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Measuring unilateral price increases in the UK and EU due to mergers in differentiated markets: Are the tools fit for purpose?

In many merger cases, the core competition concern is that the loss of rivalry between two merging competitors may render it profitable for the merged business to unilaterally worsen its offer by raising prices, or reducing quality, range or service. Competition authorities frequently use merger control tools (such as diversion ratios, price indices and merger simulation) to assess the closeness of competition between rivals. However, are these merger control tools, which have evolved over time, still fit for purpose in 2022?

Mat Hughes, Ben Forbes and Jules Duberga contributed to the expert analysis of Merger Control 2022, the 11th edition of Global Legal Insights review of the M&A market.

In the report, we illustrate: 

  • The considerations of supply-side factors and demand-side constraints to assess competitive effects, even when barriers to entry are high
  • The main qualitative tools that EU competition authorities use to assess incentives to increase prices or worsen their offer in differentiated markets
  • How the Commission and CMA have applied these tools in practice, and the relevance of other factors to their conclusions
  • The key lessons for practitioners and parties contemplating mergers, and whether the tools are still fit for purpose



For the full report from Global Legal Insights, please visit: https://www.globallegalinsights.com/practice-areas/merger-control-laws-and-regulations

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