RBB publications

Brief 65: Fuel for thought? Developments in CMA local merger assessment 25.08.21

The CMA recently cleared the acquisition of UK grocery chain Asda by fuel retailer Euro Garages. In its assessment of local overlaps between the parties the CMA adopted a mechanical decision rule methodology, suggesting a shift away from the traditional two stage filtering approach.

In this Brief we consider the CMA’s evolving approach to local market assessment in phase I merger review, and argue that the emerging preference for mechanical decision rules unnecessarily reduces the quality of merger review by disregarding relevant and available information.

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Brief 64: Surviving the broad axe: The UK class action regime is alive and kicking, but what can the Supreme Court’s judgment in Merricks/Mastercard tell us about the role of economics in class certifications going forward? 28.04.21

On the 11th December 2020, the UK Supreme Court (“SC”) handed down its judgment in the case between Walter Hugh Merricks, CBE (“Merricks”) and Mastercard Incorporated (“Mastercard”).1 The judgment concerns Merricks’ Collective Proceedings Order (“CPO”) application to pursue a class action for follow-on damages against Mastercard for £14 billion (after interest), on behalf of 46.2 million people.2 The application was originally rejected by the UK Competition Appeal Tribunal (“CAT”) in 2017, before the CAT’s ruling was overturned on appeal by the Court of Appeal (“CoA”) in 2019.3 Mastercard then appealed the CoA’s decision before the SC, but was unsuccessful, with the SC sending the case back to the CAT for re-consideration.

This brief expands on this and other important economic considerations that arise from the SC judgment, including how failing to interrogate a claimant’s proposed damages estimation methodology in sufficient detail is liable to cause serious issues at trial.

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RBB Brief 63: Digging in the Scrap Heap! A new theory of adverse buyer power 15.03.21

The Aurubis / Metallo merger was approved unconditionally by the European Commission after an in-depth investigation, which included the sending of a Statement of Objections to the Parties and an oral hearing. The Commission was concerned that this merger, by combining the two largest purchasers of copper scrap in the EEA, would give rise to significant buyer power. Whilst increased buyer power usually benefits consumers, as lower input costs often translate into reduced product prices, in some cases imposing lower prices on suppliers could result in a significant impediment of effective competition (“SIEC”).

In this Brief, we offer an economic perspective on the Commission’s approach to investigate competition concerns stemming from increased buyer power that results
from horizontal mergers, with particular focus on a new theory of harm.

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How Merger Control Rolls: A Response to Caffarra, Crawford and Valletti 01.02.21

In a recent paper, How tech rolls: Potential competition and ‘reverse’ killer acquisitions, Cristina Caffarra, Gregory Crawford and Tommaso Valletti make the case that merger control should introduce presumptions of anticompetitive harm when large tech companies seek to “buy” rather than “build”. Simon Bishop and Stephen Lewis evaluate these arguments. They conclude that the arguments of Caffarra, Crawford and Valletti are weak and unsubstantiated. We should therefore be extremely wary of deviating from the established practice of detailed case-by-case assessments by introducing presumptions into merger control.

The full document can be downloaded here

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Consultation on the CMA Draft Merger Guidelines 26.01.21

The CMA has launched a welcome public consultation regarding proposed updates to its Merger Guidelines. As part of this consultation, RBB Economics has submitted a response that sets out a number of observations on the CMA’s draft which (if followed) we believe would facilitate a more transparent and balanced approach to the assessment of mergers.

The full document can be downloaded here

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