Competition Law Reading Room
Endangered or extinct: Are conglomerate effects still relevant to merger control? A comparison of US, European and Australian approaches
(2012) 20 Competition and Consumer Law Journal 1
'A large, diversified company contemplating a merger may legitimately wonder what weight (if any) competition authorities may give to theories of harm arising from conglomerate effects when reviewing the transaction.This article considers whether conglomerate effects remain relevant to contemporary US, European and Australian merger control — and if so why and to what extent. The article concludes that conglomerate effects are in practice ‘extinct’ in the United States, whereas they are more aptly described as surviving but ‘endangered’ in the European Union and Australia. Competition authorities in these three jurisdictions approach merger control differently, in terms of the theoretical underpinnings of whether conglomerate effects are raised as well as any standard of proof applied. Ultimately, however, the article suggests that conglomerate effects are unlikely to form a primary basis for authorities in any of these jurisdictions to oppose a merger. There is therefore a tendency toward a converged regulatory outcome with respect to conglomerate effects.'