Regulation and EU Merger Control in the Liberalised Electricity Sector

The electricity sector is a typical network industry consisting of four closely linked vertical stages. Following liberalisation in Europe in the 1990s, the sector witnessed a surge of mergers, which were subject to review by the European Commission. At the same time, comprehensive economic regulation was established. This raises the question of the adequate relationship between these two forms of industry supervision ('policy mix') as the first issue of this paper. The second more specific issue concerns the increased use of divestiture remedies in EU Merger Control. Empirical evidence on two leading cases from the electricity sector is presented, which casts doubt on their effectiveness. Therefore, a strict(er) merger control policy including prohibitions if necessary coupled with effective access regulation is derived as the preferred policy choice for the liberalised electricity sector in Europe