Public Interest in Merger Control: The Lay of the Land

• Author: Ruzica Ciric,Jenn Mellott
• DOI: 10.1177/0003603X20912892
• Date: 01 June 2020
• Published date: 01 June 2020

Article
The Antitrust Bulletin
2020, Vol. 65(2) 208-226
Public Interest in Merger
ª The Author(s) 2020
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Control: The Lay of the Land
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DOI: 10.1177/0003603X20912892
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Jenn Mellott* and Ruzica Ciric*
Abstract
In recent years, regulators and politicians have raised questions about whether merger control is “fit
for purpose” in the modern economy, and in particular about whether the consumer welfare standard
remains the appropriate lens through which to assess transactions, or whether merger control should
consider the potential impact of a transaction on broader public interest (PI) objectives, such as
employment, the environment, data privacy, national security, or industrial or trade policy. Many
merger control regimes globally already include a public interest component, and in thinking about
whether it would be reasonable or appropriate to add or strengthen the PI component of a merger
control regime, it may be helpful to look at regimes that already include a PI component to consider
the ways in which this may be structured and whether these standards are likely to be successful in
achieving PI aims. This piece surveys the existing merger control regimes with a PI component to
identify lessons that may be useful for jurisdictions considering whether and how to expand a merger
control regime to include PI.
Keywords
public interest in merger control, public interest in antitrust, public welfare standard in antitrust
I. Introduction
In recent decades, merger control regulators globally have coalesced around the consumer welfare
standard. Assessment of wider public interest (PI) concerns has been marginalized: eliminated com-
pletely from merger review in many jurisdictions or limited to specific sectors or narrow circumstances
in others. Nevertheless, in recent years, a number of questions have been raised about whether merger
control is “fit for purpose” in the modern economy. Politicians, academics, and competition regulators
have raised fundamental questions about whether the consumer welfare standard remains the appro-
priate lens through which to assess transactions, or whether merger control should consider the
potential impact of a transaction on broader PI objectives, such as employment, the environment, data
privacy, national security, or industrial or trade policy.
The European Commission’s February 6, 2018, prohibition of the merger between the German and
French train manufacturers Siemens and Alstom pushed this question to the forefront in Europe. The
* Freshfields Bruckhaus Deringer, Brussels, Belgium; Washington, DC, USA
Corresponding Author:
Jenn Mellott, Freshfields Bruckhaus Deringer, Bastion Tower, Marsveldplein 5, Brussels 1050, Belgium.
Email: jennifer.mellott@freshfields.com

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Mellott and Ciric
209
EC’s decision in Siemens/Alstom initiated significant debate over the role of PI in merger reviews at
the EU level too. A “Manifesto for a European industrial policy fit for the 21st Century” was published
on February 19, 2018, in which the German and French governments (later joined by Poland) jointly called
for significant EU policy changes following the Siemens/Alstom prohibition, including introducing the
possibility for the European Council to override the European Commission’s merger decisions in
“well-defined cases” and “subject to strict conditions.” In subsequent months, these politicians have
walked back their position, with Germany proposing a much less aggressive revision to its national merger
control process1 and France taking a much more subdued approach to the proposed acquisition by Italian
shipyard operator Fincantieri of the French yard Chantiers d l’Atlantique, which the Italian government has
positioned as essential to protecting jobs, the European economy, and national security.2 Nevertheless,
politicians and regulators in the EU continue to debate whether the Commission should adjust the way in
which it considers factors such as global competition, potential future competition, and the extent to which
state ownership and support for competitors in some countries can distort competition globally.3
In the United States, similar concerns have been raised by the New Brandeis School, sometimes
referred to as the New Progressive Antitrust Movement or “Hipster Antitrust.” Advocates—including
several prominent democratic presidential candidates—have called for expanded enforcement to
combat a perceived rise in market concentration and the widespread use of unfair commercial practices
by companies with a high market share. Solutions proposed range from full out abandonment of the
consumer welfare standard to the expansion of the standard to allow consideration of a transaction’s
effects on PI factors.4
Many merger control regimes globally already include some degree of PI review. In thinking about
whether it would be reasonable or appropriate to add or strengthen the PI component of a merger
control regime, it may be helpful to look at regimes that already include a PI component to consider the
ways in which this may be structured and—more importantly—whether these standards are successful
in achieving PI aims. This piece surveys the existing merger control regimes that include a PI com-
ponent and cases in those jurisdictions in which PI considerations have played a fundamental role and
identifies lessons that may be useful for jurisdictions considering whether and how to expand a merger
control regime to include PI.
This review shows that a risk of transaction uncertainty and divergence in outcome for global
transactions arises from the fact that there is no universal definition of what constitutes PI. PI depends
on the social, cultural, and political context of the jurisdiction in question and can change over time.
This ambiguity is compounded by the fact that many regimes do not specify what PI the regime is
intended to protect but instead merely allows intervention where it is in the general public interest.
This potential for divergence and uncertainty suggests that PI intervention should be limited only to
exceptional transactions where there is a significant and overriding PI concern. PI regimes should not
1. Thibault Larger, Germany Finalizes Proposed Changes in Competition Rules, POLITICO (July 10, 2019), https://www.politico.
eu/article/germany-finalizes-proposed-changes-in-competition-rules/.
2. Natalie McNellis, Fincantieri’s Shipbuilding ‘European Champion’ May Not Float With EU Regulator, MLEX (Jan. 24,
2019), https://mlexmarketinsight.com/insights-center/editors-picks/mergers/europe/fincantieris-shipbuilding-european-
champion-may-not-float-with-eu-regulator.
3. See, e.g., Matthew Heim, Modernising European Competition Policy: A Brief Review of Member States’ Proposals, BRUEGEL
INST. (July 24, 2019), https://bruegel.org/2019/07/modernising-european-competition-policy-a-brief-review-of-member-
states-proposals/.
4. See Makan Delrahim, Assistant Att’y Gen., Dept. of Justice Antitrust Div., Stand By Me: The Consumer Welfare Standard
and the First Amendment, Remarks at the Open Markets Institute Event: Antitrust and the News, (June 12, 2018), https://
www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-open-markets-institute-event; see
also Open Markets Institute, The Corner Newsletter, June 12, 2019: New Study Shows How Mergers, Merger Enforcement
Can Hurt Consumer Choice (June 12, 2019), https://openmarketsinstitute.org/newsletters/corner-newsletter-june-12-2019-
new-study-shows-mergers-merger-enforcement-can-hurt-consumer-choice/.

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The Antitrust Bulletin 65(2)
be used as a matter of course to extract concessions from parties to a global transaction for limited,
local economic benefit, such as commitments to retain employment or to continue purchasing from
local suppliers for a short period of time following closing.
PI regimes should also avail themselves of sector-specific expertise and public policy experience of
sector regulators, as competition authorities are neither best placed nor well equipped to assess whether
a transaction is in the PI. To the extent possible, these regimes should also be transparent, with clear
rules as to what PI considerations are relevant and a right of appeal. These safeguards increase
certainty for parties by establishing clear expectations as to when and how PI considerations may
be relevant and limit abuse.
Methodology
The authors have identified thirty-nine merger control regimes that incorporate a PI component. Each
of these jurisdictions takes one of four broad approaches to assess PI:
(i)
jurisdictions where the impact of the transaction on PI is examined as part of the regular merger
control process (Australia, COMESA, Kenya, Mozambique, South Africa, and Zambia);
(ii)
jurisdictions that allow intervention in or override of a prohibition on PI grounds (Algeria,
Austria, Cyprus, Germany, France, India, Israel, Italy, Netherlands, Portugal, Saudi Arabia,
Singapore, Spain, Sweden, Ukraine, and United Arab Emirates);
(iii)
jurisdictions where a separate PI review exists in limited sectors (e.g., media) (Brazil,
Canada, Egypt, Hong Kong, Hungary, Iceland, Malaysia, Slovenia, Switzerland, the United
Kingdom, and the United States); and
(iv)
other jurisdictions where PI or public policy considerations have driven merger control
decisions in some cases despite the lack of a clear PI component in the regimes (Belgium,
Greece, Ireland, New Zealand, Poland, and Russia).
Within these four...