Competitors in merger control: Shall they be merely heard or also listened to?

• Autores: Thomas Giebe, Miyu Lee
• Localización: European journal of law and economics, ISSN 0929-1261, Vol. 49, Nº 3, 2020, págs. 431-453
• Idioma: inglés
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• Resumen

  • There are legal grounds to hear competitors in merger control proceedings, and competitor involvement has gained signifcance. To what extent this is economically sensible is the focus of our game-theoretic analysis. The competition authority applies some welfare standard while the competitor cares about its own proft. In expectation, there is neither a pure confict nor a complete alignment of interest. We distinguish hard and soft information and ask whether hearing the competitor might convey valuable but non-verifable information to the authority. We identify a case where, based on the authority’s verifable information, the authority’s decision is improved by following the competitor’s selfsh but non-verifable communication. We argue that the practical relevance of this constellation is very limited, especially so under a consumer welfare standard. Thus, non-verifable information should mostly be ignored. Complementary to our analysis, we provide empirical data of competitor involvement in EU merger cases and give an overview of the legal discussion in the EU and US.