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Title:Deal or no deal? Consensual arrangements as an instrument of European competition policy PDF Logo
Authors:Budzinski, Oliver
Kuchinke, Björn A.
Issue Date:2012
Series/Report no.:Ilmenau Economics Discussion Paper, Ilmenau University of Technology, Institute of Economics 76
Abstract:Roughly during the last decade, European Competition Policy has undergone a series of fundamental changes. All four areas - cartel policy, merger policy, abuse control, and state aid control - have been subject to a modernization process, which led to a focus on analysing the effects of individual cases and established a tendency towards deciding each case on its individual merits. These changes can be understood as a move away from rule-based competition policy towards a case-by-case approach. The case-by-case approach especially includes consensual arrangements, so-called 'deals' between the competition authority and business companies. Therefore, this paper will discuss the pros and cons of 'deals' as an instrument of (European) competition policy. The paper's central focus lies on the economic analysis of the advantages and disadvantages of using consensual arrangements as a relevant instrument of European competition policy. With respect to European competition policy, we conclude that we need to issue a note of caution. From an economic perspective, an expansion of consensual elements necessarily walks hand in hand with a continual weakening of the protection of competition. Consumer welfare will not benefit from expanding the role and importance of consensual arrangements as a means of European competition policy.
Subjects:European competition policy
consensual arrangements
antitrust settlements
merger control
deals
political economics
JEL:L40
K21
D02
P16
Document Type:Working Paper
Appears in Collections:Ilmenau Economics Discussion Papers, Technische Universität Ilmenau

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