This paper aims to address the change in the legal standard of merger assessment due to the reform in the ECMR that occurred in 2004. As regards the substantive reforms, the substantive test was changed from the dominance test to the significant impediment to effective competition test. This paper will address initially through caselaw analysis the issue of mergers leading to non-coordinated effects in oligopolistic markets (“non-collusive oligopolies” or “gap” cases); examine how the legal substantive test deals with non-collusive oligopolies; and identify such cases in the current case law. A means of confirming the existence of gap mergers is to evaluate the market perception of the competitive effects of such mergers. Event study analysis aims at assessing the stock market’s perception of mergers and examines whether the European Commission’s decisions to prohibit or allow such mergers are reflected in the expectation of the stock market. Thus, this paper will first briefly present the substantive reforms in the legal standard and then adopt a caselaw approach in identifying gap cases. Subsequently, this caselaw analysis will be supplemented by quantitative analysis (i.e. the event study), as an additional confirmation of the existence of gap cases in the application of the dominance test. The proof of the existence of such cases signifies the need of the reforms to the legal standard employed in the original ECMR. Even though the legal substantive test has been changed from the “dominance test” to the SIEC in the Recast ECMR, and thus would appear to rectify the “gap” in the European Community merger regime, the occurrences of such “gap” cases may not cease under national laws that still adhere to the traditional dominance test.
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