Incomplete Contracting, Commission Discretion and the Origins of EU Merger Control
Department
Political Science and International Affairs
Document Type
Article
Publication Date
6-2009
Abstract
Council Regulation 4064/89 on the Control of Concentration between Undertakings - more commonly known as the Merger Regulation - was a watershed development in the evolution of the EU's competition policy regime. In this article we seek to cast new analytical light on what, in many respects, is an established narrative. To do this we draw on insights from the new institutional economics (NIE). Specifically, we draw on the complementary concepts of incomplete contracting and delegation. We demonstrate how the Commission utilized the discretion attendant to its delegated authority to interpret and apply the indeterminate language of treaty competition articles so as to alter the economic, political and legal environment as it pertained to merger activity. It did so to such an extent that Member States, long resistant to Commission proposals for a merger control regulation, came to regard legislative action as preferable to the uncertainty represented by the evolving status quo.
Journal Title
Journal of Common Market Studies
Journal ISSN
1468-5965
Volume
47
Issue
3
First Page
483
Last Page
506
Digital Object Identifier (DOI)
10.1111/j.1468-5965.2009.01813.x