Merger Policy in the E-conomy

Bachelor Thesis from the year 2002 in the subject Law - Civil / Private, Trade, Anti Trust Law, Business Law, grade: First Class, University of Strathclyde (Strathclyde Business School - Law School), course: Strathclyde Business School, language: English, abstract: This paper addresses the economic policy context surrounding theEuropean merger regulation in high-tech industries. The rapidity oftechnological change raises questions as to the operation of thedynamic parameters underlying high-tech industries. While theidentification of those parameters appears to be straightforward, theinterpretation of the effects posed by the dynamics is rathercontroversial.On the one hand, it is argued that the very dynamics of high-techindustries create or strengthen dominant companies wherebyconsumers run the risk of adopting inefficient technologies.However, the present paper is to contest this reasoning sinceperformance competition and the resultant Schumpeterian process ofdisequlibria makes a so-called lock-in unlikely. The second chapter is to identify the distinctive parameters of hightechindustries, whereby a contrasting analysis between the twodimensions of economic performance, establishes dynamiccompetition as best utilised to serve the furtherance of consumerwelfare. The third chapter is to consider the implications of dynamiccompetition for current relevant market definition by discussing thedeficiencies of current practice. Recent competitive developmentsappear to confirm a broad, intermarket and technologies-basedcompetition among firms. The fourth chapter, therefore, seeks topropose analytical tools that are capable of evaluating the state ofcompetition more accurately. To that end, the cornerstones ofrelevant market definition are redefined by including a performancebased test, an enquiry into capability explanations and the setting oftime frames to assess entry competition. The final chapter is to conclude that although Schumpeteriandynamic competition deals with the expectation of innovation, theproposed analysis is the more accurate approach to intermarketcompetition. The goal of this paper is to provide a pragmaticframework that assists merger analysis in evaluating the ongoing transformation of industrial organisation in the high-techenvironment.