This paper will discuss the merger and acquisition control policies of the European Community as they have evolved since the 1960s. The main focus of this discussion will be upon the provisions of the Merger Regulation, which was enacted in 1989. Somewhat lesser attention will be focused upon Articles 85 and 86 of the EC Treaty. The paper will also look at the relationship between these provisions and the competition policies of the European Community. In doing so, the European competition and industrial policies will be compared to those of the United States.
During the course of this paper, it should become apparent that the policies of the European Community concerning integration and the single market have taken precedence over considerations of economic efficiency. According to the standard statements concerning most competition law provisions, economic efficiency is the main goal of competition policy. Thus, there is supposedly no conflict between competition policy and economic efficiency. In practice, however, economic efficiency often takes a back seat to the supposed interests of fair competition. As will be seen, the European Community competition provisions follow this pattern. The decisions of the European Commission and the Merger Task Force have tended to emphasize interests of fair competition, even in situations where such interests conflict with economic efficiency.
During the 1980s, merger activity reached a crescendo in Europe as well as in North America and Asia. These mergers were motivated by two important factors. First, the perception existed that the share value of companies was often less than the asset value and that such companies were thus a "good buy." Second, many companies wanted to expand and strengthen their market positions. The movement towards completing the internal European market provided an incentive for companies wishing to trade in Europe to establish a stronger presence...