British Merger Policy

• Published in: Fiscal studies 1985-02, Vol.6 (1), p.70-81
• Main Author: FAIRBURN, J.A.
• Format: Article
• Language: English
• Subjects: Acquisitions & mergers; Business management; Business structures; Competition; COMPETITION POLICY: A SYMPOSIUM; Consumer goods industries; Cost savings; Ecological competition; Economic competition; Economic policy; Employment; Horizontal integration; Horizontal mergers; Market competition; Market share; Market shares; Statistical data
• ISSN: 0143-5671; 1475-5890
• DOI: 10.1111/j.1475-5890.1985.tb00401.x

Attention is focused on the way in which the UK's Monopolies and Mergers Commission (MMC) has treated different types of merger during the 19 years policy has been in effect. British merger policy seems from a distance to be somewhat poorly focused, almost arbitrary. While this has been true of noncompetition issues, it is argued that the MMC's attitude toward competition issues has become fairly clear. As of December 1984, the commission had produced 54 reports on some 61 distinct mergers, 29 of which were considered to be against the public interest. In examining these reports, 4 types of noncompetition issues (management efficiency, balance of payments and employment, foreign takeovers, and regional matters) and 4 types of competition issues (horizontal and vertical mergers, potential competition, and anticompetitive effects) are analyzed. In the recent merger phase, begun in the late 1970s, the MMC seems to be using an implicit set of market share guidelines that are firmer for high and low than middling increases in share. There would appear to be advantages to making these implicit guidelines explicit.