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Vertical Integration and Competition Policy

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Abstract

The European Commission has decided to implement a simplified procedure in the context of vertical integration. If the combined market shares of the merging firms is higher than 25% the Commission will investigate the merger thoroughly. Otherwise, the merger is considered harmless. The purpose of this study is to examine the welfare aspects of vertical integration in a simple model and investigate the accuracy of the proposed rule of thumb. Mergers turn out to be harmless from a social point of view when the upstream market is relatively less concentrated compared to the downstream market.

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Authors and Affiliations

  1. Department of Economics, Stockholm University, S-106 91, Stockholm, Sweden

    Jonas Häckner

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  1. Jonas Häckner
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Häckner, J. Vertical Integration and Competition Policy. Journal of Regulatory Economics 24, 213–222 (2003). https://doi.org/10.1023/A:1024790112185

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  • DOI: https://doi.org/10.1023/A:1024790112185

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