Assessing vertical mergers : An attempt to find the balance keeping the technological realities in the backdrop

Click here to read the full article online

“Vertical mergers” tend to be efficient. Therefore the better policy is not to regulate them ex-ante via the EU Merger Regulation, but ex-post by applying Article 102 TFEU should the merged entity restrict competition post-merger. The presumption of efficiency related to vertical mergers stems from the Chicago School thinkers. This school of thought believes that, vertical restraints should be per se legal.1 This essay shall analyze and assess the two possible options of regulation, namely: a. Ex-ante regulation via the EU Merger Regulation; and b. Ex-post regulation by applying Article 102, Treaty on the Functioning of the European Union (“TFEU”). The aforesaid analysis shall be done in the light of the main concern that competition law aims to resolve, that is, the anti-competitive effect resulting from the merged entity. The aforesaid problem statement is divided into two important branches of enforcement, namely: a. Antitrust agencies; and b. Courts. For a proper analysis, it is pertinent to understand the importance of remedies, namely behavioral and structural remedies as well.