Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Horizontal Effects

  • Philipp SchumacherEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_235

Definition

Horizontal effects are the anti-competitive consequences of mergers where the competitive constraints existing before the transaction between the merging parties are eliminated (unilateral or non-coordinated effects), and/or the post-merger market structure reduces the intensity of competition between the remaining competitors (pro-collusive or coordinated effects).

Horizontal Effects

Non-coordinated effects refer to a situation where, post-merger, the merging parties are able to profitably increase prices, reduce output, or otherwise act less competitively than before, while their rivals do notalter their strategies. Non-coordinated effects arise from the independent profit maximization of the individual firms and are due to the internalization of competition between the merging firms. Before the merger, a unilateral price increase by one party would have led to sales lost to competing firms, including the other merging party. As a result of the merger, the parties can...

This is a preview of subscription content, log in to check access.

References

  1. European Commission (2004) Guidelines on the assessment of horizontal mergers under the council regulation on the control of concentrations between undertakings. OJ C31/5. Available from: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52004XC0205(02)&from=EN. Accessed 10 June 2017
  2. U.S. Department of Justice (2010) Horizontal merger guidelines (Issued August 19, 2010). Available from: http://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf. Accessed 10 June 2017

Further Reading

  1. Bishop S, Walker M (2009) The economics of EC competition law: concepts, application and measurement, 3rd edn. Sweet and Maxwell, LondonGoogle Scholar
  2. Hildebrand D (2009) The role of economic analysis in the EC competition rules, 3rd edn. Kluwer Law International, New YorkGoogle Scholar
  3. Kirschner US (2007) European competition policy – assessment problems in merger control. VDM Verlag Dr. Müller, SaarbrückenGoogle Scholar
  4. Kühn KU (2008) The coordinated effects of mergers. In: Buccirossi P (ed) Handbook of antitrust economics. The MIT Press, Cambridge, MA, pp 105–144Google Scholar
  5. Motta M (2004) Competition policy – theory and practice. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  6. Schwalbe U, Zimmer D (2009) Law and economics in European merger control. Oxford University Press, Oxford/New YorkGoogle Scholar
  7. Werden G, Froeb LM (2008) Unilateral competitive effects of horizontal mergers. In: Buccirossi P (ed) The handbook of antitrust. The MIT Press, Cambridge, MA, pp 43–104Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Wildau Institute of TechnologyTechnical University of Applied ScienceWildauGermany