This presentation by Russian Federation was prepared for the break-out Session 1, “Quantitative Evidence”, in the discussion “Economic Analysis in Merger Investigations” at the 19th OECD Global Forum on Competition on 9 December 2020. More papers and presentations on the topic can be found at http://oe.cd/eami. This presentation was uploaded with the author’s consent.

1. 08.12.2020
ECONOMIC ANALYSIS IN MERGER CASES
Denis Gavrilov – Ph.D., Counsel, deputy head of competition law chair at Moscow State Law University,
Board member of Competition Expert Association, FAS Methodology Council Board member
denis_gavrilov@epam.ru

2. Ex-post as well as ex-ante analysis of the effected markets;
The differences between horizontal, vertical and conglomerate mergers, since
analysis of each type of mergers has its own specifics, and such mergers can
have different effects upon competition;
Use the obtained data about market shares as a starting point for analysis rather
than the only source data for decision-making (market share is not the only point);
Possibility to compare positive and negative consequences of a merger to make a
well-balanced decision based on all factors;
Using a broad range of information sources that can be requested from the
merger parties as well as third parties (competitors, consumers, and etc.).
KEY PRINCIPLES

3. Size of the market share in terms of overlap the threshold values for individual and
collective dominance (quantitative criterion) before and after closing the deal (35
or 50 + market share overlap), as well as the dynamics of growth of economic
concentration in terms of the HHI index;
Comparison of the market shares of sides with the market shares of other market
participants, the degree of change in market shares, taking into account the
presence of barriers to entry into the market and determining the possibity of
overcoming the identified barriers to entry, as well as other features of the
functioning of the studied commodity market from the point of view of the
competitive environment;
Possibility of acquiring market power following the results of the transaction.
FACTORS TO BE USED IN DECISION MAKING

4. Consumer purchasing patterns and switching behavior analysis (SNIP test
surveys):
If in case of a price increase by an acquirer in a “horizontal merger” the majority of
consumers can switch only or to a considerable extent to the products of a target
and do not contemplate the economic expediency of switching to products from
other suppliers, such survey outcome can indicate a high probability of
anticompetitive effects caused by a merger due to a potential increase of the prices
by the parties.
The buyers’ market power analysis that can significantly decrease risk of
anticompetitive effect from the supplier side in horizontal merger case;
The significance of the level of market entry barriers and entry profitability.
FACTORS TO BE USED IN DECISION MAKING

5. Positive effects are a direct consequence of a merger and cannot be achieved
otherwise, causing less adverse consequences that a merger in question;
There are clear cause-and-effect mechanisms for transferring commensurable
economic benefits from a merger to consumers;
Positive effects can be estimated with a high level of accuracy, and there are no
doubts that these effects will be manifested in the foreseeable future;
Positive effects are significant and can compensate to a considerable degree the
adverse effects of a merger in the part of weakening competition.
EFFICIENCES

6. Impact of merger of the latest biotechnology, big data and platform solutions in the
field of agricultural production on the companies' potential to increase market
power in the related food markets (seeds, crop protection products and digital
agriculture);
the FAS took into account the need to reduce the dependence of the domestic
market on foreign selection and genetic materials, associated agro-technological
solutions to develop competition among Russian agricultural enterprises;
Behavioral remedies that undertakes Bayer to transfer to the molecular selection
agents and germplasm necessary for the development of new hybrids with desired
properties, for which, in particular, the greatest dependence of the domestic
market on foreign selection material (corn, rapeseed, soybeans and vegetables).
BAYER/MONSANTO CASE