Does Merger Policy Converge after the 2004 European Union Reforms

More than ten years after the European merger policy reform, sufficient data has been accumulated to explore the impact of the reform on the difference between the European Union (EU) and the United States (US) merger policy. We expect policies to converge following the EU 2004 reform that established an economically-based “significant impediment to effective competition” standard; this approach seems to closely approximate the US “substantial lessening of competition” standard. We start by identifying changes in the EU regime and verifying the consistency in the US regime. We detect a softer EU policy for clear dominance and monopoly cases and some changes in its collusion policy after the reform. The incidence of collusion cases falls while EU's policy, conditional on collusion being the theory of harm, appears tougher. Limited data precludes detailed analysis for the non-dominance unilateral concerns, although the EU data implies stability in the challenge probability associated with that type of case. Decompositions show some convergence in policy for unilateral cases and non-parametric analysis shows further convergence occurs in unilateral-effects analysis. Matching analysis is attempted, but fails to generate results, because even adjusted, the sample distributions are not sufficiently balanced. Thus, we must rely on the structural form assumptions of our logit models.This version of the article is a working paper, whose final form appears in the Journal of Competition Law & Economics, Volume 15, Issue 1, 2019, Pages 664–689