RBB publications

RBB Brief 63: Digging in the Scrap Heap! A new theory of adverse buyer power 15.03.21

The Aurubis / Metallo merger was approved unconditionally by the European Commission after an in-depth investigation, which included the sending of a Statement of Objections to the Parties and an oral hearing. The Commission was concerned that this merger, by combining the two largest purchasers of copper scrap in the EEA, would give rise to significant buyer power. Whilst increased buyer power usually benefits consumers, as lower input costs often translate into reduced product prices, in some cases imposing lower prices on suppliers could result in a significant impediment of effective competition (“SIEC”).

In this Brief, we offer an economic perspective on the Commission’s approach to investigate competition concerns stemming from increased buyer power that results
from horizontal mergers, with particular focus on a new theory of harm.

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How Merger Control Rolls: A Response to Caffarra, Crawford and Valletti 01.02.21

In a recent paper, How tech rolls: Potential competition and ‘reverse’ killer acquisitions, Cristina Caffarra, Gregory Crawford and Tommaso Valletti make the case that merger control should introduce presumptions of anticompetitive harm when large tech companies seek to “buy” rather than “build”. Simon Bishop and Stephen Lewis evaluate these arguments. They conclude that the arguments of Caffarra, Crawford and Valletti are weak and unsubstantiated. We should therefore be extremely wary of deviating from the established practice of detailed case-by-case assessments by introducing presumptions into merger control.

The full document can be downloaded here

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Consultation on the CMA Draft Merger Guidelines 26.01.21

The CMA has launched a welcome public consultation regarding proposed updates to its Merger Guidelines. As part of this consultation, RBB Economics has submitted a response that sets out a number of observations on the CMA’s draft which (if followed) we believe would facilitate a more transparent and balanced approach to the assessment of mergers.

The full document can be downloaded here

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CMA’s Draft Merger Guidelines: Observations by RBB Economics 18.12.20

The Draft Merger Guidelines seek to enshrine the broadest possible margin of discretion to prohibit mergers. As we explain, these proposals threaten real and potentially very significant costs of over-enforcement for consumers, competition, and the efficient functioning of the UK economy.

RBB’s observations can be downloaded here

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Brief 62: Economic Lessons from the EU General Court’s Three/O2 Judgment 03.12.20

In the EU, dominance used to be a necessary but, importantly, not a sufficient, condition for finding that a horizontal merger would give rise to competition concerns. But since 2004, EU merger control allows for the possibility of anticompetitive mergers that do not create or enhance a dominant position. This raises the important question: if dominance is no longer a necessary condition, how should we determine whether a horizontal merger is pro-competitive or anti-competitive?

That question was addressed in the recent judgment of the EU General Court, in which the Court annulled the Commission’s decision to prohibit the merger between Three and O2, two of the four main providers of mobile telephony services in the United Kingdom. That judgment provides an important commentary on the Commission’s economic approach to assessing horizontal mergers that goes beyond the specifics of this particular case. This Brief discusses some noteworthy points to emerge from the judgment.

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