Efficiencies in horizontal mergers: The white whale of EU merger control?

We discuss the (limited) role played by efficiency considerations in the assessment of horizontal mergers in Europe and we set out a number of recommendations to try to increase that role going forward. We first explain that the theoretical and empirical literature clearly supports the consideration that mergers can give rise to substantial efficiencies, but not that they generally will. This calls for an open-minded approach whereby efficiencies are assessed on the merits on a case-by-case basis. We then show that unfortunately, this is not what happens in practice - in Europe, efficiencies play a very marginal role in merger assessment. We explain that although the test used by the European Commission to assess efficiencies is broadly sound, it is applied too strictly. We argue that an alignment of standards of proof between efficiencies and anti-competitive effects would invite more, and better, efficiency submissions, and allow for a better-informed merger control.