Understanding competition

Compelling expertise for the last 25 years

Economic analyses are playing an ever more important part in German and European merger control. While economic test cases have long been established on a European level, the importance of economic analyses in Germany has increased in recent years. With the introduction of the SIEC-test in German merger control, it is expected that they will continue to grow in importance.

Where there are tight deadlines in merger-control cases, the early identification of critical competition issues is crucial before the announcement of a merger. This can mean that so-called “Prenotification Talks” with the trust authorities are necessary, in order to identify their concerns prior to an announcement. In such cases, the rule of a specific competition economic “Theory of Harm” is a guiding principle in market tests carried out by the authorities. 

An efficient competition economic consultancy deals with identifiable competition concerns at an early stage and appraises their practical relevance. In this way, authority concerns can be identified before the announcement of merger intentions and – where necessary – appropriate corrective measures can be suggested.

Next to product and location-specific market demarcation, direct analysis of unilateral and coordinated price effects is becoming increasingly important. At the same time, newer indication-based approaches such as the “Upward Pricing Pressure Test” (UPP) also become important in economic analysis. However, the probability of foreclosure strategies in the context of vertical-merger intentions can be a key issue, which may be solved with the use of economic methods.