EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

in the market so that these competitors are ready to supply the customers of the combined entity if that entity increases prices or restricts competition (Rosenthal, Thomas, 2010). The simulations of competition processes raise many doubts. It is not possible to explain it under general considerations as each model is based on specific outputs. Building a model and using specific data requires knowledge about competition processes in the relevant market. The use of quantitative tools leads to serious data problems. This is the main barrier to the analysis of unilateral effects. Companies are reluctant to share their market strategies and, therefore, there is an information asymmetry between them and the antitrust authorities. Due to the lack of information, the decisions of these authorities carry a high risk of error. This means that, in practice, it would be difficult to prohibit a merger that does not create or strengthen a dominant position, but there is a likelihood of unilateral or coordinated effects. 4. Coordinated effects The assessment of whether the merger will lead to a significant impediment to competition also requires the examination of coordinated effects, in addition to unilateral effects and close relations between competitors. It includes the effects of a merger which are caused by a change in the strategic interactions of all market participants, which facilitates the coordination of all companies in the market and the price level is higher than in the absence of concentration. The merger may change the structure of the market in such a way that it will facilitate the coordination of all companies in the market. At the same time, it can eliminate competition and allow for a coordination that corresponds to the monopolistic structure of the market (Rosenthal, Thomas, 2010). To assess the risk of coordination, specific structural factors as, for example, the degree of market concentration, homogeneity of products, market transparency, and symmetry of undertakings are helpful. If few companies are in the market and they produce similar goods at similar costs, it is easier to agree market strategies. However, coordination is not stable. Each company may unilaterally opt out of coordination in order to maximize its own profits individually and for that reason such analysis of potential merger effects is also doubtful (Kostecka-Jurczyk, 2017). If the volume of supply in the market is reduced, all companies will tend to raise prices. Each undertaking may be willing to reduce its own production even more and thus increase its own profits. If other companies notice these trends as well, it will lead to retaliation. The expansion of production by all companies will lead to a price decrease for all (Budzinski, 2006). In such dynamic competition, companies can make their behaviours dependent to some extent on whether or not other companies maintain the similar (agreed) strategies. These types of

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