What is the SLC test?

The test depends on whether the conduct, practice, provision of a contract, arrangement or understanding (CAU) or transaction has the purpose, effect or likely effect of substantially lessening competition (SLC) in a market.

What are unilateral effects?

1.1 Unilateral effects arise when the merged group is able profitably to reduce value for money,2 choice or innovation3 through its own acts without the need for a co-operative response from competitors.

What is substantial lessening of competition?

Substantial lessening of competition Conduct by a business with market power is only a contravention of the Competition and Consumer Act 2010 (CCA) if it has the purpose, effect or likely effect of substantially lessening competition.

What is the difference between unilateral and coordinated effects?

Unilateral effects arise from an individual incentive for the merged entity to raise prices post-merger whereas coordi- nated effects arise if the merger results in an increased likelihood of tacit col- lusion (see Ivaldi et al.

What is a suspensory regime?

Mandatory and voluntary regimes Mandatory regimes normally also contain a so-called “suspensory clause”, which implies that the parties to a transaction are indefinitely prevented from closing the deal until they have received merger clearance.

What is a Phase 2 CMA reference?

The CMA is under a duty to refer a relevant merger situation for a Phase 2 investigation where the CMA believes that it is, or may be, the case that: a relevant merger situation has been created, or arrangements are in progress which if carried into effect will result in the creation of a relevant merger situation; and.

How long does a CMA investigation take?

The CMA has a statutory period of 24 weeks to conduct its investigation and publish a report. This period can be extended by up to eight weeks at the CMA’s discretion. The investigation includes both: Written submissions from the parties to the transaction and interested third parties.

What are coordinated effects in competition law?

Coordinated effects arise where, under certain market conditions (e.g., market transparency, product homogeneity etc.), the merger increases the probability that, post merger, merging parties and their competitors will successfully be able to coordinate their behaviour in an anti-competitive way, for example, by …

What is tacit collusion in economics?

Tacit collusion (or price leadership) happen when other businesses usually accept price changes established by a dominant firm and which other firms then follow.

What is a diagonal merger?

Diagonal merger combines the assets of an input supplier and a downstream rival of the. input demander that does not use the input. Diagonal mergers are likely to be overlooked by federal. antitrust authorities as they are neither vertical nor horizontal mergers.

How long is a CMA Phase 2?

The CMA has 24 weeks, beginning with the date of the reference, to undertake its Phase 2 analysis and to prepare and publish its final report and decision (including with regard to remedies).

How long is CMA phase1?

2.6 The CMA has a statutory deadline of 40 working days in which to complete the initial stage of its merger review process (Phase 1).