Commercial & Transport Law

Lecturer: Niall Kearney
Student: Graeme Leahy
Explain why the European Commission regulates mergers between undertakings (Regulation 139/2004)
First of all, what is the Merger Control Regulation (MCR)? Merger Control is the procedure of reviewing mergers and acquisitions under competition law. The MCR was put into force on 21 September 1990, providing procedures for commission notifications and investigations. These regimes are adopted to prevent anti-competitive consequences of mergers and acquisitions. Most merger control regimes normally provide accordingly for one of the following: * Does the concentration significantly impede effective competition? * Does the concentration substantially lessen competition? * Does the concentration lead to the creation or strengthening of a dominant position?
The purpose of the MCR is to enable competition authorities to regulate changes in market structure by deciding whether two or more commercial companies may merge, combine or consolidate their business to one. It might be expected that many mergers would be forbidden as they may raise severe competition concerns. In particular, they may result in the undertakings acquiring or strengthening a position of market power and in an increase in the market price of the products or services on the respected market. (Anton, n.d.). However, mergers also give the owner of the business the opportunity to sell it on. If this wasn’t a possible outcome, most entrepreneur’s/business men would be reluctant to start up a business. The task of the regulation is to identify and to restrict those mergers, which have a big impact on competition. Although the benefits of mergers are financially positive, the key of effective merger control is to identify why and when a merger should be prohibited for example to diffuse of total