DOES MERGER POLICY CONVERGE AFTER THE 2004 EUROPEAN UNION REFORM?

The European Union (EU) formally changed its merger policy in 2004, moving from a dominance standard to one based on a significant impediment of effective competition, which appears more closely aligned with the U.S. substantial lessening of competition standard. We use data from both before and after this reform to explore whether EU policy has converged toward the U.S. standard. We start by identifying changes in the EU regime and detect a softer EU policy for unilateral effects. We model the outcomes of EU and U.S. investigations with logit models and use their predictions in decompositions and other exercises to show policy convergence for unilateral effects cases.