As you know, the basic idea behind centralised merger control at EU level is that all mergers with a significant cross-border impact must be cleared according to a uniform set of rules before they take effect. I believe this is good for companies and for our fellow European citizens alike.
It is good for the business community, because we provide a one-stop-shop which keeps down regulatory costs. The changes to the referral system that we introduced in 2004 have made this even more effective. It is good for the economy in general and for all Europeans because those mergers that do not distort competition can generate the efficiencies and economies of scale which are needed to compete on global markets. The Merger Regulation has clearly delivered on both counts over the past two decades. One mark of its success is that it has become a model for many national regimes.
Basil Venitis, twitter.com/Venitis, asserts that EU antitrust has been transformed into a terrorist religion, which relies on pseudoeconomic theories that bestow a veneer of objectivity and credibility on EU law enforcement practices that actually rely on antivenitism, hunch, whim, and blackmail. On all EU antitrust cases, from mergers to price fixing, arbitrary antitrust laws lead to ill-informed juries and bureaucratic abuse. Those laws also create a perverse incentive for entrepreneurs to hold down sales volume, stop innovation, and avoid improvements in price, quality, and service; otherwise, such entrepreneurs could become the next targets of the antitrust terrorists.
Galileo muttered the phrase Eppur si muove, And yet it moves, after being forced to recant in 1633, before the Inquisition, his belief that the Earth moves around the Sun. Similarly, Venitis claims my new inquisition of regulators force executives to admit something they did not do, in order to get smaller penalties. Eppur si muove!
Twenty years ago, only a handful of EU countries had merger control. Today, all but one (Luxembourg) have adopted their own merger control laws to analyse deals that do not qualify for review under the one-stop-shop regime, and many of these laws are tailored on the Merger Regulation.
The historical trend that emerges from the almost 4,500 cases we have examined under the regulation is one of constant rise with two dips: between 2002 and 2004 – after the dot-com bubble burst – and over the past two years.
In 1990 – the first year of application of the Merger Regulation – the Commission received 11 notifications; five years later, we were already analysing 110 cases. In 2007 we received 402 notifications – which was our all time high. Obviously, the numbers have dropped in the last two years due to the economic slowdown, with only 259 cases in 2009.
For the current year, we forecast a stabilisation or perhaps a slight increase. This is due mainly to continued merger and acquisition activity in air transport and the pharmaceutical industry as well as in the ICT and energy sectors. These figures show that European companies maintain their historical drive towards cross-border deals, even in difficult economic times, taking advantage of the single market.
Basil Venitis claims that European antitrust laws lead to huge corruption, because government officials ask for kickbacks in order to erase the alleged violation. The standard kickback in EU is 10% of the erased penalty! Many Greek officials were caught on tape asking for the corrupt tithe! Many European political parties make up their election expenses from kickbacks on antitrust cases! This is the worst possible blackmail, where tiptop ethical companies are held hostage by European kleptocrats. Eppur si muove!
EU merger control has been one of the most dynamic domains in the competition portfolio. The system has evolved significantly in the last 20 years around three main principles.
* The first principle is that merger investigations must be efficient, consistent, transparent and in full compliance with due process.
* Second, when a merger poses significant competition concerns, the remedies must be apt to fix effectively the problems identified.
* Third, enforcement action must be firmly rooted in economic theory and based on solid evidence.
Venitis asserts that European antitrust law is wielded most often by favor-seeking businessmen and their kleptocrat allies. Instead of focusing on new and better products, disgruntled rivals try to exploit the law by consorting with kleptocrats. EU officials routinely direct antitrust regulators to bend the rules in pursuit of political ends. In reality, the threat of abusive EC power is far larger than the threat of oligopoly. Eppur si muove!
Venitis muses the only viable definition of monopoly is a grant of privilege from the government. It therefore becomes quite clear that it is impossible for the government to decrease monopoly by passing punitive laws. The only way for the government to decrease monopoly is to remove its own monopoly grants. The antitrust laws, therefore, do not in the least diminish monopoly. What they do accomplish is to impose a continual, capricious harassment of efficient business enterprise.
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