Glossary of competition terms

This Glossary is based on definitions from DG COMP’s Glossary of terms used in EU competition policy (© European Union, 2002) and the OECD’s Glossary of industrial organisation economics and competition law (© OECD, 1993). Each term is enriched with references of national case laws from the e-Competitions Bulletin and Concurrences Review.

Merger remedies

The purpose of a remedy is to maintain or restore competition otherwise lost due to the merger, while permitting, if possible, the realization of efficiencies and other benefits. To accomplish this goal, a competition authority determines the nature and scope of competitive harm within its own jurisdiction before requiring remedies or agreeing to proposed remedies.

Merger remedies are conventionally classified as either structural or non-structural. An effective package of remedies may contain a combination or “hybrid” of both structural and non-structural elements.

Structural remedies are generally one-time remedies intended to maintain or restore the competitive structure of the market. Structural remedies typically involve the sale of one or more businesses, physical assets or other rights to address the competitive harm, either by strengthening an existing player, creating a new source of competition or a mix of both. Such remedies provide independent firms with incentives to maximize profits separately from the merging parties so as to maintain competition in the market. In many cases, a well-designed structural remedy can preserve some of the efficiencies that a proposed merger offers.

Non-structural remedies, often referred to as “conduct” or “behavioural” remedies, are ongoing remedies that are designed to modify or constrain the future conduct of merging firms. By contrast to structural remedies, non-structural remedies do not restructure firms or asset ownership – they permit integration subject to specific operating rules. Non-structural remedies seek to change marketplace behaviour to encourage competition through conditions or prohibitions on behaviour that prevent the merged firm from undermining competition.

© International Competition Network

Glossary