinto Sign Binding Agreements on Iron Ore
Production Joint Venture (Press Release 22/09, 5 December 2009)
BHP Billiton, BHP Billiton Announces Early Termination of HSR Waiting Period
for Its Proposed Acquisition of Rio Tinto (Press Release 23/08, 3 July
2008)
BHP Billiton, BHP Billiton Offer for Rio Tinto Lapses (Press Release 41/08, 27
November 2008)
Commissions Decision Regarding the Proposed Transaction Between
Oracle and Sun (Press Release, 9 November 2009)
Department of Justice (US), Justice Department Clears WorldCom/MCI Merger
after MCI Agrees to Sell its Internet Business: Largest Divestiture of
Company in Merger History (Press Release, 15 July 1998)
Department of Justice (US), 'Attorney General Signs Antitrust Assistance
Agreement With Australia' (Press Release, 27 April 1999)
Department of Justice (US), 'Justice Department Announces New Procedure to
Coordinate Merger Antitrust Investigations with States' (Press Release, 6
March 1992)
Department of Justice (US), Justice Department Reaches Settlement with
Microsemi Corp: Divestiture Will Restore Competition in Markets for
Semiconductor Devices Used in Critical Military and Space Applications
(Press Release, 20 August 2009)
Department of Justice (US), 'Justice Department Requires Sardines Divestiture in
Connors Bros Acquisition of Bumble Bee' (Press Release, 31 August
2004)
Department of Justice, US and Foreign Antitrust Officials Launch International
Competition Network - New International Venue Will Assist in Global
Convergence on Important Antitrust Enforcement Issues (Press Release,
25 October 2001)
Department of Justice, 'Attorney General Signs Antitrust Cooperation Agreement
with Brazil' (Press Release, 26 October 1999)
Department of Justice, 'F. Hoffmann-La Roche Agrees to Pay $500 million,
Highest Criminal Fine Ever' (Press Release, 20 May 1999)
Emerson, Craig, Government to Secure Powers to Deal with Creeping
Acquisitions (Press Release, 22 January 2010)
European Commission, Antitrust: Commission Opens Formal Proceedings
Concerning Iron Ore Production Joint Venture Between BHP Billiton and
Rio Tinto (Press Release IP/10/45, 25 January 2010)
PageB92
European Commission, Commission acts to Prevent Discrimination between

Airline Computer Reservation Systems (Press Release, IP/00/835, 25
July 2000)
European Commission, Commission Clears Merger of Agrochemical Businesses
of AstraZeneca and Novartis, Subject to Substantial Divestitures (Press
Release IP/00/844, 26 July 2000)
European Commission, Commission Clears Oracles Takeover Bid for
PeopleSoft (Press Release IP/04/1312, 26 October 2004)
European Commission, Commission Gives Conditional Approval to AOL/Time
Warner Merger (Press Release IP/00/1145, 11 October 2000)
European Commission, Commission opens Procedure against Air France for
Favouring Amadeus Reservation System (Press Release, IP/99/171, 15
March 1999)
European Commission, Commissioner Monti Dismisses Criticism of
GE/Honeywell Merger Review and Rejects Politicisation of the Case
(Press Release IP/01/855, 18 June 2001)
European Commission, Mergers: Commission Clears Oracles Proposed
Acquisition of Sun Microsystems (Press Release IP/10/40, 21 January
2010)
European Commission, Mergers: Commission Decides that Spanish Measures in
Proposed E.ON/Endosa Takeover Violate EC Law (Press Release
IP/06/1853, 20 December 2006)
European Commission, Mergers: Commission Fines Electrobel 20 Million Euros
for Acquiring Control of Compagnie Nationale du Rhne without Prior
Commission Approval, (Press Release IP/09/895, 10 June 2009)
European Commission, Mergers: Commission Opens Consultations on Review
of Merger Regulation (Press Release IP/08/1591, 28 October 2008)
European Commission, Mergers: Merger Regulation Contributes to More
Efficient Merger Control in EU (Press Release IP/09/963, 18 June 2009)
European Commission, 'Mergers: Commission Confirms Approval of Recorded
Music Joint Venture Between Sony and Bertelsmann after Reassessment Subsequent to Court Decision' (Press Release IP/07/1437, 3
October 2007)
European Commission, 'Mergers: Commission Fines Electrabel 20 million euros
for acquiring control of Compagnie Nationale du Rhone without Prior
Commission approval (Press Release IP/09/895, 20 June 2009)
European Commission, The Commission Prohibits GEs Acquisition of
Honeywell (Press Release IP/01/939, 3 July 2001)
PageB93
European Commission, The Court of First Instance Annuls the Decision

Authorising the Creation of Sony BMG (Press Release CJE/06/60, 13
July 2006)
Federal Trade Commission (US), 'Attorney General Signs Antitrust Assistance
Agreement with Australia (Press Release, 27 April 1999)
Federal Trade Commission (US), 'Chairman, Commissioners Issue Statement on
Endocare, Inc's Announcement That it has Terminated its Merger
Agreement with Galil Medical Ltd' (Press Release, 9 June 2009)
Federal Trade Commission (US), Commission Announces Revised Filing
Thresholds for Clayton Act Antitrust Reviews (Press Release, 19 January
2010)
Federal Trade Commission (US), Federal Trade Commission Clears Boeing Cos
Acquisition of Hughes Space and Communications: Transaction Involves
Companies Satellite and Launch Vehicle Operations Divisions (Press
Release, 27 September 2000)
Federal Trade Commission (US), Federal Trade Commission Clears
Combination of Novartis AGs and Astrazenecas Agricultural Chemical
Business: Divestitures to Bayer AG and Dow Agrosciences Will Ensure
Continued Competition (Press Release, 1 November 2000)
Federal Trade Commission (US), FTC Approves AOL/Time Warner with
Conditions: Competitive Concerns Addressed Through Open Access and
Interactive Television Provisions, DSL Marketing Requirements (Press
Release, 14 December 2000)
Federal Trade Commission (US), 'FTC Closes Investigation of Joint Venture
Between Bertelsmann AG and Sony Corporation of America' (Press
Release, 28 July 2004)
Federal Trade Commission (US), FTC Obtains $1.4 Million Civil Penalty for
Premerger Filing Violations (Press Release, 23 June 2009)
Federal Trade Commission (US), FTC Settlement Preserves Competition in
Global Markets for Rock Processing Equipment (Press Release, 7
September 2001)
Federal Trade Commission (US), JC Penney to Divest 161 Drug Stores in the
Carolinas to Settle FTC Antitrust Chargs Over Acquisitions of Eckerd and
Certain Rite Aid Stores (Press Release, 9 December 1996)
Federal Trade Commission (US), 'Reforms to the Merger Review Process:
Announcement by Deborah Platt Majoras, Chairman, Federal Trade
Commission' (16 February 2006)
<http://www.ftc.gov/os/2006/02/mergerreviewprocess.pdf > at 16
February 2006
PageB94
Federal Trade Commission (US), 'United States and European Communities

Sign Agreement on "Positive Comity" in Antitrust Enforcement' (Press
Release, 4 June 1998)
Federal Trade Commission, 'Chairman, Commissioners Issue Statement on
Endocare, Inc.s Announcement That it has Terminated its Merger
Agreement with Galil Medical Ltd (9 June 2009)
Finnish Competition Authority, Nordic Competition Authorities to Co-operate
More Closely (Press Release, 17 December 1999)
Klein, Joel I, Statement of Assistant Attorney General Joel I Klein (Press
Release, 20 May 1999)
Mallesons Stephen Jaques, Chinas Merger Control Laws an Event of Olympic
Proportions (Alert, 22 August 2009)
Office of Fair Trading (UK), 'Easier Procedures for Multi-National Mergers' (Press
Release No 40/97, 29 September 1997)
Oracle, Oracle Makes Commitments to Customers, Developers and Users of
MySQL (Press Release, 14 December 2009)
<http://www.oracle.com/us/corporate/press/042364> at 22 January 2010
White & Case LLP, White & Case Global Merger-Control Survey Finds FloodTide May Be Ebbing After Years on the Rise (Press Release, 16 January
2003)
5.5
Theses
Dastory, Linda, An Event Study of the Merger Proposal Between BHP-Billiton and
Rio-Tinto (Masters Thesis, Lule University of Technology, 2009)
Giannino, Michele, International Cooperation and the Regulation of Transnational
Mergers (D Phil Thesis, Queen Mary College of University of London,
2006)
Noonan, Chris, The Emerging Principles of International Competition Policy (D
Phil Thesis, University of Auckland, 2004)
Steiner, Mark, Economics in Antitrust Policy: Freedom to Contract v Freedom to
Compete (D Phil Thesis, University of Zurich, 2007)
Wilson, Joseph, Globalization and the Limits of National Merger Control Laws:
Gaps in Global Governance and the Need for an International Merger
Control Regime (Doctor of Civil Law Thesis, McGill University, 2002)
PageB95
5.6
Submissions to Reviews and Inquiries
AAMI, Submission to the Review of the Competition Provisions of the Trade

Practices Act 1974, Public Submission 69, Trade Practices Act Review
2002
AAPT Limited, Submission to the Review of the Competition Provisions of the
Trade Practices Act 1974, Public Submission 160, Trade Practices Act
Review 2002
ACCC, Submission to the Review of the Competition Provisions of the Trade
2002
Allens Arthur Robinson, Submission to the Review of the Competition Provisions
of the Trade Practices Act 1974, Public Submission 162, Trade Practices
Act Review 2002
Armitage, P Submission to the Review of the Competition Provisions of the Trade
2002
Association of Consulting Engineers Australia, Submission to the Review of the
Competition Provisions of the Trade Practices Act 1974, Public
Submission 89, Trade Practices Act Review 2002
Australia and New Zealand Banking Group Limited (ANZ), Submission to the
Review of the Competition Provisions of the Trade Practices Act 1974,
Public Submission 91, Trade Practices Act Review 2002
Australian Bankers Association, Submission to the Review of the Competition
Provisions of the Trade Practices Act 1974, Public Submission 118, Trade
Practices Act Review 2002
Australian Consumers Association (ACA), Submission to the Review of the
Australian Industry Group, Submission to the Review of the Competition
Boswell, Senator R, Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 129, Trade Practices
Act Review 2002
BP Australia, Submission to the Review of the Competition Provisions of the
Review 2002
PageB96
Business Council of Australia, Submission to the Review of the Competition

Provisions of the Trade Practices Act 1974, Towards Prosperity, Public
Business Law Committee of the Law Council of Australia, Submission to the
Brunt, Maureen, Submission to the Review of the Competition Provisions of the
Review 2002
Canberra Consumer Inc, Submission to the Review of the Competition Provisions
Act Review 2002
Clayton Utz, Submission to the Review of the Competition Provisions of the
Review 2002
Commonwealth Bank, Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 96, Trade Practices Act
Review 2002
Commonwealth Consumer Affairs Advisory Council (CCAAC), Submission to the
Communications Law Centre, Submission to the Review of the Competition
CSR Limited, Submission to the Review of the Competition Provisions of the
Review 2002
Department of Transport and Regional Services, Submission to the Review of the
Duke Energy Australia Pty Ltd, Submission to the Review of the Competition
ExxonMobil, Submission to the Review of the Competition Provisions of the
Review 2002
Fair Trading Coalition (A Coalition of Small Business for Trade Practices Act
Reform), Submission to the Review of the Competition Provisions of the
PageB97
Review 2002
Freehills, Submission to the Review of the Competition Provisions of the Trade
2002
Gilbert, Ron, Submission to the Review of the Competition Provisions of the
Review 2002
Independent Paper Group, Submission to the Review of the Competition
International Banks and Securities Association of Australia (IBSA), Submission to
the Review of the Competition Provisions of the Trade Practices Act 1974,
Law Council of Australia, Supplementary Submission to the Review of the
Masterman, G, Submission to the Review of the Competition Provisions of the
Review 2002
McComas, W Robert, Submission to the Review of the Competition Provisions of
the Trade Practices Act 1974, Public Submission 75, Trade Practices Act
Review 2002
Minerals Council of Australia, Submission to the Review of the Competition
Morgan, A and J Hoggett (Institute of Public Affairs Ltd), Submission to the
National Association of Retail Grocers of Australia (NARGA), Submission to the
National Association of Retail Grocers of Australia, Supplementary Submission 2
to the Review of the Competition Provisions of the Trade Practices Act
1974, Public Submission 206, Trade Practices Act Review 2002
National Farmers Federation, Submission to the Review of the Competition
PageB98
Optus, Submission to the Review of the Competition Provisions of the Trade

2002
Pengilley, Warren, Submission to the Review of the Competition Provisions of the
Review 2002
Productivity Commission, Submission to the Review of the Competition
Riemenschneider, Kristen, New Economy: Antitrust Review of Merger Analysis
Using Innovation Markets, Submission to Antitrust Modernization
Commission (18 May 2006)
<http://govinfo.library.unt.edu/amc/public_studies_fr28902/new_economy
_pdf/060518_Riemenschneider_student_paper_New_Economy.pdf> at
20 January 2010
Securities Institute of Australia, Submission to the Review of the Competition
SFE Corporation Limited, Submission to the Review of the Competition
Shell Australia, Submission to the Review of the Competition Provisions of the
Review 2002
Small Business Development Corporation (WA), Submission to the Review of the
Spier Consulting Pty Ltd, Submission to the Review of the Competition Provisions
Act Review 2002
State Chamber of Commerce (NSW), Submission to the Review of the
Telstra, Submission to the Review of the Competition Provisions of the Trade
2002
UBS Warburg Australia Ltd, Submission to the Review of the Competition
PageB99
United Energy, Submission to the Review of the Competition Provisions of the

Review 2002
Victorian Government, Submission to the Review of the Competition Provisions
of the Trade Practices Act 1974, A Competitive and Fair Marketplace,
5.7
Online sources
American Antitrust Institute, Centralizing Merger Controls (25 June 2009)

Summary of Session at 10th Annual Conference
<http://www.antitrustinstitute.org/archives/files/Breakout%20ReportMerger%20Controls_073020091424.pdf > at 15 January 2010
Arden, John, Record Number of Jurisdictions Regulate Mergers, New Aspen
Publication Finds (8 January 2009) Trade Regulation Talk
<http://traderegulation.blogspot.com/2009/01/record-number-ofjurisdictions-regulate.html> at 21 January 2010
Baylis, Neil, ICN Sets Out Recommendations for Merger Control Analysis (2009)
K&L Gates: Antitrust Trade and Regulation Alert
<http://www.klgates.com/files/Publication/c3e415d3-f1eb-4d21-a8fe0280e41b38e7/Presentation/PublicationAttachment/6444cdda-2eea-4f258f98-27e8121f4f77/Antitrust_alert_0709.pdf> at 16 November 2009
Berends, Boyd, Antitrust Law in a Global Economy (1995) Federal Trade
Commission <http://www.ftc.gov/opp/global/berends.htm> at 17 January
2000
Canadas New Merger Control Law (14 January 2010) Competition Law Canada
<http://www.ipvancouverblog.com/2010/01/merger-control-in-canada/> at
22 January 2010
Corbett, Richard, Ireland has a Diplomatic Victory but the Real Winner is Europe
(12 December 2008) euobserver.com
<http://euobserver.com/18/27296?print=1> at 22 January 2010
Corkery, Michael, Putting the Sun-Oracle Antitrust Case in Perspective (20
November 2009) The Wall Street Journal Blogs
<http://blogs.wsj.com/deals/2009/11/10/putting-the-sun-oracle-antitrustcase-in-perspective/tab/article/> at 22 January 2010
CUTS, Multilateral Competition Agreement (2003) CUTS: Centre for International
Trade, Economics and Environment
<http://www.luc.edu/law/academics/special/center/antitrust/cuts03.pdf> at
27 November 2003
PageB100
CUTS, National Champions: National Interests vs Competition: Where to Strike

the Balance? (August 2003) CUTS: Centre for International Trade,
Economics and Environment <http://cuts.org/CCIER-8-2003pdf> at 27
November 2003
CUTS, The Role of International Cooperation in Building an Effective Competition
Regime (June 2003) CUTS: Centre for International Trade, Economics
and Environment <http://cuts.org/CCIER-6-2003pdf> at 27 November
2003
Duso, Tomaso, Assessing Merger Control Decisions: The Role of Competitors
(30 July 2008) VOX <http://www.voxeu.org/index.php?q=note/1488> at 16
February 2009
Field Fisher Waterhouse, Treaty of Lisbon: All Change for 2010 (2009) Field
Fisher Waterhouse <http://www.ffw.com/publications/all/alerts/treaty-oflisbon.aspx> at 20 January 2010
F M Scherer (2009) Harvard Kennedy School Faculty and Staff Directory
<http://www.hks.harvard.edu/about/faculty-staff-directory/f.-m.-scherer> at
31 December 2009
Frederic M Scherer (2009) Federal Trade Commission
<http://www.ftc.gov/be/rt/biop1scherer.pdf at 31 December 2009
Graham, Edward M and Richardson, J David, A US-EU Road Toward
Multilateralism in International Competition Policy (1999) <http://dns.usisisrael.org.il/publish/journals/economic/february99/iie.htm> at 1 (February)
4
International Law (2009) Encyclopdia Britannica
<http://www.britannica.com/EBchecked/topic/291011/international-law> at
9 October 2009
Joenpolvi, Katri, Antitrust Encyclopedia: Finland (November 2009) Concurrences
<http://www.concurrences.com/nr_one_question.php3?id_rubrique=571#
ancre33> at 16 February 2010
Kobak, James and Anthony D'Iorio, The High Cost of Cross-Border Merger
Review (2001) Hughes Hubbard & Reed
<http://www.hugheshubbard.com/data/whatnew/Publications%20(New)/h
otdata/highC.html> at 9 March 2001
Korten, David C, There's a Dangerous Flaw in "Global Economy" Concept (1996)
<http://www.hokianga.com/MAI/flaw.htm> at 18 January 2000
Leach, Wayne, 'International Mergers & Australian Competition Law' (1999)
October 1999 Mallesons Stephen Jaques - Competition & Consumer Law
Update 1
PageB101
Leigh, Robert, The New Competition Act (20 July 1999) Legal City
<http://www.legalcity.net/Index.cfm?fuseaction=magazine.article&ArticleI
D=8231617> at 9 August 1999
Lewis, William, 'Global M&A Requires Global Coverage by the FT' (2000)
Mayer Brown, Sony BMG Joint Venture Saga ECJ Hits CFI One More Time,
EU & UK Antitrust/Competition Legal Alert, 14 July 2008
<http://www.mayerbrown.com/publications/article.asp?id=5182&nid=6> at
29 January 2010
McMillan Binch, Competition and Antitrust in Canada (1998) McMillan Binch
<http://www.mcbinch.com/antitrust/Inprnt/CompInCan/body.html> at 2
December 1998
Norton, Anthony, Efficiency Arguments in Favour of Mergers & Acquisitions (25
October 1999) Legal City
<http://www.legalcity.net/Index.cfm?fuseaction=magazine.article&ArticleI
D=5432902> at 13 January 2010
Parisi, John J, A Simple Guide to the EC Merger Regulation (2009) Federal
Trade Commission
<http://www.ftc.gov/bc/international/docs/ECMergerRegSimpleGuide.pdf>
at 13 January 2010
Rowley, J William, European Merger Regulation Amendments (2003) McMillan
Binch
<http://www.mcmillanbinch.com/Upload/Publication/Letter%20to%20EU%
20re%20Merger%20Regulation_Rowley_0403.pdf> at 15 April 2003
Rowley, J William, Prescription for the International Competition Network (2001)
McMillan Binch
<http://www.mcmillanbinch.com/Upload/Publication/Prescription%20for%
20the%20International%20Competition%20Network_Rowley.pdf> at 14
January 2004
Rudo, Joachim, The 1999 Amendments to the German Act Against Restraints on
Competition (1999) <http://members.aol.com/RudoLaw/GWBA1.htm> at
19 November 1999
Slaughter and May, Key Changes in Terminology Following Lisbon (November
2009) Slaughter and May
<http://www.slaughterandmay.com/media/894496/key_changes_in_termi
nology_following_lisbon_nov_2009.pdf> at 20 January 2010
Smith, W Stephen, Aki Bayz and Tej Srimushnam, New Lower HSR Thresholds
Announced (January 2010) Morrison | Foerster
<http://www.mofo.com/news/updates/files/16399.html> at 22 January
2010
PageB102
Szentesi, Steve, Convergence & Canada's New Merger Control Law (2009)
Competition Law Canada
<http://www.ipvancouverblog.com/2009/10/torontocompetitionlaw-6/> at
19 November 2009
The Coca Cola Company/ Cadbury Schweppes, plc: Mexico, 1999
<http://210.69.106.168/doc/Mexico/Case/mxmerger2.htm> at 1 March
2010
United States Department of Justice, United States v Microsemi Corporation
(2010) Antitrust Case Filings: Antitrust Division
<http://www.justice.gov/atr/cases/microsemi.htm> at 29 January 2010
von Finckenstain, Konrad, House of Commons Standing Committee of Industry
(2000) Canadian Competition Bureau
<http://strategis.ic.gc.ca/SSG/ct01736e.html> at 13 April 2000
von Finckenstein, Konrad, Standing Committee on Transport - Canada's Airline
Restructuring Legislation (2000) Canadian Competition Bureau
<http://strategis.ic.gc.ca/SSG/ct01737e.html (29 May 2000)> at 12 April
2000
Zhan Hao, Will Rio Tinto and BHP Billiton Make It This Time? A Few Comments
from the Perspective of Antitrust Law (8 February 2010) China Law Vision
<http://www.chinalawvision.com/2010/02/articles/competitionantitrust-lawof-th/will-rio-tinto-and-bhp-billiton-make-it-this-time-a-few-comments-fromthe-perspective-of-antitrust-law/ > at 1 March 2010
5.8
Internet sites
Research Institutes
American Antitrust Institute <http://www.antitrustinstitute.org/>
Centre for Competition and Consumer Policy <http://cccp.anu.edu.au/>
Centre for Competition Law and Policy
<http://denning.law.ox.ac.uk/competition/home.php>
CLASF: Competition Law Scholars Forum <http://www.clasf.org/>
Competition Law Forum at the British Institute of International and
Comparative Law <http://www.biicl.org/clf/>
Competition Policy Center <http://iber.berkeley.edu/cpc/>
Global Competition Forum <http://www.globalcompetitionforum.org/>
PageB103
Global Competition Law Centre

<http://www.coleurop.be/template.asp?pagename=gclc>
Institute of Competition Law: Antitrust Databases and Resources
<http://www.coleurop.be/template.asp?pagename=gclc>
New Zealand Institute for the Study of Competition and Regulation (ISCR)
<http://www.iscr.org.nz/>
OECD Washington Center <http://www.oecdwash.org>
Scottish Competition Law Forum <http://scotcomp.org.uk/>
International and multinational organisations and networks

APEC Competition Policy & Law Database <http://www.apeccp.org.tw/>
EFTA Surveillance Authority <http://www.eftasurv.int/>
International Competition Network
<http://www.internationalcompetitionnetwork.org/>
Lex Mundi The Worlds Leading Association of Independent Law Firms:
Pre-Merger Notification Survey
<http://www.lexmundi.com/lexmundi/PreMerger_Notification_Survey1.asp>
OECD, Organisation for Economic Co-operation and Development (2009)
<http://www.oecd.org/>
OECD Best Practice Roundtables on Competition Policy
<http://www.oecd.org/document/38/0,3343,en_2649_34715_2474
918_1_1_1_37463,00.html>
OECD Directorate for Financial and Enterprise Affairs: Competition Law
and Policy
<http://www.oecd.org/department/0,2688,en_2649_34685_1_1_1_
1_1,00.html>
Legal associations
American Bar Association Section of Antitrust Law
<http://www.abanet.org/antitrust/home.html>
Canadian Bar Association National Competition Law Section
<http://www.cba.org/CBA/sections_Competition/main/>
PageB104
Competition authorities, judicial bodies and government agencies

Australia
Australian Competition and Consumer Commission

<http://www.accc.gov.au>
Australian Competition Tribunal
<http://www.competitiontribunal.gov.au/>
Federal Court of Australia <http://www.fedcourt.gov.au/>
National Competition Council <http://www.ncc.gov.au/>
Productivity Commission <http://www.ncc.gov.au/>
Austria
Concentrations, BundesWettbewerbsbehrde (Federal Competition

Authority, Austria) < http://www.bwb.gv.at/BWB/default.htm>
Canada
Competition Bureau <http://competitionbureau.gc.ca/>

Competition Tribunal <http://www.ct-tc.gc.ca/Home.asp>
Belgium
Belgian Competition Authority

<http://economie.fgov.be/en/entreprises/competition/Belgian_Com
petition_Authority/index.jsp>
Czech Republic
Ministry of Industry and Trade <http://www.mpo.cz/default_en.html>

Office for the Protection of Competition <http://www.compet.cz/en/>
Denmark
Danish Competition Authority

<http://www.konkurrencestyrelsen.dk/english/>
European Union
Competition: Making Markets Work Better

<http://ec.europa.eu/competition/index_en.html>
Directorate General for Competition
<http://ec.europa.eu/dgs/competition/index_en.htm>
European Competition Network
<http://ec.europa.eu/competition/ecn/index_en.html>
Finland
Finnish Competition Authority <http://www.kilpailuvirasto.fi/cgibin/english.cgi?>
PageB105
France
Competition Authority
<http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=79>
General Directorate for Competition Policy, Consumer Affairs and
Fraud Control <http://www.dgccrf.bercy.gouv.fr/anglais.htm>
Germany
The Bundeskartellamt
<http://www.bundeskartellamt.de/wEnglisch/index.php>
Greece
Hellenic Competition Commission

<http://www.epant.gr/main.php?Lang=en>
Hungary
Hungarian Competition Authority

<http://www.gvh.hu/gvh/alpha?do=2&st=2&pg=96&m19_act=4>
Iceland
Competition Authority <http://www.samkeppni.is/samkeppni/en/>
Ireland
Competition Authority <http://www.tca.ie/>
Italy
The Competition Authority <http://www.tca.ie/>
Japan
Japan Fair Trade Commission <http://www.jftc.go.jp/e-page/>
Luxembourg
Conseil de la Concurrence <http://www.concurrence.public.lu/>
Mexico
Federal Competition Commission <http://www.cfc.gob.mx/>
Netherlands
Netherlands Competition Authority (NMa)

<http://www.nmanet.nl/engels/home/Index.asp>
PageB106
New Zealand
Commerce Commission of New Zealand

<http://www.comcom.govt.nz/>
Ministry of Economic Development <http://www.med.govt.nz/>
Norway
Norwegian Competition Authority

<http://www.konkurransetilsynet.no/en/>
Poland
Office of Competition and Consumer Protection

<http://www.uokik.gov.pl/en/>
Portugal
Portuguese Competition Authority <http://www.concorrencia.pt/en/>
Slovakia
Ministry of the Economy, Competition Protection Office

<http://www.uvk.gov.si/en/>
South Korea
Fair Trade Commission <http://eng.ftc.go.kr/>
Spain
National Competition Commission

<http://www.cncompetencia.es/default.aspx>
Sweden
Swedish Competition Authority

<http://www.kkv.se/default____218.aspx>
Switzerland
Competition Commission <http://www.weko.admin.ch/>
Turkey
Turkish Competition Authority

<http://www.rekabet.gov.tr/index.php?Lang=EN>
United Kingdom
Competition Commission <http://www.competitioncommission.org.uk/>
PageB107
Department for Business Innovation & Skills (BIS)

<http://www.berr.gov.uk/>
Office of Fair Trading <http://www.oft.gov.uk/>
United States
Antitrust Division, Department of Justice

<http://www.justice.gov/atr/index.html>
Federal Trade Commission <http://www.ftc.gov/>
Competition Blogs
Antitrust and Competition Policy Blog
<http://lawprofessors.typepad.com/antitrustprof_blog/>
Antitrust Hotch Potch
<http://professorgeradin.blogs.com/professor_geradins_weblog/>
Antitrust Lawyer Blog <http://www.antitrustlawyerblog.com/>
Antitrust Review <http://www.antitrustreview.com/>
Antitrust Today <http://www.antitrusttoday.com/>
Chillin Competition <http://chillingcompetition.com/>
Competition Law Blog <http://competitionlawblog.blogspot.com/>
Competition Law Canada <http://www.ipvancouverblog.com/>
Competition Law: A View From Hungary
<http://szilagyipal.wordpress.com/>
Waves: Competition, Innovation and IPRs
<http://competitionwave.blogspot.com/>
Other competition law web sites and resources

International Antitrust <http://www.internationalantitrust.com/>
Treaty of Lisbon (2009) Europa
<http://europa.eu/lisbon_treaty/index_en.htm>
PageB108

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Theinternationalregulationof

Julie Clarke (student 02693585)

Supervisor: Prof Stephen Corones

The international regulation of transnational mergers

Julie Nicole Clarke

Submitted in total fulfilment of the requirements

Supervisor: Professor Stephen Corones

ransnational mergers are mergers

involving firms operating in more than one

jurisdiction, or which occur in one

jurisdiction but have an impact on competition in

IMPACT ON MORE THAN

another. Being of this nature, they have the

potential to raise competition law concerns in

Julie Clarke, Multi-jurisdictional Merger Review Procedures: a Better Way (2006)

Table of diagrams and charts

Administrative Arrangement on Attendance (US/EC)

American Bar Association

Antitrust Cooperation Agreement

Australian Competition and Consumer Commission

Antitrust Civil Process Act (USA)

Australian Competition Tribunal

Collectively, the DOJ(AD) and FTC

Antitrust Mutual Assistance Agreement

Australia/New Zealand Closer Economics Relations Trade

Asia Pacific Economic Cooperation

Business and Industry Advisory Committee

Court of First Instance (EU)1

Civil Investigative Demand (USA)

Committee on Competition Law and Policy (OECD)2

Competition Committee (OECD)

Protocol for Coordination in Merger Investigations Between the

Working Party No 2 on Competition and Regulation (OECD)

Working Party No 3 on Cooperation and Enforcement (OECD)

Refers to the process of different national merger laws, over

Directorate General of Competition (EU)

Draft International Antitrust Code

Department of Justice (US)

Department of Justice (Antitrust Division) (US)

European Competition Authorities

European Court of Justice5

European Commission Merger Regulation6

European Competition Network

European Union / European Community7

European Commission Merger Regulation8

Federal Cartel Office (Germany)

Foreign Trade Antitrust Investment Act (US)

Federal Trade Commission (US)

Federal Trade Commission Act (USA)

General Agreement on Tariffs and Trade

Global Competition Forum (IBA)

Global Forum on Competition (OECD)

Binding agreements, such as treaties

Refers to the process of different national merger laws, over

International Antitrust Agency (proposed as part of the DIAC)

International Antitrust Panel (proposed as part of the DIAC)

International Bar Association

International Chamber of Commerce

The internal market of the European Union9

International Trade Organisation

Mutual Legal Assistance Treaty

Multi-jurisdictional Refers to the review of mergers by more than one jurisdiction