Thursday, November 21, 2019

Assess the importance of the counterfactual in merger assessment Essay

Assess the importance of the counterfactual in merger assessment - Essay Example However, not all mergers and acquisitions have been allowed to prosper particularly if it is found to prevent, restrict and distort competition and more importantly, if it would create or strengthen dominant position. Mergers or acquisitions are therefore assessed if it would significantly impede effective competition for being anti-competitive or strengthens dominance—thus an inquiry shall be made by the competition authorities to determine its impact on the market whether competition is still functioning effectively despite the merger or acquisition and the same is beneficial to the public in general. Competition laws to regulate merger and/or acquisition activities were legislated amongst the Member States of the European Union2 while Member States were mandated to enact national competition laws3 to synchronize the procedures to be followed in determining the validity of the merger and/or acquisition as well as to evaluate if the mergers and/or acquisitions are in accordan ce with the competition standards that encourage healthy competition and more importantly, do not significantly lessen competition. ... The primary task of this paper is to determine whether it is necessary for the competition authorities in the conduct of its investigation to allow or reject merger and/or acquisition to make assumptions and go beyond the facts and circumstances submitted by the merging entities to determine whether market competition is in force? It shall likewise be the task of this paper to determine the feasibility of making the hypothesis and the resulting conclusion as basis for sustaining or rejecting mergers or acquisitions? Furthermore, it shall be the task of this paper to determine if counterfactuals are indeed imperative to adjudge if a merger or acquisition significantly lessens competition (SLC) or not? And lastly, to determine whether the use of hypothesis or counterfactual circumstances to support an anti-competitive finding is congruent with the general legal precepts that decisions should be based on actual facts availing and as supported by evidence. Before this paper shall tackle the import of counterfactuals in resolving competition issues, it is necessary to revisit the historical and legal perspective of competition edicts including the jurisprudential pronouncements of both the European Courts of Justice (ECJ) and the national courts so that the spirit and letter of these legislations may be understood and applied properly in arriving at a logical conclusion—whether it is indeed beneficial or futile in competition analysis. State intervention on matters relating to the conduct of business is not a new concept. Under this jurisdiction, the general rule is that freedom to trade or conduct business cannot be curtailed or restrained unless the transaction is fraught with unreasonable

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