Should Profit Margins Play a More Decisive Role in Horizontal Merger Control?

摘要

In a recent speech, DG Competition's Chief Competition Economist, Prof Tommaso Valletti explained that, while there is no evidence of increased market concentration in the five largest European countries (EU-5), profit margins have increased since 2010, reaching a historical maximum in 2016. In his view, the upward trend in profit margins ought to have implications for competition policy in general and, in particular, for merger control. Prof Valletti wrote: 'The higher the merging parties' margins in a given case, the more likely traditional market share thresholds will underestimate competitive effects (all else equal)'; and added: 'Merger control matters especially in preventing anticompetitive effects in a world of high margins'. Prof Valletti concluded: 'If we do not properly adapt to changing markets, the risk is politics will (in ways we might not approve of)'.