Eleanor M. Fox (New York University School of Law) and Jackson Maxwell (New York University School of Law) have posted Megamergers, Mega Harms, and Nationalistic Clearances: The Costly Bias Against Prohibiting Globally Anticompetitive Mergers (University of Pennsylvania Journal of International Law, forthcoming) on SSRN. Here is the abstract:
Megamergers may entail major harms to competition all over the world, yet they are rarely prohibited outright, even when prohibition would probably be best for the world. We examine three megamergers with concededly large, predicted anticompetitive effects—Holcim/Lafarge, Bayer/Monsanto, and Bunge/Viterra—that shed light on this phenomenon and suggest a worrying pattern. First, the largest, most mature competition authorities clear megamergers with spinoffs and injunctions to satisfy their domestic markets even when there is a good case that prohibition is probably a better remedy for them. Clearance by the major jurisdictions effectively means that the mergers will be consummated because developing countries, where the harm is often greatest, have no practical power or resources to prohibit the merger. Developing countries then spend millions of dollars vetting the same merger and ordering some relief, which is likely to fall short of curing the competition problems for their people. This article, for the first time, identifies this dysfunctional cycle and offers solutions to stop the cycle, including re-setting norms so that national competition authorities take account of the holistic picture as well as deeper collaboration among the competition authorities to overcome collective action problems.
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