A Need For a Substantial Tightening of Merger Control? Comment on Tichy

Abstract

This paper responds to Tichy's analysis of M&A activity and in particular to the lessons Tichy draws from his review. The paper focuses on a number of policy conclusions reached by Tichy, which I believe are in sharp contrast with the current “consensus” on the economic analysis of potentially problematic mergers. In particular, I explain why I believe that a number of changes to merger control activity suggested in the paper (such as a general ban on particular types of mergers including mergers reducing the number of firms below five, vertical mergers in network industries, and acquisition of firms producing substitutes in the field of the former public utilities) would actually be detrimental to economic efficiency by generating a system that would not have the necessary flexibility to precisely assess on a case-by-case basis whether particular mergers might have an anti-competitive effect.