Optimization of the Danish Rules on Merger Control: Focusing on the Threshold Values and the "Maverick" Concept

Pernille Kolin & Elisabeth Simonsen

Student thesis: Master thesis

Abstract

The purpose of this master thesis “Optimization of the Danish Rules on merger control – Focusing on the threshold values and the “maverick” concept” is to conduct an examination of the Danish rules on merger control in order to investigate the optimality of these rules. The thesis examines the functioning of two primary “instruments” consisting of the threshold values and the “maverick” concept that are used in the merger control regime. This investigation leads to a propoundment of potential welfare-enhancing proposals. The thesis is divided into three main parts. The first part (chapter 3) contains the legal investigation of the rules. Chapter 3 is opened with an examination of the Danish rules on merger control particularly focusing on when a merger is within the scope of the regulation and under what conditions a merger will be cleared. This examination is followed by an analysis of potential problems regarding the usage of the “maverick”-concept and the current threshold values. This analysis finds that the “maverick” concept is not well defined and lacks consistency in its use and that the current thresholds do not catch all potentially harmful mergers. The second part (chapter 4) contains the economic investigation of the rules. Chapter 4 is opened with some economic considerations regarding the theories and models applied. The chapter examines the effect on welfare in society of “maverick”-firms and mergers involving these firms. Furthermore, the chapter examines the effect on welfare in society of an alternative threshold based on the transaction value. The investigation finds that “maverick”-firms are welfare-enhancing and that mergers with these firms thus should be prevented. Further, the investigation finds that the current thresholds do not catch all potentially harmful mergers and that an alternative threshold based on the transaction value can be welfare-enhancing. The third part (chapter 5) combines the findings from the previous chapters in an interdisciplinary analysis resulting in a propoundment of potential welfare-enhancing proposals regarding the “maverick” concept and the threshold values. The thesis ends with chapter 6 in which the main findings and conclusion of the thesis is presented. The thesis concludes that the functioning of current rules is not optimal thus improvements are required.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2019
Number of pages132
SupervisorsKathrine Søs Jacobsen Cesko