De-Merger Regimes in Europe - Are National Deconcentration Powers an Appropriate Tool for Enhancing Competition in the EU?

Bigness as such is not an offence in the EU. Nonetheless, in several EU- and Non-EU-jurisdictions there exist powers to order the breaking up of large firms if this is deemed necessary to remedy adverse effects on competition even if they were not created by an unlawful merger or by abusive behaviour of a dominant firm. This raises the question whether such national deconcentration laws are actually an appropriate antitrust tool. The effectiveness of such provisions is highly questionable. Potential social benefits must be balanced with its expected social costs. Market design through de-merger orders might seem a compelling idea but runs the risk of eliminating efficiencies and deterring growth and innovation. Above that, US experience tells us that deconcentration proceedings are cumbersome and protracted. Moreover, it is far from clear whether such “de-merger” laws are in compliance with EU primary law. National powers to deconcentrate large firms undermine the Commission's jurisdiction under the European Merger Regulation and contravene the European competition law order as implemented by the EU. In light of the foregoing, the German lawmaker has finally rejected in 2011 the idea to create such a deconcentration regime. The present article analyses these legal end economic issues and provides an overview on several national de-merger regimes within and outside of the EU