This paper is an attempt to derive priorities for the reform of European merger policy from observed problems with decision making in merger cases. We identify problems in the application of theory and empirical method as well as the impact of resource constraints and the potential for systematic decision bias. In contrast to the intense debate about the merits of a switch from a dominance criterion to a significant lessening of competition test, we find that such a switch would not effectively address any of the problems in Commission decision making on mergers. Similarly, the lack of an efficiency defense does not seem to explain any of the weaknesses of European merger policy. In contrast, we find that most of the problem areas identified in current merger control practice can be effectively addressed by reforming the merger procedure, the internal organization of merger control in the Commission, as well as addressing resource issues. Together with carefully crafted merger guidelines these should have strong priority for the reform of merger policy in Europe.

本文就是試圖優先獲得觀察到的問題與決策對歐洲并購政策的改革。我們確定在理論上和實證方法的應用，以及資源限制和系統決策偏差的潛在影響的問題。相反，大約從一家獨大的標準切換到競爭考驗的顯著減持優劣的激烈辯論中，我們發現，這種委員會的決策不能有效地解決任何問題。同樣，缺乏效率的防守似乎并沒有解釋任何歐洲并購政策的弱點。相反，我們發現大多數的合并控制實踐中發現問題的地方都可以通過改革合并，委員會合并控制的內部組織，以及資源問題得到有效解決。加上精心打造的并購指引這些有很強的優先級的在歐洲并購政策的改革。

 

1.Systematic concerns about EU merger policy  關于歐盟并購政策系統性的擔憂

 

Businesses and practitioners often express their concerns about different issues in the merger process in terms of ``fairness'' of the process. But many times the word` `fair'' issued to capture a number of very different issues ranging from a perceived bias on the part of the decision maker to a perception of a lack of serious consideration of the evidence or lack of knowledge of the industry. In this section, I will develop the main concerns I perceive from an economist's perspective, focusing on how certain aspects of current policy may lead to economically unreasonable merger decisions.

企業和從業者往往表達他們關注并購過程中的不同問題的``''公平的條款。但很多時候這個詞`發出來捕獲一些非常不同的問題，從對決策者的一部分感知偏見的感知缺乏認真的考慮這個行業的知識或證據不足'公平'。在本節中，我將從一個經濟學家的角度來看，著眼于現行政策的某些方面可能導致經濟上不合理的并購決策。#p#分頁標題#e#

 

Instead of a systematic review of cases as in Uneven et al.(1993),I will focus on the issues raised by some of the recent controversial cases because they highlight the issues of concern. For this discussion it is of little importance whether, in my judgment, these cases were decided correctly. What is essential is whether features of the decision making process could have led to erroneous(or random)outcomes. The purpose of this section is to identify the possible sources for such decision error. This forms the basis for a discussion in later sections about the potential changes in policy that could reduce the potential for such errors.

1.1.Does the commission use inadequate theoretical frameworks for its analysis 

One difficulty in assessing the adequacy of the theoretical framework used in merger analysis is that any competition authority attempting a sound theoretical foundation for its policies has had to shoot at a moving target. This is particularly true for any attempts to include concerns about collusion(or parallel conduct)and foreclosure into preventive emerge  policy. The fold of Industrial Organization has been moving fast in these are as over the last 20 years and the appropriate incorporation of these insights into policy have not really been settled. But even in more traditional areas like market definition the developments in economics have changed what we would consider an appropriate rigorous review of mergers.

1.2.Empirical substantiation of theories

From an economic point of view evidence for anti-competitive effects of mergers is nothing else but empirical data that allows one to discriminate between likely anti-competitive effects from a merger in the market and the absence of such effects. I have discussed in the previous section, that there are often significant problems in the theoretical frameworks the Commission uses and that the empirical implications that are attributed to the theory are often invalid. However, there are also, somewhat distinct, issues with the acquisition and use of evidence in itself. The observation made by Evened al.(1993,p.77)that the Commission's assessments`` rely unnecessarily on qualitative assertions and hunches even when more quantitative evidence cold have been made available, ''is still a valid concern. Furthermore, the presentation of evidence in published decisions at times appears selective and unsystematic, or strong conclusions are drawn from inconclusive evidence .In this section, I will brieˉy discuss some of these issues in the context of the three main concerns in merger assessment: unilateral effects, coordinated effects, and arguments about foreclosure and leverage. In the area of unilateral effects of mergers empirical analysis has made the greatest progress. Its power has been demonstrated impressively in the United States in Home Depot/Staples in which the argument for a narrow market of office supply super stores was rigorously supported by market data. Even where sophisticated econometric methods are not or cannot be used US antitrust authorities have systematically pushed the use of hard data to obtain reasonable assessments of the order of magnitude of claimed effects.#p#分頁標題#e#

1.3.Constraints on resources

One of the most important sources of error in any administrative procedure is a lack of appropriate resources. There is no doubt that the Merger Task Force has been strained to the limits in its capacity to process mergers simply as a result of the increase in the case load. Some cases have been farmed out to other units of DG Competition. At the same time the Commission appears to be more ready to accept requests from national competition authorities to take over responsibility for a case. Constraints on the number of available man-hours constitute only one aspect of such resource constraints. 

For the quality of decision making of a competition authority it is crucial what stock of expertise it has ready access to. Originally, Merger Task Force personnel have come from a background as career civil servants with a heavy emphasis on training in law. The average member on a case team will often lack intensive economic training or have little experience with looking at merger cases from an industry perspective(as consultants, competition lawyers, or investment bankers).I will discuss the problems generated by a generally limited range of experience in Section 1.4.Here I concentrate on the issue of capacity constraints on the side of highly qualified economists.

There is no doubt that the Commission has made an effort to hire economists and increase the MTF's capacity in economic expertise. Commissioner Monty has made the hiring of quailed economic staff a priority. But it is important to note two aspects of the problem. First, the necessary level of economic expertise for merger cases is fairly high.

Second, we are starting from a relatively low base.

Let merest consider the level of expertise needed. The economic questions discussed in recent merger cases, including empirical applications of market definition tests and unilateral effects analysis, are, as I have described, often at the forefront of industrial economics research. New economic theory was written for cases like GE/Honeywell or UPM developments in empirical Industrial Organization were at the basis of the empirical analysis of unilateral effects in theVolvo/Scania case. All of the cases that have led to considerable controversy have revolved around issues associated with fairly recent academic research, especially those on foreclosure and leverage This dramatic development in the degree of sophistication in the economic analysis of merger cases is reˉacted in the market place. Specialized consultancies in competition policy anti-trust today have a policy to hire economists with a Ph.D. from a leading university for any job above the level of basic research assistant positions.

 

2.Addressing problems through substantive changes in merger assessment  通過兼并評估實質性的改變解決問題

 

In its Green paper the European Commission has proposed two substantive changes to the test applied in merger control analysis. One is a switch away from the dominance concept to a standard of ``substantial lessening of competition’ as in the United States, Canada or even the United Kingdom. The second is the introduction of an explicit efficiency defense in merger proceedings.#p#分頁標題#e#

Both switches tend to be appealing to economists. The ``substantial lessening of competition'' standard is phrased in a way that sounds more like the language an economist would use. The efficiency defense explicitly incorporates one side of the trade-off involved in mergers into the analysis. But the real question to ask is whether such changes have any possible real impact on merger decisions. Furthermore, it is usually not discussed whether such changes could at all address the decencies in merger policy that we have identified.

In this section, I will argue that the proposed changes are at best cosmetic. Given the context in which the change is proposed and given the nature of judicial review, there is area danger that the suggested switch could aggravate the problems in merger assessment that we have identified rather than reduce them. At the same time there are simple substantive rule changes that could eliminate many of controversies that we have seen in recent cases.

2.1.Efficiency defenses

Calling for efficiency defenses is another pet subject for economists. The essence of the subject of economics is to look for trade-offs and it makes economists nervous when policy apparently only addresses one side of the trade-off, namely the anti-competitive effects of mergers. Indeed, economists have made proposals to evaluate the welfare effects of mergers by looking directly at the tradeoff of price effects against cost changes in a welfare calculus.(See Farrell and Shapiro,1990 for a theoretical framework and Werden and Froeb,1994 and Roèller et al.,2000 for suggestions for practical implementation.)I will discuss in this section why efficiency defenses aimed ate valuating the market power/efficiency trade-off are highly problematic. I will also discuss an alternative view of efficiency arguments that are aimed not at such a trade-off. Instead I will argue that efficiency arguments can be used as evidence in establishing intent on the part of the parties. This approach is quite different from thirst in the intended use of efficiency arguments, as I will discuss below.