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The OECD has issued a new Policy Roundtable report entitled: Economic Evidence in Merger Analysis, which includes a discussion of Canada.

Abstract:

“The OECD Competition Committee debated economic evidence in merger analysis in February 2011. This document includes an executive summary of that debate and the documents from the meeting: a background note by Prof. Mike Walker for the OECD and written submissions: Austria, Brazil, Canada, Chile, China, Denmark, Finland, France, Germany, Greece, Hungary, Indonesia, Israel, Japan, Korea, Mexico, Netherlands, New Zealand, Portugal, Romania, Russian Federation, South Africa, Sweden, Switzerland, Chinese Taipei, Turkey, United Kingdom, United States, the European Union, and BIAC as well as an aide-memoire of the discussion.

The roundtable indicated that economic evidence plays an important role in the assessment of mergers. To be reliable it should be based on clear economic theory, and should be transparent, replicable and intuitive to allow non-economists to fully understand the analysis. Agencies, however, emphasized that the role of economic evidence should be put into perspective. Many mergers do not require a time consuming, costly and burdensome economic assessment.

Economic tools, such as Upward Pricing Pressure (UPP) indices or mergers simulations can be useful screening measures, but the usefulness of their results is subject to the assumptions made and to the quality of the data available. When economic evidence produces inconsistent results from other evidence, understanding what is driving the divergence can provide insights into the likely effects of a merger.

In order to help companies involved in competition cases to achieve this, a number of competition authorities have issued Best Practice Guidelines on the presentation of economics evidence in merger cases.”

For a copy of the Report see:

Economic Evidence in Merger Analysis

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