Th3.6: Controlling Mergers Flashcards

1
Q

In the UK, how are mergers assessed?

A

in terms of the specific circumstances of each case, considering whether there will be a substantial lessening of competition (SLC)

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2
Q

What will the CMA consider?

A

the likely competitive situation if the merger goes ahead compared to if it does not, and the merger will be approved if its potential benefits are greater than its cost

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3
Q

When is a merger investigated?

A

if it will result in market share greater than 25% or if it meets the turnover test of a combined turnover of £70 million or more

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4
Q

What is the aim of preventing two large companies merging?

A

it is so they do not exploit their own customers by raising prices, offering poorer quality service and reducing choice - it can prevent firms from gaining monopoly power

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5
Q

However what is the problem?

A

very few mergers are investigated each year - the CMA can suffer from regulatory capture and may not have all the information necessary to make a decision

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