Short articles

Tomorrow is another day! Merger review and counterfactual analysis


The choice of a counterfactual scenario other than the status quo is quite challenging. The investigation has to be particularly convincing if the deterioration of the competitive process which is likely to arise in the absence of the merger is related to a failing firm scenario – a special case of the more general counterfactual analysis. Could counterfactual analysis provide alternative tools to those required by the failing firm defense? Alternative but equally rigorous?
The extent to which a broader counterfactual analysis might be taken into consideration is discussed in the paper. More precisely it will be discussed i) if and when it may be desirable to focus the assessment not only on the most likely counterfactual, ii) if the incomplete fulfillment of the three requirements for the failing firm defense necessarily leads to a prohibition and iii) the role which may be played by entry and dynamic competition in the application of the failing firm defense. Finally, merger policy based on a broader counterfactual analysis is discussed in a bidding market context where tender design is not already set.


counterfactual analysis, failing firm defense, merger control, antitrust, economics

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Rivista Italiana Antitrust / Italian Antitrust Review
ISSN: 2284-3272

Iscrizione al Tribunale di Roma n. 300, del 12 dicembre 2013

Last issue published on February 28, 2019