While the purport of competition law is to preserve and promote competition, the
essential object of competition is to ensure optimal allocation of available resources,
produce more while using less resources and thus, achieve efficient market
outcomes. Generally, the efficiency is accepted as a defence in competition law.
Ignorance of economies (efficient use of resources) by competition law and
competition enforcement agencies would prejudice the very object of preserving
competition. However, one should also acknowledge that scientific quantification and weighing of efficiencies are complex tasks.
Merger Review process has evolved over a period of time. This is evident from the changing focus on consideration of efficiencies in merger analysis. However, a cross-country comparison shows that as of date consideration of efficiency has become almost an integral part of merger review. The article details this discussion.
This presentation by Herbert HOVENKAMP, Professor, University of Pennsylvania, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.
The document discusses issues with the consumer welfare standard in antitrust law and proposes an alternative "effective competition standard." It argues that the consumer welfare standard fails to consider harm to workers and upstream suppliers. The effective competition standard would make preserving competitive market structures for all stakeholders the principal objective. It then discusses how this standard could be applied to labor markets and gig economy platforms, treating workers' interests equally with consumers'. It argues vertical restraints imposed by dominant gig platforms may reduce competition in labor markets.
THE JAPANESE TRANSFORMER INDUSTRY A CASE STUDY OF ITS COMPETITIVENESSijcsit
Transformers are one type of magnetic component used in relevant structures like power Switch supplies. Transformers are the necessary parts in all products involving electricity, for the alteration of current voltage during the processes of power generation, transformation, transmission and distribution .Relevant discussions in Japan concerning transformers have centered on power industries and power systems. Transformers for household and business use are mostly categorized under electronics-related industry, one of the ten major consumer electronics industries (most of the mare middle and small-sized firms).Relevant literatures primarily focus on the study of related technology, with little attention paid to the competitive edge and future prospects of transformer-related industries. Case studies indicate that Japanese enterprises are disappointed with the governmental efforts and assistance directed to the improvement of existing technologies. As the executive director of one of the transformer associations in Japan pointed out, no advancement has been shown in this technology for nearly the last 20years.Most companies can improve themselves only in reaction to errors; the lack of specialized knowledge derived from research strongly decreases the industry's progressive power and postpones its development. Japan has lagged considerably behind Europe and the US in this aspect. The transformer companies in Japan will have great difficulty in cultural and language communication if they invest in foreign countries. In this study, experts and scholars in the fields of industry, government and academia are interviewed. Questionnaires are issued to the object companies and a comparative case study is conducted to analyze the influencing factors on the competitive edge and strategies in Japan in the hope that an effective reference for improving industrial competitiveness can be available for the government and the companies
This document discusses theories of harm and assessment in exclusionary abuse cases. It provides examples of exclusionary theories of harm such as imperfect financial markets, depriving rivals of scale economies, and raising rivals' costs. It also lists possible efficiencies and justifications for conduct like penetration pricing and scope economies. The document emphasizes that a robust theory of harm must be supported by evidence and economic theory. It discusses types of evidence that can be analyzed, such as prices, costs, documents, and consumer behavior. Practical considerations for assessments like managing resources and dealing with uncertainty are also covered.
The findings of the study suggested that growth is the goal of synergy exploitation. Growth is typically
seen in forecasted and realized revenues at a suitable profit margin. Growth synergies, when experienced, will
improve financial performance depending on the revenue opportunity
This document contains a homework assignment for a Management Information Systems course. It includes 5 questions related to information systems, decision making, competitive environments, value chain analysis, and the role of HTML and email in commercial growth. It provides context and frameworks to answer each question, including definitions and examples related to decision support systems, executive information systems, marketing information systems, office automation systems, school management information systems, partnering, bargaining power of suppliers and buyers, barriers to entry, threats of substitutes, Porter's value chain model, and how HTML and email have helped organizations commercially.
Market Structures and its Composition of Individual FirmsAaron Showers
This document provides an overview of different market structures including perfect competition, monopoly, monopolistic competition, and oligopoly. It then uses an example of an online cookbook business to illustrate how a firm may operate under monopolistic competition. Specifically, the cookbook business would have some control over price due to product differentiation while also facing competition from other similar businesses, reflecting characteristics of monopolistic competition. The document analyzes the costs, revenues, and potential profits of the cookbook business example to demonstrate how a firm's decision-making may differ between short-run and long-run timeframes under monopolistic competition.
Merger Review process has evolved over a period of time. This is evident from the changing focus on consideration of efficiencies in merger analysis. However, a cross-country comparison shows that as of date consideration of efficiency has become almost an integral part of merger review. The article details this discussion.
This presentation by Herbert HOVENKAMP, Professor, University of Pennsylvania, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.
The document discusses issues with the consumer welfare standard in antitrust law and proposes an alternative "effective competition standard." It argues that the consumer welfare standard fails to consider harm to workers and upstream suppliers. The effective competition standard would make preserving competitive market structures for all stakeholders the principal objective. It then discusses how this standard could be applied to labor markets and gig economy platforms, treating workers' interests equally with consumers'. It argues vertical restraints imposed by dominant gig platforms may reduce competition in labor markets.
THE JAPANESE TRANSFORMER INDUSTRY A CASE STUDY OF ITS COMPETITIVENESSijcsit
Transformers are one type of magnetic component used in relevant structures like power Switch supplies. Transformers are the necessary parts in all products involving electricity, for the alteration of current voltage during the processes of power generation, transformation, transmission and distribution .Relevant discussions in Japan concerning transformers have centered on power industries and power systems. Transformers for household and business use are mostly categorized under electronics-related industry, one of the ten major consumer electronics industries (most of the mare middle and small-sized firms).Relevant literatures primarily focus on the study of related technology, with little attention paid to the competitive edge and future prospects of transformer-related industries. Case studies indicate that Japanese enterprises are disappointed with the governmental efforts and assistance directed to the improvement of existing technologies. As the executive director of one of the transformer associations in Japan pointed out, no advancement has been shown in this technology for nearly the last 20years.Most companies can improve themselves only in reaction to errors; the lack of specialized knowledge derived from research strongly decreases the industry's progressive power and postpones its development. Japan has lagged considerably behind Europe and the US in this aspect. The transformer companies in Japan will have great difficulty in cultural and language communication if they invest in foreign countries. In this study, experts and scholars in the fields of industry, government and academia are interviewed. Questionnaires are issued to the object companies and a comparative case study is conducted to analyze the influencing factors on the competitive edge and strategies in Japan in the hope that an effective reference for improving industrial competitiveness can be available for the government and the companies
This document discusses theories of harm and assessment in exclusionary abuse cases. It provides examples of exclusionary theories of harm such as imperfect financial markets, depriving rivals of scale economies, and raising rivals' costs. It also lists possible efficiencies and justifications for conduct like penetration pricing and scope economies. The document emphasizes that a robust theory of harm must be supported by evidence and economic theory. It discusses types of evidence that can be analyzed, such as prices, costs, documents, and consumer behavior. Practical considerations for assessments like managing resources and dealing with uncertainty are also covered.
The findings of the study suggested that growth is the goal of synergy exploitation. Growth is typically
seen in forecasted and realized revenues at a suitable profit margin. Growth synergies, when experienced, will
improve financial performance depending on the revenue opportunity
This document contains a homework assignment for a Management Information Systems course. It includes 5 questions related to information systems, decision making, competitive environments, value chain analysis, and the role of HTML and email in commercial growth. It provides context and frameworks to answer each question, including definitions and examples related to decision support systems, executive information systems, marketing information systems, office automation systems, school management information systems, partnering, bargaining power of suppliers and buyers, barriers to entry, threats of substitutes, Porter's value chain model, and how HTML and email have helped organizations commercially.
Market Structures and its Composition of Individual FirmsAaron Showers
This document provides an overview of different market structures including perfect competition, monopoly, monopolistic competition, and oligopoly. It then uses an example of an online cookbook business to illustrate how a firm may operate under monopolistic competition. Specifically, the cookbook business would have some control over price due to product differentiation while also facing competition from other similar businesses, reflecting characteristics of monopolistic competition. The document analyzes the costs, revenues, and potential profits of the cookbook business example to demonstrate how a firm's decision-making may differ between short-run and long-run timeframes under monopolistic competition.
This presentation, by Estefania Santacreu-Vasut, Professor in Economics, ESSEC Business School and Chris Pike, OECD Competition Division, was made during the discussion “Gender and competition”, held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/gnc.
This document discusses three main theories of regulation: public interest theories, the Chicago theory of regulation, and public choice theories. Public interest theories view regulation as a way to improve market outcomes and resource allocation when markets fail due to things like natural monopolies, externalities, or information problems. The Chicago theory focuses specifically on economic regulation. Public choice theories and public interest theories both consider social regulation in addition to economic regulation. The document goes on to provide more details on public interest theories and the types of market failures they argue regulation can address.
This presentation by the US DOJ, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.
This presentation by Fiji was made during the break-out Session 3, “Techniques and evidence for assessing predatory pricing, margin squeeze and exploitative abuses” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
The document summarizes India's Competition Act of 2002 and outlines its objectives to promote fair competition in the market. It discusses different anti-competitive practices like cartels and abuse of dominance that the Act prohibits. It also describes the roles and powers of the Competition Commission of India in regulating combinations, enforcing the Act through penalties, and advocating for competitive markets through non-enforcement measures.
This document summarizes key concepts from Chapter 3 of BPL 5100 related to analyzing the business environment and industry forces. It defines environmental awareness and forecasting, discusses favorable and unfavorable conditions for businesses. It then outlines the generic (macro) environment including economic, social, cultural, technological, political/legal factors. Finally, it discusses analyzing industry forces using Porter's five forces model, including rivalry, potential new entrants, supplier power, buyer power, and substitutes.
The document discusses frameworks for analyzing a company's external environment, including Porter's Five Forces model and identifying opportunities and threats. It examines how to define an industry and analyze industry competition. Key parts of the external analysis include assessing the competitive structure, position of rivals, socioeconomic factors, and identifying industry opportunities and threats. The document also discusses analyzing a company's internal strengths and weaknesses.
This presentation by the Directorate for Employment, Labour and Social Affairs, OECD, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.
The document discusses the marketing environment and its impact on a company's ability to serve its customers. It defines the microenvironment as being close actors like suppliers, intermediaries, customer markets, competitors, and the public. The macro environment consists of larger societal forces like demographics, economics, technology, politics, culture and law. It provides examples of opportunities and threats posed by India's changing marketing environment following economic reforms in the 1990s, such as increased competition from multinational companies and removal of subsidies impacting industry viability.
The Analysis of Discrete Structural Alternatives & Separation of Ownership an...Sahar Salehi
The document discusses the separation of ownership and control in organizations. It puts forth two hypotheses: 1) Separation of residual risk bearing from decision management leads to separate decision management and control. 2) Combining decision management and control in a few agents leads to restricting residual claims to those agents. The optimal structure depends on whether information is concentrated or diffuse. Separating functions allows for specialization and risk diversification, but combining them controls agency problems in non-complex settings. Overall, the document analyzes how organizations can structure decision-making, control, and risk-bearing to overcome agency problems.
This presentation by Toh HAN LI, Chief Executive, Competition Commission of Singapore was made during the discussion on "Promoting competition, protecting human rights" held at the 15th Global Forum on Competition on 1 December 2016. More papers and presentations on the topic can be found out at www.oecd.org/competition/globalforum/promoting-competition-protecting-human-rights.htm
This presentation by Korea was made during the break-out Session 3, “Techniques and evidence for assessing predatory pricing, margin squeeze and exploitative abuses” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
Porter Prize is named after Michael E Porter who is Professor at Harvard Business School, living legend and father of modern strategy field. The central idea of the Porter Prize is to propel companies to compete on the basis of value creation, innovation and strategy.
The document discusses the Porter Prize, which recognizes Indian companies that have created strategic advantages through innovation and value creation. It provides an overview of strategic concepts like industry dynamics, positioning, fit, and trade-offs. The prize process involves companies applying online, undergoing a strategy audit, and selected winners being recognized for their strategic accomplishments.
This presentation by Brazil was made during the break-out Session 1, “Techniques and evidence for assessing market power” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
This presentation by Pinar Akman, Professor of Competition Law & Director of Centre for Business Law and Practice, University of Leeds, was made during the discussion “How can competition contribute to fairer societies?”, held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/cfs.
This document provides an overview of mergers and acquisitions. It defines mergers as a transaction where two firms integrate operations on an equal basis to create stronger competitive advantages. Acquisitions involve one company being bought by another. The document outlines key differences between mergers and acquisitions. It also discusses reasons for mergers and acquisitions as well as potential problems. Several major merger and acquisition deals are presented as examples. The process, impacts, and reasons for failure of mergers and acquisitions are summarized.
THE EXTERNAL ASSESSMENT-Strategic Management chpter 3zikrullah bahrun
The document provides details of a group presentation on performing an external audit. It includes the group members' names and student IDs. It then discusses the purpose and process of an external audit, including gathering information on key external factors such as economic, social, cultural, political, and technological forces. It also explains tools for external analysis such as Porter's Five Forces model and how to develop an EFE matrix to evaluate external factors that present opportunities and threats.
This document provides a summary of recent meetings and events from the OECD Competition Committee in November and December 2020. Key highlights include:
- A roundtable discussion on digital advertising markets and potential competition issues in these markets.
- Presentations on standard essential patents in the context of the Internet of Things and disputes around licensing practices.
- A hearing on sustainability and potential conflicts between sustainability and competition goals, and how competition authorities have addressed these issues.
Tes soal ujian nasional sekolah dasar tersebut mencakup soal-soal tentang ilmu pengetahuan alam yang meliputi tumbuhan, hewan, lingkungan, dan ekosistem. Soal-soal tersebut meminta peserta untuk mengidentifikasi ciri khusus tumbuhan dan hewan tertentu, mengklasifikasikan hewan berdasarkan tempat hidup dan cara makan, serta mengidentifikasi hubungan simbiosis antara makhluk hidup.
This presentation, by Estefania Santacreu-Vasut, Professor in Economics, ESSEC Business School and Chris Pike, OECD Competition Division, was made during the discussion “Gender and competition”, held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/gnc.
This document discusses three main theories of regulation: public interest theories, the Chicago theory of regulation, and public choice theories. Public interest theories view regulation as a way to improve market outcomes and resource allocation when markets fail due to things like natural monopolies, externalities, or information problems. The Chicago theory focuses specifically on economic regulation. Public choice theories and public interest theories both consider social regulation in addition to economic regulation. The document goes on to provide more details on public interest theories and the types of market failures they argue regulation can address.
This presentation by the US DOJ, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.
This presentation by Fiji was made during the break-out Session 3, “Techniques and evidence for assessing predatory pricing, margin squeeze and exploitative abuses” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
The document summarizes India's Competition Act of 2002 and outlines its objectives to promote fair competition in the market. It discusses different anti-competitive practices like cartels and abuse of dominance that the Act prohibits. It also describes the roles and powers of the Competition Commission of India in regulating combinations, enforcing the Act through penalties, and advocating for competitive markets through non-enforcement measures.
This document summarizes key concepts from Chapter 3 of BPL 5100 related to analyzing the business environment and industry forces. It defines environmental awareness and forecasting, discusses favorable and unfavorable conditions for businesses. It then outlines the generic (macro) environment including economic, social, cultural, technological, political/legal factors. Finally, it discusses analyzing industry forces using Porter's five forces model, including rivalry, potential new entrants, supplier power, buyer power, and substitutes.
The document discusses frameworks for analyzing a company's external environment, including Porter's Five Forces model and identifying opportunities and threats. It examines how to define an industry and analyze industry competition. Key parts of the external analysis include assessing the competitive structure, position of rivals, socioeconomic factors, and identifying industry opportunities and threats. The document also discusses analyzing a company's internal strengths and weaknesses.
This presentation by the Directorate for Employment, Labour and Social Affairs, OECD, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.
The document discusses the marketing environment and its impact on a company's ability to serve its customers. It defines the microenvironment as being close actors like suppliers, intermediaries, customer markets, competitors, and the public. The macro environment consists of larger societal forces like demographics, economics, technology, politics, culture and law. It provides examples of opportunities and threats posed by India's changing marketing environment following economic reforms in the 1990s, such as increased competition from multinational companies and removal of subsidies impacting industry viability.
The Analysis of Discrete Structural Alternatives & Separation of Ownership an...Sahar Salehi
The document discusses the separation of ownership and control in organizations. It puts forth two hypotheses: 1) Separation of residual risk bearing from decision management leads to separate decision management and control. 2) Combining decision management and control in a few agents leads to restricting residual claims to those agents. The optimal structure depends on whether information is concentrated or diffuse. Separating functions allows for specialization and risk diversification, but combining them controls agency problems in non-complex settings. Overall, the document analyzes how organizations can structure decision-making, control, and risk-bearing to overcome agency problems.
This presentation by Toh HAN LI, Chief Executive, Competition Commission of Singapore was made during the discussion on "Promoting competition, protecting human rights" held at the 15th Global Forum on Competition on 1 December 2016. More papers and presentations on the topic can be found out at www.oecd.org/competition/globalforum/promoting-competition-protecting-human-rights.htm
This presentation by Korea was made during the break-out Session 3, “Techniques and evidence for assessing predatory pricing, margin squeeze and exploitative abuses” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
Porter Prize is named after Michael E Porter who is Professor at Harvard Business School, living legend and father of modern strategy field. The central idea of the Porter Prize is to propel companies to compete on the basis of value creation, innovation and strategy.
The document discusses the Porter Prize, which recognizes Indian companies that have created strategic advantages through innovation and value creation. It provides an overview of strategic concepts like industry dynamics, positioning, fit, and trade-offs. The prize process involves companies applying online, undergoing a strategy audit, and selected winners being recognized for their strategic accomplishments.
This presentation by Brazil was made during the break-out Session 1, “Techniques and evidence for assessing market power” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
This presentation by Pinar Akman, Professor of Competition Law & Director of Centre for Business Law and Practice, University of Leeds, was made during the discussion “How can competition contribute to fairer societies?”, held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/cfs.
This document provides an overview of mergers and acquisitions. It defines mergers as a transaction where two firms integrate operations on an equal basis to create stronger competitive advantages. Acquisitions involve one company being bought by another. The document outlines key differences between mergers and acquisitions. It also discusses reasons for mergers and acquisitions as well as potential problems. Several major merger and acquisition deals are presented as examples. The process, impacts, and reasons for failure of mergers and acquisitions are summarized.
THE EXTERNAL ASSESSMENT-Strategic Management chpter 3zikrullah bahrun
The document provides details of a group presentation on performing an external audit. It includes the group members' names and student IDs. It then discusses the purpose and process of an external audit, including gathering information on key external factors such as economic, social, cultural, political, and technological forces. It also explains tools for external analysis such as Porter's Five Forces model and how to develop an EFE matrix to evaluate external factors that present opportunities and threats.
This document provides a summary of recent meetings and events from the OECD Competition Committee in November and December 2020. Key highlights include:
- A roundtable discussion on digital advertising markets and potential competition issues in these markets.
- Presentations on standard essential patents in the context of the Internet of Things and disputes around licensing practices.
- A hearing on sustainability and potential conflicts between sustainability and competition goals, and how competition authorities have addressed these issues.
Tes soal ujian nasional sekolah dasar tersebut mencakup soal-soal tentang ilmu pengetahuan alam yang meliputi tumbuhan, hewan, lingkungan, dan ekosistem. Soal-soal tersebut meminta peserta untuk mengidentifikasi ciri khusus tumbuhan dan hewan tertentu, mengklasifikasikan hewan berdasarkan tempat hidup dan cara makan, serta mengidentifikasi hubungan simbiosis antara makhluk hidup.
El documento define el teletrabajo como la prestación de servicios utilizando tecnologías de información y comunicación sin presencia física en la empresa, bajo control y supervisión remotas. Describe varios principios del teletrabajo como la voluntariedad, igualdad de derechos, capacitación, privacidad, seguridad e higiene, y protección a la maternidad. También destaca los beneficios como la conciliación trabajo-familia, mayor productividad, ahorro de costos, inclusión laboral, y menor impacto ambient
El documento define varios términos clave relacionados con computadoras y sistemas operativos. Define palabras como computadora, software, hardware, sistema operativo, memoria RAM, antivirus, protocolos TCP/IP y más. Explica conceptos como monotarea, multiusuario, drivers, vacunas, HTML y otros componentes básicos de una computadora y su funcionamiento.
Este documento proporciona información sobre energía renovable. Define la energía renovable como la energía que utiliza los recursos de la naturaleza. Menciona cinco fuentes principales de energía renovable: energía mareomotriz, energía hidráulica, energía eólica, energía solar y energía de biomasa. Luego proporciona ejemplos e imágenes de cada fuente, incluidas represas hidroeléctricas en Colombia, parques eólicos y paneles solares. También describe brevemente la energía hidr
This document is a curriculum vitae for Augustine Amal D' Rozario, who has 27 years of experience working for international and national organizations. He holds an MBA and is currently an Area Development Program Manager at World Vision Bangladesh, where he oversees program management, financial management, team management, networking, and reporting.
1) Eric James cheats on his girlfriend Lela Luxman by meeting up with Angelica Smith in the park, where Lela sees them flirting.
2) Lela confronts Eric about cheating and ends their relationship. Eric tries to apologize and win Lela back by buying her gifts.
3) After seeing Lela with a new boyfriend, Eric gets into a fight with the new boyfriend outside a restaurant.
4) In the end, Lela agrees to meet with Eric again and they reconcile, hugging and getting back together as the story ends happily.
Sistema De Gestión Para Campañas PoliticasGATEWAY TI
El sistema de información electoral le
permite administrar, gestionar y evaluar
los procesos que se ejecuten en la
campaña en tiempo real, garantizando la
veracidad de la información entre los
diferentes actores activos.
¿La gente lleva el uniforme o el uniforme lleva a la gente?Unibrand
El documento discute el concepto de uniformes y su uso en organizaciones. Define un uniforme como un atuendo estándar que funciona como símbolo para identificar diferentes grupos y ayuda a codificarlos de un vistazo. Los uniformes también ayudan a las empresas a comunicar su marca e imagen corporativa. Aunque los uniformes han sido criticados como anticuados, siguen siendo útiles para hacer que los empleados se sientan parte de una compañía y marcar tendencia, y la necesidad humana de formar colectivos asegura que continuarán us
The main objective of this study was to establish the effect of Mergers and Acquisition (M&A) on a firm’s competitive advantage in the IT industry. A descriptive research approach was adopted with a target population comprising of all employees atHewlett Packard Company (HP) in Nairobi, Kenya.Horizontal mergers were found to be the most common types of mergers. These mergers weremainly driven by external economies of scale, market power, combined complimentary resources and customer service quality. The findings also established that the major elements of competitive advantage were volume of transactions and markets share. External economies of scale, market power and combined complimentary resources contributed positively to competitive advantage while surplus funds and idle resources did not drive competitive advantage. Based on the study,researchers recommended that decisions on M&A should be based on first understanding which facets of the business will be driven by the M&A in order to derive a competitive advantage. In addition, there is need for companies to do progress evaluation of the M&A specifically to review its impact on competitive advantage.
M- this should link from Snell's profile. Under links let's title this as "Global Business Realities and the Impact on Energy Refineries."
It's a more descpritive title than how he has titled the actual article, I think.
The document discusses competition law and policy in India. It provides definitions of key concepts like competition and anti-competitive practices. It summarizes the Competition Act of 2002, which established the Competition Commission of India. The Commission regulates anti-competitive agreements and mergers/acquisitions. The document also discusses advocacy efforts to promote competition.
This presentation by Giulio Federico, Head of the Unit in the Chief Economist Team of DG Competition, European Commission, was made during the discussion “Merger Control in Dynamic Markets” held at the 18th meeting of the OECD Global Forum on Competition on 6 December 2019. More papers and presentations on the topic can be found at oe.cd/mcdym.
Porter's five forces model is a framework for analyzing industry competition and profitability. It examines the competitive forces that determine industry attractiveness: threat of new entrants, power of suppliers/buyers, threat of substitutes, and rivalry among existing competitors. While still valuable, critics argue it may overlook industry dynamics and convergence. Later research emphasizes incorporating technological changes, multi-level industry analysis, and potential for complementary products when applying the five forces model.
Here is an analysis of the proposed merger between United Insurance Company and Shama Pl:
Valuation Process:
- Determine the pre-merger value of each company using standard valuation methods like DCF, comparable company analysis, precedent transaction analysis etc.
- Estimate synergies from the merger like cost savings, revenue enhancements, tax benefits etc. Quantify the net present value of synergies.
- Allocate synergies between the combining companies based on relative size, synergies realized from each function etc.
- Add allocated synergies to the pre-merger value of each company to arrive at post-merger value.
- Determine exchange ratio for the merger based on post-merger values.
The document discusses European Union competition law regarding mergers. It defines different types of mergers like horizontal, vertical, and conglomerate mergers. It explains the purpose of merger control is to maintain competition and prevent the formation of monopolies that could harm consumer welfare. Merger control evaluates whether a merger could allow the merging companies to unilaterally exercise power over the market and reduce competition. Theories of potential competitive harm from mergers include unilateral or non-coordinated effects where competition between the merging companies' products is eliminated.
This document discusses the structure of corporate acquisitions in the United States. It notes that there are three main ways to acquire control of another company: asset acquisition, stock acquisition, and merger. It also mentions that triangular mergers are sometimes used as a solution. The document outlines key US laws that govern mergers and acquisitions, including the Securities Act of 1933, Securities Exchange Act of 1934, Williams Act of 1968, Hart-Scott-Rodino Act, and insider trading laws/Rule 10b-5. Institutional shareholders can apply pressure to encourage restructuring or seeking a merger if management does not adequately respond to their concerns.
This document discusses gaps and challenges in Ethiopia's enforcement framework for consumer protection. It begins by providing context on consumer protection and competition law. Effective enforcement strategies discussed include taking preventative and educational approaches rather than punitive ones, prioritizing areas of intervention based on risk assessment, and coordinating enforcement among relevant institutions. The document then assesses Ethiopia's enforcement framework, arguing there is a lack of decentralization of consumer protection authorities and failure to include major stakeholders. It also notes a lack of pre-intervention study, failure to prioritize high consumer risk areas, and failure to address anti-competitive practices. Overall, the document argues Ethiopia needs to empower and enable enforcement institutions to better promote competition and protect consumers through legal
Mergers Acquisitions and Other Restructuring Activities 9th Edition DePamphil...lujepyce
Full download : http://alibabadownload.com/product/mergers-acquisitions-and-other-restructuring-activities-9th-edition-depamphilis-solutions-manual/
Mergers Acquisitions and Other Restructuring Activities 9th Edition DePamphilis Solutions Manual
The document discusses various strategic analysis frameworks and concepts including:
1. The PESTEL framework which categorizes environmental influences into political, economic, social, technological, environmental and legal factors.
2. Key drivers of change that are likely to have a high impact on strategy success or failure.
3. Scenario mapping which develops plausible future scenarios based on key uncertain drivers, in order to analyze strategic options.
4. Porter's five forces framework which assesses the attractiveness of an industry based on the threat of entry/substitutes, and bargaining power of buyers/suppliers and competitive rivalry.
5. Types of industries such as monopolistic, oligopolistic, perfectly competitive, and
This chapter discusses competitive rivalry and competitive dynamics. It presents a model of competitive rivalry that includes competitor analysis, drivers of competitive behavior, interim rivalry, and outcomes. Market commonality, which is the number of shared markets between competitors, and resource similarity are described as important factors for competitor analysis. The chapter also examines how competitive dynamics are affected by factors such as the likelihood of competitive actions and responses, organizational characteristics, and the type of market in terms of its cycle.
Exploring the possibility of coordinating competition policy and consumer pro...Deswin Nur
This document discusses the possibility of coordinating competition law and consumer protection law in Indonesia. It notes that both laws were enacted in 1999 as part of broader legal reforms. While they share the common ultimate objective of a well-functioning market, they have been implemented by different agencies and have diverse progress. Potential areas of coordination discussed include advocacy efforts and public awareness campaigns, though full integration faces challenges due to different legal procedures and institutional structures between the competition and consumer protection authorities.
The document discusses competition and India's competition policy and law. It defines competition and explains its importance for consumers and economic growth. It outlines the objectives of India's competition policy to promote efficiency, innovation, and economic growth.
The key points are:
1. The Competition Act of 2002 established the Competition Commission of India to prevent anti-competitive practices and promote fair competition.
2. The Act prohibits anti-competitive agreements between enterprises, abuse of dominant market positions, and regulates combinations/mergers that reduce competition.
3. The goal of the competition policy is to preserve fair competition, promote efficiency, encourage innovation, and support sustained economic growth.
The document discusses competition law and policy in India. It defines competition and outlines the benefits of competition for companies, consumers, and the government. However, it notes that these benefits are lost without fair competition or if a monopoly exists. It then discusses key aspects of competition law and policy in India such as the objectives to promote economic efficiency and protect consumers, types of anti-competitive agreements and abuse of dominance, the role and powers of the Competition Commission of India, and penalties for anti-competitive behavior.
This presentation by US FTC was made during the break-out session “Efficiency Effects & Design of Remedies” held at the 18th meeting of the OECD Global Forum on Competition on 6 December 2019. More papers and presentations on the topic can be found at oe.cd/mcdym.
The contemporary business environment has been highly complex and dynamic with organizations facing unprecedented amount of competition due to globalization and technological innovations. Merger and acquisition is one of the most popular organization strategy that organizations apply when faced with this kind of operating environment acquiring resources, skills, and competencies beyond their organization control. Many studies have been done to support implementation of M&As within organizations but they have indicated conflicting outcomes with some showing that it negatively affect organization performance and others indicating they positively affect performance. However, none of the studies done has concentrated on the effect within the privately traded organizations and very few but conflicting studies have been done on this relationship in Kenya. This study therefore sought to assess the effects of merger and acquisition on the performance of privately trading organizations in Kenya. The study was grounded upon the efficiency theory, the market power theory, and economic production theory. Reviewed literature revealed existing gaps related to the literature. The study adopted descriptive research design on short run data collected at UAP Insurance within the pre-merger (2012-2014) and post-merger (2015-2017) periods for various performance statistics, where descriptive analysis was applied to assess the differences and independent sample t-test. The study found that M&A affects the net profit margin, Return on Assets, Return on Equity, and earnings per share with all these performance indicators showing that the post-merger period had poorer performance than the pre-merger period. The study further observed that the M&A implementation caused serious disruptions in the operating environment and organization culture of the organization, which was bound to have negative implications on organization performance, employees and shareholders. The study recommends that organizations should avoid M&A strategy unless their current assets are able to fund their current liabilities beyond the short run period, as the declined performance was linked to the disruptions experienced from M&A implementations. The study also recommends that M&A intended changes should occur sequentially to cushion the organization internal operations from the disruptions due to the changes. Study suggests further studies assessing the long term impact of M&A on organization performance.
This document provides an introduction to strategic management. It discusses key concepts like strategic competitiveness, competitive advantage, the strategic management process, and above-average returns. It also examines models for achieving above-average returns, including the industrial organization model and resource-based model. Additional topics covered include vision and mission, stakeholders, the role of strategic leaders, and analyzing profit pools. The overall document provides a high-level overview of strategic management principles and frameworks.
Competition policy, cartel enforcement and leniency programDr Danilo Samà
Competition policy, cartel enforcement and leniency program
Author:
Dr Danilo Samà (LUISS “Guido Carli” University)
Abstract:
The present assessment focuses on the antitrust action in detecting and fighting oligopolistic collusion, analyzing the development of the innovative and modern leniency policy. Following the examination of the main conditions and reasons for cartel stability and sustainability, our attempt is to comprehend under which circumstances leniency program represents a functional and successful tool for preventing the formation of anti-competitive agreements.
Keywords:
cartels enforcement, competition policy, game theory, leniency program, oligopolistic markets
JEL classification:
C70; K21; L13
Year:
2008
Pages:
1-12
Citation:
Samà, Danilo (2008), Competition policy, cartel enforcement and leniency program, LUISS “Guido Carli” University, Rome, Italy, pp. 1-12.
The document summarizes India's Competition Act of 2002. The Act aims to promote fair competition in the market and protect consumer interests. It prohibits anti-competitive agreements between businesses like price fixing. It also prevents abuse of dominant market positions. The Act regulates mergers and acquisitions that could reduce competition. Review of combinations is subject to thresholds based on company turnover to encourage business growth. The Competition Commission of India enforces the Act and ensures open competition.
Similar to Economies (Efficiencies) – An Essential Consideration in Merger Analysis - KK Sharma (20)
India: Prohibition of Anti-Competitive Agreements and Abuse of Dominant PositionKK SHARMA LAW OFFICES
“Unlike the time when recall value of competition was associated only with examinations or sports, the awareness about competition law has come a long way when almost every other day CCI is in the news for reprimanding the erring
market players. Fines for anti-competitive conduct are huge as seen in cases such as that of DLF and cement companies. Having completed a little over four years of active enforcement and nearly ten years of advocacy, CCI has carved a niche for
itself. The author, Mr. K K Sharma, Chairman, KK Sharma Law Offices and former Director General, CCI, having the rare privilege of both drafting and implementing the law as well as being at the cutting edge by way of sculpting the
very first investigations and heading Merger Control and Anti-trust Divisions looks back and sums up the four years of cartel enforcement in India in this article.“
Economies (Efficiencies) – An Essential Consideration in Merger AnalysisKK SHARMA LAW OFFICES
The document discusses the evolving consideration of efficiencies (economies) in merger analysis under competition law. It notes that while competition law aims to preserve competition, the essential objective is efficient market outcomes. Most jurisdictions now accept efficiencies as a justification for approving mergers. However, quantifying and weighing efficiencies can be complex. The document examines how the US, Canada, and Australia incorporate efficiencies in their merger analysis, representing three approaches: as part of substantive assessment, as a defense, and through authorization. It concludes there is need for transitional economies like India to recognize efficiencies in competition law and policy.
“ India recently completed a little over two years of regulation of combinations.
In contrast to the exaggerated fears associated with the likely bringing into force
of the provisions relating to regulation of combinations before the provisions
were actually notified w.e.f. June 1, 2011, the two years have passed rather
peacefully. The author , Mr. K K Sharma, former Head of Merger Control and
Director General, CCI, who laid the foundations of regulation of combinations
in India by way of devising the Merger Review Format as well as making it
successfully functional , reviews the performance of Competition Commission of
India in regulation of combinations and discusses the associated issues. He also
throws light on merger filing Form 1 which is almost the simplest in the world
for a jurisdiction having almost the highest thresholds in the world. He places on
record the deft handling of the regulation of combinations by CCI.”
This document discusses some areas for potential improvement in the functioning of the Competition Commission of India (CCI). It notes that over 7 years, the CCI has not grown as effectively as expected given the size of India's economy and prevalence of anticompetitive practices. The document discusses three key areas - institutionalizing institutional memory to avoid repeating work, improving how information from informants is dealt with to protect identities and encourage more cases, and making greater use of sua sponte investigations instead of just reacting to cases. Maintaining proper records and knowledge management could help the CCI function more effectively.
Some Thoughts for CCI-II: Participatory Competition Law EnforcementKK SHARMA LAW OFFICES
Carrying forward, the theme of an earlier article, the author looks at the authorised
representation before the Competition Commission of India (‘Commission’) and
whether it continues the way it was envisaged in the Act or tilting in favour of
any particular profession. He also examines the newly started practice of the
Commission calling the opposite parties during the preliminary hearings with
the informant to fully understand the matter. There were certain amendments
introduced to the Competition Act, 2002(‘Act’) in September, 2007. The issue
being examined in this article also includes the point if this practice is compatible
with the amendments of 2007 to the Act.
The author who not only was closely involved in amendments of 2007, drafting
regulations for the functioning of the Commission and headed the Antitrust
Division of CCI but was also the first Director General of the functional
Commission discusses the compatibility of this new practice with the probability
of success of investigation process in this article.
Counter Point - V: First Economic Study in DG Report to examine two models of...KK SHARMA LAW OFFICES
Ever since the time when the powers of enforcement were conferred on the
Competition Commission of India (CCI) in May, 2009, there has been a
continuous evolution of the competition law in the country in the form of decisions
of the CCI in various informations brought before it. Amongst various cases
before it, the case No. 3 of 2009, one of the very first cases before the CCI was
interesting from many angles. First of all, this was the first instance where the
help of economic anlysis was taken by Director General (DG), in his report to
arrive a t his findings. Secondly, it was a case where, three associations of travel
agents were actively involved in boycott of an airlines wheres the other three
associations were not actively involved in the boycott but their names were used
by the remaining three associations in the agitation. The ‘not active’ associations
had also not hauled by the three ‘active’ associations for use of their name in their
hoardings but had also not contributed towards the funding of the agitations
without any visible resistance from the ‘not active’ associations.
The author who supervised the preparation of the report of the DG for the Commission
also introduced economic analysis in this case for the first time as the very first
Director General of the functional Competition Commission of India looks back at
the case and the dissenting orders passed by two Members of the CCI
Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector- Cas...KK SHARMA LAW OFFICES
As done in some of the previous issues of Competition Law Reporter (CLR),
continuing with the series on dissenting and separate orders of different members
of the Competition Commission of India (Commission) in some of the cases, in
this write up the focus is on an old case filed before erstwhile MRTPC and
transferred to the Commission under the scheme, provided under the Competition
Act, 2002 (the Act ), to deal with such cases on repeal of MRTPC Act, 1969 and
commencement of enforcement of the Act w.e.f. May 20,2009. This was followed
by similar informations filed before the Commission alleging anticompetitive
practices in pharmaceutical distribution and retail sector. Various studies have
documented the prevalence of a number of anticompetitive practices in the
pharmaceutical sector which are so deeply entrenched that even pharmaceutical
giants have to succumb to them. The reason of successful perpetuation of these
anticompetitive practices is that the players responsible for initiation of these
practices and their continuation have not only have a wide reach across the
country but are extremely well organised. Interestingly, most of these informations
landed before the Commission because of the infighting amongst members of the
associations responsible for these practices or when one or some of the office bearers
of these associations became too domineering with other ordinary members. The
author, who as the first Director General of the Commission put the competition
law investigation framework in place and supervised the very first investigations,
looks at the different orders passed by the Commission and its members and the
way similar issues were handled in other jurisdictions worldwide.
Way back in September, 2007, the Competition Act, 2002 (the Act) was amended
by the Competition (Amendment ) Act, 2007 ( the Amendment Act). This had
become necessary on account of numerous legal challenges to the implementation
the competition law in India despite the enactment of the Act in January, 2003.
These amendments added an altogether new chapter creating a new appellate
structure in between the decisions of the Competition Commission of India (the
Commission) and the Supreme Court which was not existing in the original Act
as enacted in January, 2003. Thus came into existence a new body known as the
Competition Appellate Tribunal (COMPAT). In addition to this amendment,
the Amendment Act also made many significant amendments to the Act. One
such amendment was replacement of the word ‘complaint’ with ‘ information’ in
section 19 of the Act. This write up limits itself to looking only at this amendment
to section 19 of the Act.
The author who assisted the Commission in drafting the regulations for various
aspects of the functioning of the Commission and headed the Antitrust Division
of CCI to actually implement these regulations in real practice and also was the
first Director General of the functional Competition Commission of India
examines the implication of this amenmdment in this article.
Compared to the other enforcement provisions of the Act, the merger control
provisions, or regulation of combinations as these are called in India, are of more
recent origin. The regulations drafted by the Competition Commission of India
(the Commission) for regulation of the combinations, in an attempt to make the
combination regulations more business friendly, have given a window of not filing
the merger filings before the Commission in some cases of combinations where the
possibilities of the Appreciable Adverse Effect on Combination (AAEC) are lesser.
The question arises as to how to deal with the instances where the parties do not file
the details of any combination and the Commission is of the opinion that the
combination either causes or is likely to cause an AAEC in the relevant market.
The author, who was the architect of the introduction of schedule 1 for the
exempt type categories while drafting the combination regulations for India as
the first Head of Merger Control in India and thus making regulation of
combinations a reality in India, delves deep into the issue and looks at the possible
solutions. In his view, the Commission still has freedom to act against any
combination causing AAEC – whether above or below thresholds.
The Competition (Amendment ) Bill, 2012, Bill No. 136 of 2012 ( the Amendment
Bill 2012) lapsed before it could become a law because of the dissolution of the then
lower house of Parliament just before the general elections leading to the present
Government, at the centre, came to power. One of the amendments, proposed in
this Amendment Bill 2012, sought to make changes in Section 26 of the Act to
allow some clear lee way to the Competition Commission of India (Commission) to
differ from the report of the Director General(DG) and close the matter despite the
DG having come to the conclusion that there is a violation of competition law
after he has investigated into the allegations of violations of competition law. Such
clarity, sought to be introduced by the Amendment Bill, 2012, is missing in the
relevant provisions of the Act as they stand today. In the appropriate provisions, as
they exist today, there is enough room for inquiry by the Commission in addition
to the investigation by the Director General(DG) after investigation by DG is
done. The natural corrollary is that a poorly investigated report by DG can not be
either a basis or excuse for not upholding violations of competition law if found in
a prima facie opinion of the Commission. However, it is a moot point if this part of
the mandate is being fully exercised at present or not.
It is this part of inquiry by the Commission after the report has been submitted by
the DG which the author, who headed the Antitrust Division of CCI to actually
see the implementation of functional regulations in real practice and also assisted
the Commission in drafting these regulations, discusses in this article.
The Competition Commission of India(CCI) had imposed a penalty of Rs. 672 Crores, cumulatively, on four public sector general insurance companies. All the four companies preferred an appeal before the Competition Appellate Tribunal
(COMPAT). In its appellate order, the COMPAT did not disagree with CCI as far as the applicability of penalty was concerned but reduced the quantum by Rs. 670 Crores.
The write up discusses ONLY the factual aspects of the case, strictly for academic purposes, WITHOUT airing any personal opinions on the issue. This is being done on account of the fact of the author being professionally involved in the matter.
Baby Steps of Competition Law Jurisprudence in Pharmaceutical Sector - K.K. S...KK SHARMA LAW OFFICES
The document summarizes an order by the Competition Appellate Tribunal (COMPAT) regarding appeals in the pharmaceutical sector. The order disposed of multiple appeals related to alleged anti-competitive practices by chemists' associations.
The key issues addressed were requirements for pharmaceutical companies to obtain no-objection certificates or product information service approvals from chemists' associations, as well as fixed trade margins. The appellants argued the investigation conducted by the Director General was flawed and violated principles of natural justice. COMPAT analyzed the relevant sections of the Competition Act and regulations at length before determining the Commission is bound by principles of natural justice in its adjudicatory functions.
Counter Point - III: Anti-competitive Practices in Pharmaceutical Sector -Cas...KK SHARMA LAW OFFICES
As done in some of the previous issues of Competition Law Reporter (CLR), continuing with the series on dissenting and separate orders of different members of the Competition Commission of India (Commission) in some of the cases, in
this write up the focus is on an old case filed before erstwhile MRTPC and transferred to the Commission under the scheme, provided under the Competition Act, 2002 (the Act ), to deal with such cases on repeal ofMRTPC Act, 1969 and
commencement of enforcement of the Act w.e.f.May 20,2009. This was followed by similar informations filed before the Commission alleging anticompetitive practices in pharmaceutical distribution and retail sector. Various studies have documented the prevalence of a number of anticompetitive practices in the pharmaceutical sector which are so deeply entrenched that even pharmaceutical
giants have to succumb to them. The reason of successful perpetuation of these anticompetitive practices is that the players responsible for initiation of these practices and their continuation have not only have a wide reach across the
country but are extremely well organised. Interestingly,most of these informations landed before the Commission because of the infighting amongst members of the associations responsible for these practices orwhen one or some of the office bearers of these associations became too domineering with other ordinary members. The author, who as the first Director General of the Commission put the competition
law investigation framework in place and supervised the very first investigations, looks at the different orders passed by the Commission and its members and the way similar issues were handled in other jurisdictions worldwide.
Some Thoughts for CCI-II : Participatory Competition Law Enforcement - K K Sh...KK SHARMA LAW OFFICES
Carrying forward , the theme of an earlier article, the author looks at the authorised representation before the Competition Commission of India (‘Commission’) and whether it continues the way it was envisaged in the Act or tilting in favour of any particular profession. He also examines the newly started practice of the Commission calling the opposite parties during the preliminary hearings with the informant to fully understand thae matter. There were certain amendments introduced to the Competition Act, 2002(‘Act’) in September, 2007. The issue being examined in this article also includes the point if this practice is compatible with the amendments of 2007 to the Act.
The author who not only was closely involved in amendments of 2007, drafting regulations for the functioning of the Commission and headed the Antitrust Division of CCI but was also the first Director General of the functional Commissiondiscusses the compatibility of this new practice with the probability of success of investigation process in this article.
Reality Bites: A Review of Penal Provisions under the Competition LawKK SHARMA LAW OFFICES
Despite being a new law in its own right, the Competition Act, 2002 (the Act)
is still perceived as a successor to the Monopolies and Restrictive practices Act,
1969 (MRTPC Act). There is a need for a better appreciation that, unlike MRTPC,
the CCI has adequate powers to deal with the delinquent enterprises, to ensure
that it is in a position to effectively fulfill the mandate given to it. Through a
discussion of the penal provisions of the Act, the author, who played a pioneering
role in establishing the CCI, sets the record straight about the adequate penal
powers given to the CCI to be in a position to be an effective regulator by making
a comparison between the earlier MRTPC regime and, after its repeal, the present
competition regime under CCI. On comparison, the author feels that the CCI
has adequate powers to deal with the responsibility entrusted to it.
Combination Review in India: Lessons So Far - Part II - KK SharmaKK SHARMA LAW OFFICES
In the immediately preceding issue, the performance of the CCI in the task of
regulations of combinations, as compared to international standards, was discussed
and found to be really impressive for any new competition agency. However, this
experience in regulation of combinations has thrown up interesting lessons in
merger control. In this concluding part, the author, who laid down the basic
analytical and procedural framework for combination review, as the first Head of
Merger Control CCI, in India, takes a look at the lessons from the journey in
merger control so far in India. The comparisons with other jurisdictions throw
up extremely interesting results as seen here in this concluding part.
Combination Review in India: A Mid-year Review (Part I) - K.K. SharmaKK SHARMA LAW OFFICES
In this two-part article, the first part of which appears here, the author, the chief
architect behind the review format of Merger Review in India, takes a look at the
performance of the Competition Commission of India (CCI) in handling the
regulations of combinations (merger review) in India and how does it compare
with international standards. The stark contrast between the anxious reactions
before the regulations of combinations came into force and the deafening silence,
even after 19 approvals have been given by the CCI, has also been briefly touched
upon. The next part, to follow, shall deal with the lessons arising from the
journey of merger control in India so far.
Automobile Manufacturers Fined for Restricting Access to Replacement Parts - ...KK SHARMA LAW OFFICES
Competition Law and Intellectual Property Rights (IPRs), since ages, have had a difficult marriage. As is popularly believed that a happy, successful and enduring marriage, between spouses, is good for the growth, stability and future development of the children, nearly in a similar way, it is necessary for this marriage between competition law and IPRs for the overall and long-term benefit of the society. IPRs are statutorily given monopolies and these are given for good reasons to induce inventions and other creative outcomes from some gifted members of the society to be revealed to the society at large so that , in exchange for granting of short term monopoly to the contributor of the IPRs, the society is revealed the new inventions and creations which become publicly available after the lapse of statutorily granted monopoly time period. During the period during the grant of these statutorily allowed monopolies, the holder of IPRs is permitted reasonable protection under competition law as well. The order in automobiles spare parts’ case passed by CCI on the question of reasonableness is an important landmark in this area of jurisprudence of IPRs and competition law. The author, who as the first Director General of functional Competition Commission of India, established the competition law investigation framework in India, looks back at this order of CCI in this piece.
Importance of Being a Member of CCI : Order in Jypee Case --K K Sharma KK SHARMA LAW OFFICES
Recently, the Competition Commission of India(Commission or CCI) came up with, perhaps, its first very closly contested order wherein a majority of 3 members held that the Jaypee Group was not in a dominant position in the relevant market of ‘residential units’ in Noida and Greater Noida and , therefore, was not to be imposed any penalty upon for abuse of dominant position. On the other hand, a minority of 2 Members imposed a penalty of Rs. 666 crores on the group for abusing its dominant position in the relevant market of ‘integrated townships’ in Noida and Greater Noida.This was a case wherein the DG was asked to submit a supplementary report after carrying out further investigations. The DG submitted his supplementary report which substantially differed from the earlier finding by the DG as far as the dominant position was considered. It was this aspect of the matter which dramatically changed the contours of the case. After the new recommendations of the DG pointed to considerably changed position and held Jaypee group to be dominant in the newly defined relevant market as suggested by the Commission, the majority opinion differed from this new finding and went back to the earlier finding of DG and thus not imposing penalty on the group but the minority went ahead and imposed a penalty. The author who headed the Antitrust Division of CCI , when now well known case of DLF was being examined within CCI, and was the first Director General of the functional Competition Commission of India and made the architecture for the competition law investigation in the country looks at this interesting order in this write up.
A 360 Degree Review of Penal Provisions’ Application under Competition Law ...KK SHARMA LAW OFFICES
Perhaps not many laws have been subject to so much public scrutiny as competition law either before its enactment or afterwards. Almost immediately after its enactment, just after a duly appointed Member had assumed office and before a duly appointed Chairman could enter office, the Competition Act, 2002(Act) was challenged on various counts. This resulted in a very strange situation. The Competition Commission of India (CCI) could not be called a Commission in terms of the Act which needed a minimum quorum of a Chairman and, at least, two Members for being a legally recognized Commission. So, the CCI remained a one Member body (not a full Commission) till as late as March 1, 2009 when, for the first time, a Chairman and two Members were in office and the CCI, in the eyes of law, was a full Commission. The enforcement powers to CCI came in stages. In first phase only advocacy functions were allowed. This was followed by antitrust enforcement powers being given to the Commission from May 20, 2009. Thereafter, regulations of combinations (popularly known as Merger Review) came into force with effect from June 1, 2011. There were always fears that the CCI may turn out to be as effective (or ineffective depending upon one’s perspective) as MRTPC. Now, that five years have passed since the time the CCI began to get its enforcement powers, it is high time to look back if the fears about the efficacy of the powers given to the CCI were justified or misplaced. The author, the only official in senior echelons of the CCI who not only saw the transition from a CCI doing only competition advocacy to a fully functional Commission but also played a very crucial role in this transition by way of being the very first Director General of the functional CCI, laying down the investigative framework of investigation, and later as the first head of Merger Control who gave the country its very efficient Merger Review Format, takes a look at this issue.
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The legal profession, which has historically been male-dominated, has experienced a significant increase in the number of women entering the field over the past few decades. Despite this progress, women lawyers continue to encounter various challenges as they strive for top positions.
Business law for the students of undergraduate level. The presentation contains the summary of all the chapters under the syllabus of State University, Contract Act, Sale of Goods Act, Negotiable Instrument Act, Partnership Act, Limited Liability Act, Consumer Protection Act.
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Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
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Economies (Efficiencies) – An Essential Consideration in Merger Analysis - KK Sharma
1. Competition Law ReportsB-56 [Vol. 1
COMPETITION LAW REPORTS (JAN. - FEB. 2011)
Economies (Efficiencies) – An Essential Consideration
in Merger Analysis
Kaushal Sharma,* Shankar Singham** and Sriraj Venkatasamy***
While the purport of competition law is to preserve and promote competition, the
essential object of competition is to ensure optimal allocation of available resources,
produce more while using less resources and thus, achieve efficient market
outcomes. Generally, the efficiency is accepted as a defence in competition law.
Ignorance of economies (efficient use of resources) by competition law and
competition enforcement agencies would prejudice the very object of preserving
competition. However, one should also acknowledge that scientific quantification
and weighing of efficiencies are complex tasks.
Like any other law, the competition law jurisprudence is an evolving organism.
In nearly all jurisdictions, there were times when merger review was limited to
anticipation of acquiring of market power by the combining enterprises. It was
not uncommon to see that, sometimes, market power was also confused with
market share of the combined entities after merger. With introduction of economic
concepts and more and more reliance on economics, the situation is fast changing.
In present day competition law jurisprudence, it is no more a mechanical reliance
on the anti competitive effects of a merger, but these anti-competitive effects
have to be examined in the background of obtaining efficiencies.
No doubt, there is greater realisation than ever before to give efficiencies their
due. So much so that the in the later merger control regimes such as India, along
with efficiencies, even economic development of the country is being taken as a
factor for consideration in merger review.
This paper attempts to examine the ongoing evolution by tracing the role of
efficiencies in merger (business combinations) analysis in view of the merger
control law/guidelines of US, Canada and Australia. The authors conclude that
there is a great need for transitional economies to recognise merger efficiencies in
their competition law/policy and judiciously apply them.
If neither the courts nor the enforcement agencies are sensitive to these (efficiency)
considerations, the system fails to meet a basic test of economic rationality. And without
this, the whole enforcement system lacks defensible standards and becomes suspect.
—Oliver Williamson†
* Advisor (Law) in-charge of Merger Control and former Director General, Competition
Commission of India. E-mail: kksharmairs@gmail.com.
** Partner, Squire Sanders. E-mail: ssingham@ssd.com
*** Competition Law professional and former intern, Competition Commission of India. E-
mail: srirajvenkat@gmail.com
† “Economies as an Antitrust Defence: The Welfare Tradeoffs”, The American Economic
Review, Vol. 58, No. 1 (Mar., 1968), pp 18-36, at p 34
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While the purport of competition law is
to preserve and promote competition, the
primary rationale behind competition is
to ensure optimal allocation of existing
resources and thus achieve efficient
market outcomes.1
Universally, efficiency
is accepted as a justification for approving
an outcome provided the welfare
consequences of the outcome in question
outweigh its ill-effects. Ignorance of
economies (efficient use of resources) by
competition law and competition
enforcement agencies would prejudice the
very object of preserving competition.
However, one should also acknowledge
that scientific quantification and
weighing of efficiencies are complex tasks.
Further, trade-off between efficiency and
anticompetitive actions is one of the
muddled areas of competition
jurisprudence.
This paper attempts to trace the role of
efficiencies in merger (business
combinations) analysis with the
regulatory practice in US,2
Canada and
Australia as a back drop. Also, the paper
attempts to briefly discuss the provisions
of Indian Competition Act, 2002 relating
to merger efficiencies in a novel way.
A. Efficiencies
Besides the difficulty in quantifying
efficiencies, it is also very difficult to
define the concept. It is also not
appropriate to have an exhaustive
definition or explanation that covers all
the instances of efficiencies. In general,
efficiencies are improvements that serve
public interest and benefit the society at
large. In this regard, one may also
conclude that any improvement
prejudicial to public interest may not be
recognised as efficiencies for the purpose
of competition law.
ICN Merger Guidelines Work Book3
reads
that “Efficiencies include cost savings,
more intensive use of existing capacity,
economies of scale or scope, or demand-
side efficiencies such as increased
network size or product quality. They
might also encompass pro-competitive
changes in the merged entity’s incentives,
for example, by capturing
complementarities in R&D activity,
which in turn might increase incentives
to invest in product development in
innovation markets”.
Components of efficiencies, for the purpose
of competition law, may be broadly
classified as allocative, productive,
dynamic, and transactional.4
All these
components evidence better resource
management in one way or the other.
Significant majority of the mergers are
motivated by the possibility of the resulting
entity achieving these efficiencies.
(i) Productive efficiency
These are commonly recognised across
jurisdictions which imply higher
production with existing or lesser input.
These efficiencies reduce cost of production
and are quantified scientifically.
Productive efficiencies includes:
• Economies of scale–These refer to
benefits yielded out of larger units
of production with existing capital
1 OECD, “Competition Policy and Efficiency Claims in Horizontal Agreements” (1994),
OECD/GD (96)65, at p 1.
2 The discussion on US position is in line with the “1992, Horizontal Merger Guidelines (with
8th
April, 1997, revisions to Section 4 on efficiencies)”
3 ICN Merger Working Group: Investigation and Analysis Subgroup, “Merger Guidelines
Work Book” [2006], at p. 62.
4 Kolasky, William J. and Andrew R. Dick, “The Merger Guidelines and the Integration of
Efficiencies into Antitrust Review of Horizontal Mergers”, US Department of Justice: http:/
/www.usdoj.gov/atr/hmerger.htm, Celebration of the 20th anniversary of the Guidelines,
10th
June, 2002, at p. 49.
Economies (Efficiencies) – An Essential Consideration in Merger Analysis
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assets. Scale benefits include
optimal utilisation of captive plants
and reduction in cost incurred out
of operations and investment in
fixed assets. Scale benefits may
arise at product level, plant level
and multi-plant level.5
• Economies of scope–Scope benefits
arise when related activities are
carried together.6
Instances of scope
benefits include production of two
different but related products and
production and distribution by the
same person. Sources of these
efficiencies include common raw
materials; complementary technical
knowledge; and the reduction or
elimination of distribution
channels and sales forces.7
(ii) Allocative efficiency
A market is said to achieve “allocative
efficiency” when market processes lead
society’s resources to be allocated to their
highest valued use among all competing
uses.8
In simple terms, allocative
efficiencies occur when production is
allocated to the highest value buyers. At
such an allocation, price of the product
would be equal to the marginal cost.
There may be situations where because
of a vertical merger on account of
elimination of “double marginalisation”
there will be enhanced allocative
efficiencies. If we take an example of a
vertical merger between the makers of a
compressor used in a refrigerator and the
makers of refrigerator, a lot of packing
material and resources on transportation
would be saved and be available to
society for use elsewhere. This is also a
clear case of enhancement in allocative
efficiencies as a result of a merger.
(iii) Dynamic efficiency
Gains achieved out of innovation are
called as dynamic efficiencies.
Innovations result in better quality, novel
products and better technologies.
Innovations lubricate competition by
accelerating rivalry and stewardship
among competitors. Merger of two small
firms may enable the resultant to invest
more in Research & Development and
innovate. On the other hand, merger
between innovative firms may monopolise
the scarce intellectual properties in the
hands of the resulting entity.
(iv) Transactional efficiency
Mergers may reduce transaction cost
incurred by consumers. Vertical mergers
often results in transactional efficiencies.
Transactional efficiencies also form the
platform for achieving other efficiencies.
It helps in reducing the price raise due to
opportunistic behaviours and holdups.9
For instance, merger between monopoly
wholesaler and monopoly retailer
reduces the price mark-up by the retailer,
which in turn leads to the possibility of
reducing the price of the products sold.
In addition to the above specific
components, there are other categories
of efficiencies that may be found in
literatures that deeply discusses the
economics behind efficiency.10
The
5 ICN Merger Working Group: Analytical Framework Subgroup, “Project on Merger
Guidelines” (2004), Chapter IV at p.17.
6 John Black, “A Dictionary of Economics”, Oxford University Press [2005], at p. 136.
7 Supra 4, at p.18.
8 Supra 3.
9 Supra 3, at p. 59.
10 ICN Merger Working Group: Analytical Framework Subgroup, “Project on Merger
Guidelines” [2004], Chapter IV identifies fixed cost savings, promotional efficiencies,
pecuniary (or) re-distributive efficiencies, marginal cost savings, demand side network
effects and capital cost savings as the other kinds of efficiencies recognised by regulators in
different jurisdictions.
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authors personally find the above
discussed aspects of efficiency sufficient
to understand treatment of legally
recognised efficiencies in mergers.
B. Incorporating Efficiencies in
Merger Analysis
One of the early practices was ignorance
of efficiencies as they are considered
difficult to quantify.11
For instance, early
practices of United States shows a lesser
appreciation bordering on ignorance in
so far as the mergers lessening
competition were prohibited irrespective
of their efficiency achievements.12
However, as a result of definite
realisation that consideration of
efficiencies was gaining wide
acceptance, US courts started
recognising efficiencies and in 1997, the
US merger guidelines were amended to
explicitly incorporate efficiency gains as
a part of the merger review. With
increasing uniformity across the world,
jurisdictions recognise efficiencies under
the law or regulations that govern merger
control. Following are the approaches
followed by selected jurisdictions to
recognise efficiencies in merger analysis:
(i) Efficiency as a part of substantive
assessment test and
(ii) Efficiency as a defence
(iii) Authorisation
While the understandings of efficiencies
are similar across jurisdictions, these
approaches differ from each other with
respect to the stage at which efficiencies
are considered.
(i) Efficiency as a part of substantive
assessment
This is the most common method
followed in recognising efficiencies.
Under this approach, consideration of
efficiencies forms part of the substantive
assessment adopted by the jurisdiction.
“Substantive Lessening of competition”
(SLC) is the assessment criterion adopted
by all the jurisdictions selected for the
purpose of this paper.13
Under SLC, any
merger that actually results or is likely to
result in SLC is blocked.
Efficiency as a part of substantive
assessment criterion requires the
enforcement agency to consider
efficiencies while determining the
existence/non-existence of the
substantial criterion. Under the
approach, a combination resulting in
lessening of competition at the same time
generating significant efficiencies may be
permitted on the ground that the
lessening of competition is not
substantial. Among the jurisdictions
11 Ann-Britt Everett and Thomas W. Ross, “The Treatment of Efficiencies in Merger Review:
An International Comparison” [2002], Canadian Competition bureau, at p.15 (available at
http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/en/01263e.html accessed on
12/01/2009).
12 In FTC v. Procter & Gamble Co., 386 U.S. 568 (1967), the U.S. Supreme Court held that
“Possible economics cannot be used as a defence to illegality. Congress was aware that some
mergers which lessen competition may also result in economics, but it struck the balance in
favour of protecting competition”. Similarly, earlier in Brown Shoe Co., Inc. v. United States,
370 U.S. 294 (1962), the U.S. Supreme Court held that - “we cannot fail to recognise Congress”
desire to promote competition through the protection of viable, small, locally owned businesses.
Congress appreciated that occasional higher costs and prices might result from the
maintenance of fragmented industries and markets. It resolved these competing considerations
in favour of decentralisation. We must give effect to that decision”. These decisions of the
U.S. Courts show the conscious disregard to economies in early times.
13 While Substantial Lessening of Competition (SLC) is the phrase used in US Merger Guidelines,
the nomenclature of the standard in Australia and Canada are slightly different - (i) Australia
– “effect, or be likely to have the effect, of substantially lessening competition in a market”
(Section 50 of Trade Practice Act, 1974) and (ii) Canada – “prevents or lessens, or is likely to
prevent or lessen, competition substantially” (Section 92, Competition Act, 1985).
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selected, United States and European
Union adopt this approach.
(ii) Efficiency as a defence
Under the approach, efficiencies have no
role in determining the substantive
criterion of assessment. However, they
act as a justification for approving a
combination. It is purely a cost-benefit
analysis between the positives and
negatives of the combination. If the
efficiencies generated out-weigh the anti-
competitive effects anticipated, the
combination is approved.
The classic example for this approach is
the Canadian practice. While Section 93
of the relevant legislation14
enumerates the
list of factors that are to be considered for
determining the substantive assessment
criterion, Section 96 separately deals with
efficiency considerations. Relevant
portion of the Section reads that:
The Tribunal shall not make an order
under Section 92, if it finds that the
merger or proposed merger in respect
of which the application is made has
brought about or is likely to bring
about gains in efficiency that will be
greater than, and will offset, the effects
of any prevention or lessening of
competition that will result or is likely
to result from the merger or proposed
merger and that the gains in efficiency
would not likely be attained if the
order were made.
It is the obligation of the tribunal not to
block a merger if the same generates
efficiencies that offsets the anti-
competitive effects of the merger. Thus,
in every merger reported, the tribunal has
to weigh efficiencies with the potential
anti-competitive effects. Thus, under
defensive approach, efficiency
considerations form part of the
substantive analysis but is that is
separate from the determination of anti-
competitive effects.
In the earlier approach, presence of
efficiencies leads to a conclusion that the
proposed merger is pro-competitive or
competition neutral but in the defensive
approach, efficiencies acts as a
justification for approving a merger.
(iii) Authorisation
Authorisation is similar but not identical
to efficiency defence. Unlike the defence,
authorisation is a separate process where
the particular merger is given immunity
from the operation of the provisions
prohibiting anticompetitive merger.
Immunity is granted on the grounds of
efficiencies. In some, the jurisdictions like
Germany and United Kingdom,15
this
power is vested with the concerned
ministries. Among the jurisdictions
selected, Australia adopts authorisation
process.16
Authorisation on the ground of
public benefit allows the Australian
tribunal to formally consider efficiencies.
14 Canadian Competition Act, 1985
15 Section 73 of the Fair Trading Act, 1973 empowers the Secretary of State for Trade and
Industry to approve mergers in the exceptional cases of public interest.
16 Section 88 (9) of the Trade Practices Act, 1974 provides for authorisation. The provision
reads as follows:
(9) Subject to this Part, the Commission may, upon application by or on behalf of a person:
(a) grant an authorisation to the person to acquire shares in the capital of a body corporate
or to acquire assets of a person; or
(b) grant an authorisation to the person to acquire a controlling interest in a body corporate
within the meaning of Section 50A; and, while such and authorisation remains in force:
(c) in the case of an authorisation under paragraph (a) - Section 50 does not prevent the
person from acquiring shares or assets in accordance with the authorisation; or
(d) in the case of an authorisation under paragraph (b) - Section 50A does not, to the extent
specified in the authorisation, apply in relation to the acquisition of that controlling
interest.
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C. Merger Specificity
While efficiencies are considered as a
justification for approving mergers, firms
should not use efficiencies as a gateway
for consummating anticompetitive
mergers. This also raises some significant
policy issues as to what efficiencies and
when they are to be considered.
Significant majority of the jurisdictions
mandate merger specificity to recognise
efficiencies. Specificity implies that the
alleged efficiencies cannot be achieved in
any manner otherwise than by the merger.
Specificity factor determines that
relevance of efficiencies alleged.
Precisely, the issues are two-fold. Firstly,
whether the efficiencies alleged are the
direct consequence of the merger.
Secondly, is there a possibility of the
alleged efficiencies being achieved in any
manner otherwise than by the merger? If
the alleged efficiencies are unique to the
merger, which could not be achieved in
any other means, then the efficiencies are
more likely to be appreciated.17
On the
other hand, if the alleged efficiencies are
capable of being achieved otherwise than
by the merger then the consideration of
efficiencies purely depends on the
likelihood of the other means available
to the parties to achieve the same.
However, specificity proposition does
not make competition authorities to
insist and rely upon all the hypothetical
probabilities rather they look for those
practical probabilities. For instance, in
US efficiencies “that are practical in the
business situation faced by the merging
firms will be considered in making this
determination; the Agency will not insist
upon a less restrictive alternative that is
merely theoretical.”18
Thus, it is not the
mere existence of alternative but an
alternative that is practical and less anti-
competitive than the merger.
D. Pass-on Requirements
Pass-on mandate that the efficiencies
obtained should be to the benefit of
consumers either in terms of lower price
or better quality of products/service.19
Efficiencies passed on to consumers,
even if realised by dominant firms, could
have significant positive effects on the
economy as a whole.20
Consumer Pass-
on requirements are highly integrated to
the welfare standard recognised in the
regulatory structure. Jurisdictions which
follow consumer surplus and/or price
standard are most likely to insist that the
benefits of efficiencies should pass-on to
consumers. We would be in a better
position to understand pass-on factor
after the forthcoming deliberations on
welfare standards.
E. Effect of Merger on Price and
Allocation Patterns
Theeffectofamerger,increasingthemarket
concentration, on the price and resource
allocation may be well understood from
the following type of diagram explanation.
This type of explanation was popularised
by Oliver Williamson.21
Assume that two firms, each with
significant market share, operate in a
concentrated market. The said firms
merge with each other (horizontal
merger). The diagram below presents the
impact of the merger on the price and
allocation pattern in the market.
17 Supra 2, at p. 64.
18 Supra 8, at Section 4.
19 Section 79-84, European Union, Guidelines on the Horizontal Mergers under the Council
Regulation on the Control of Concentration between Undertakings, OJ C 31/5 dated 5th
February, 2004.
20 OECD, “Substantive Criteria Used for the Assessment of Mergers” [2003], DAFFE/
COMP(2003)5, at p.331.
21 “Economies as an Antitrust Defense: The Welfare Tradeoffs”, The American Economic Review,
Vol. 58, No. 1 (March 1968), pp 18-36.
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The merger further increases the market
concentration and places the resultant
entity in a dominant position. As a result
of dominance, the resultant entity
achieves pricing power and scale
benefits. While the pricing power leads
to increased price,22
scale benefits reduce
the average cost of production. The
increased price and decreased cost are
given by P2
and AC2
respectively. As a
result of increased price, the quantity
demanded gets reduced from Q1
to Q2.
Price
A
P2
P1
C
AC2
B
AC1
E
M
D
0 Q1Q2 Quantity
Figure: Williamson’s model on effects of merger
(Assumed: Market is a concentrated market and the Merger (Combination) further
increases concentration which in turn leads to higher prices)
AC1
= Pre-merger Average cost.
AC2
= Post-merger Average cost.
D = Demand.
P1
= Price of the Product before merger.
P2
= Price of the Product after merger.
Q1
= Quantity demanded before merger.
Q2
= Quantity demanded after merger.
A+B+C = Pre-merger Consumer surplus.
B = Surplus gained by firms from consumers (wealth or welfare transfer).
C = Dead weight loss. This is the consumer surplus lost in view of the
merger.
E = Efficiency gains.
In the above figure–“D” represents customers’ demand for the product. The average cost
of production and price of the product before merger are given by P1
and AC1
, respectively.
Q1
represents the quantity demanded when the price were at P1
(i.e. before merger). In the
pre-merger market scenario it may be noticed that price is equal to cost (P1
= AC1
).
22 For better understanding on how mergers lead to increased price one may refer to Bretrand
and Cournot theories of oligopoly.
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From the above, it is clear that the merger
had lead to increase in price, reduction in
demand and reduction in cost of
production. These consequences put
together have impact on competition,
consumers, stakeholders and society as
a whole. Quantification of the differences
in price, demand and cost in view of the
merger and their impact on the different
sectors of the society forms the basis of
welfare trade-offs.
Consumer and producer surplus are the
predominant measures used by
economists to assess the welfare
consequences of a merger. Consumer
surplus (CS) refers to the difference
between what consumers would have
been willing to pay for a particular
product and what they actually pay.
Producer surplus (PS) refers to the
difference between the revenue collected
by the firm and the cost they incur for
producing the product. In the figure,
A+B+C represent the consumer surplus
before the merger, which falls down to A
after merger due to the raise in price.
The merger increases the price (P2
) and
reduces the cost incurred (AC2
) thereby,
enables the producer to acquire portion
B from consumers to his benefit. This
transfer is commonly called as wealth or
welfare transfer. The scale benefit and
consequential reduction in cost results
in efficiency E - represented by the
difference between cost before and after
the merger (AC1
- AC2
). Thus, as a result
of merger, producer gains surplus (PS)
represented by B+E. On the other hand,
increased price reduces the demand for
the product from Q1
to Q2
. Here the
reduction in consumption and output
(production) is the loss to whole society
and is called dead-weight loss (C).
F. Trade-off Welfare Standards
From the above diagrammatic
presentation, it is clear that mergers may
create and/or transfer wealth. While
wealth creation (efficiencies) is the
positive aspect of a merger, consequences
of wealth transfers may be negative.
Enforcement agencies assess the nature
of wealth transfers to approve mergers
on the basis of efficiencies. In particular,
those mergers that transfer wealth from
consumers to producers need cautious
scrutiny.
Recognition of efficiencies (wealth
created) depends on the nature of
regulatory stance followed in the
particular jurisdiction i.e. the welfare
standard adopted. In simple terms, trade-
off between efficiencies and anti-
competitiveness is based on the welfare
standard incorporated in the regulatory
regime.
Existing literature and the prevailing
practice presents the following types of
standards that are relevant for the
purpose of merger analysis. These
standards could be better understood if
the same is appreciated in view of
Williamson’s model.
(i) Price Standard
Where a merger decreases the price of
the product/service, the merger would
be approved irrespective of its ill effects.
This standard requires the benefits of
efficiencies to be passed-on to consumer
in terms of reduced price. Adoption of
price standard is considered as an
obsolete practice as the magnitude of
efficiencies and consumer benefits other
than price reduction are ignored.
(ii) Consumer-Surplus Standard
This is similar but not identical to price
standard. Here, the requirement of pass-
on to consumers is not limited to reduced
price but includes other benefits to
consumers such as production of novel
products, better quality and expansion
of existing facilities. Though consumer
surplus appears similar to price
standard they are much broader than the
latter. For instance, a merger reducing
price as well as the quality of the
Economies (Efficiencies) – An Essential Consideration in Merger Analysis
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COMPETITION LAW REPORTS (JAN. - FEB. 2011)
product/service may pass price standard
but not the consumer-surplus standard.
(iii) Total-Surplus Standard
Recognition of efficiencies mandates the
quantum of post-merger efficiencies to be
greater than the deadweight loss to the
society i.e. in Fig. No.1, E should be
greater than C. Under this approach, the
overall loss and gain of the society would
be relevant irrespective of the wealth
transferred from consumers to producer.
Among the various standards, this
approach gives the possibility of giving
credence to producer surplus over the
consumer surplus. It recognises
efficiencies gains irrespective of
consumers’ disadvantage.
(iv) Hills-Down standard
The obiter dictum of the Canadian
Competition Tribunal in Hills Down case23
lead to this approach. Under hills-down
standard, efficiencies gained shall be in
excess to the loss suffered by consumers,
i.e. in the figure, and E shall be greater than
B+C. The approach treats the wealth
transferred from consumer to producer as
a negative cost of the merger and tries to
balance consumer and producer surplus
equally. This approach ranges somewhere
between consumer-surplus and total-
surplus standard. However, this approach
is not in practice even in Canada.
(v) Weighed-Surplus Standard
This is the most flexible approach that
enables the enforcement agency to use
its discretion in recognising any factor
that generates welfare. Under the
approach the various effects of merger
are added together as in total-surplus
standard but in each case it is multiplied
by some sort of social weight allocated
in view its importance.
Reference could be drawn to the decision
of Canadian Competition Tribunal in
Superior Propane case24
. In the said case,
the Canadian regulator dealt with the
merger between Canada’s two largest
propane distributors. The merger was
approved despite the anticipated price
increase of 8 per cent (around $43
million), dead-weight loss of $3 million
and resultant entity achieving 70 per cent
of the market share. Canadian
Commission predicted that the merger
would result in cost saving around $29.2
million and approved the merger on the
basis of net efficiency standard. The
Canadian regulator applied weighed
surplus standard in concluding that
efficiencies of the Merger offsets the
anticompetitive effects of the merger25
.
23 Canada (Director of Investigation and Research) v. Hillsdown Holdings (Canada) Ltd. (1992), 41
C.P.R. (3d) 289 (Comp. Trib.). Relevant portion of the decision reads as follows (at p. 95
and 96 of the order):
Certainly, one interpretation which is open on the basis of the wording of Sub-section 96(1)
is to weigh any alleged efficiency gains against the degree of likelihood that detrimental
effects (both wealth transfers and allocative inefficiency) will arise from the substantial
lessening of competition.
24 Canada (Commissioner of Competition) v. Superior Propane Inc., CT-98/02, 2000 Comp. Trib.
15 (30th
August, 2000).
25 Antitrust experts say that Canadian regulator failed to appreciate the wealth transferred
from consumers to merging entity as the cost saving (around $29 million) is much lesser
than the anticipated price raise and dead-weight loss (around $ 46 million).
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F. Comparative Chart on Role Of Efficiencies In Merger Analysis
Comparative Table - Role of efficiencies in Merger Analysis
Jurisdiction Australia Canada U.S.
Mode of Statute -
Recognition Guidelines
Method of Whether part of - -
Treatment substantive test
Defence - -
Authorisation - -
Types of Productive
efficiencies Allocative
recognised Dynamic -
Welfare Price - - -
Standard Consumer Surplus -
adopted Total Surplus - - -
Authorisation
Hills down - - -
Weighed Surplus - -
Merger - specificity
Pass-on requirements -
Table : Table prepared on the basis of Merger Control Legislation/Guidelines
of respective jurisdiction and reports of ICN and OECD.
G. Merger Efficiencies and Indian
Competition Act, 2002 (as amended)
Section 5 and 6 of the Competition Act,
2002 (Act) relate to regulation of
combinations.26
Section 5 explains the
types of acquisitions, mergers and
amalgamations that are “combinations”
for the purpose of the Act. Section 6
prohibits combinations which causes or
is likely to cause an appreciable adverse
effect on competition27
(AAEC). Any
person who proposes to enter into a
combination shall give notice to the
Competition Commission of India (CCI)
in the form as may be specified and the
fee which may be determined by
regulations.28
Such proposals reported to
CCI would not take into effect until either
the expiry of 210 days from the day on
which notice was given or the
Commission has passed orders on
merger29
CCI, while determining whether the
proposed combination causes or likely
to cause AAEC, is mandated to have due
regard to all or any of the factors
mentioned in Section 20(4) of the Act. A
holistic reading of these factors shows
26 The provisions relating to combinations including Section 5 and 6 are not yet enforced.
However, these provisions are expected to be enforced anytime nearby.
27 Section 6(1).
28 Section 6(2).
29 Section 6(2A) read with Section 31(1).
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that CCI would consider both anti-
competitive and welfare consequences of
the proposed combination. The last five
factors mentioned in Section 20(4) of the
Act indicate the possibility of CCI
considering the welfare consequences in
determining whether the combination
has or likely to have AAEC in the
relevant market. The said five factors are
reproduced below for ready reference:
(j) nature and extent of vertical
integration in the market;
(k) possibility of a failing business;
(l) nature and extent of innovation;
(m) relative advantage, by way of the
contribution to the economic
development, by any combination
having or likely to have
appreciable adverse effect on
competition;
(n) whether the benefits of the
combination outweigh the adverse
impact of the combination, if any.
The above factors indicate that they are
very wide in their sweep. The very first
factor in Section 20(4)(j) of the Act is
“nature and extent of vertical integration
in the market”. Vertical integration, in
the context of a merger, can have both-
positive and negative consequences. If a
vertical integration has a possibility of
reducing competition in the downstream
market by creating monopoly or
enhanced market power over the source
of raw material or other vital inputs, in
that event, the effects of vertical
integration are negative. On the other
hand, a vertical integration can be pro-
competitive if it results in elimination of
either “double marginalisation” or
expenditure on similar or identical
activities.
As regards the factor in Section 20(4) (l)
of the Act “nature and extent of
innovation” is concerned, this can also
be seen both ways. Sometimes a merger
can raise the possibilities of future
innovation on account of the possibilities
of economics of a scale and scope and
incentive to invest in research and
development activities. However, this
can also be a negative consideration if
one of the entities to a merger is having
some IPRs which may not be utilised by
the other entity to the merger for fear of
competition with its own existing line of
products. In some cases, the IPRs may be
brought into market after a gap of some
time period by the acquiring entity with
not a sole eye on consumer welfare. In
such eventualities, the effect of the
combination would be anti-competitive.
Further, the Indian competition law also
takes into account relative advantage by
way of contribution to the economic
development, by any combination
having or likely to have appreciable
adverse effect on competition. This is a
very wide latitude given to the
competition agency. By its very wording,
it appears, the CCI has been given
authority to clear any combination
having or likely to have an appreciable
adverse effect on competition if, in the
view of CCI, it has relative advantage by
way of contribution to the economic
development. It is very sweeping
authority indeed.
If this last factor of relative advantage to
the economic development had left any
doubt, the next factor i.e. factor given in
Section 20(4) (n) is still more general. It
gives CCI a complete freedom to clear
combination if in its view the benefits of
the combination outweigh the adverse
effect of the combination, if any.
Seen in this perspective, the last five
factors given in Section 20(4) of the Act
indicate that efficiency considerations in
Indian law are extremely wide. Firstly,
the efficiency considerations are very
much a part of the statute. Thus,
competition law in India recognises
efficiencies ab initio as a part of the
substantive assessment criterion. Thus,
Indian merger control regime
incorporates efficiencies as a part of its
substantive assessment in case of
mergers.
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