Skip to content

The Paradox of Discretionary Competition Law

Aaron L Nielson


Keywords: Mergers, Discretion, Bias, EU Competition Law

Jurisdictions around the world have been converging on a common analytical framework for merger review. Because the circumstances of proposed mergers (or combinations) are often idiosyncratic, the standards that competition authorities apply are flexible, thus providing economists with discretion to perform individualized, merger-specific analysis. Jurisdictions thus have moved away from—or declined to adopt in the first place—bright-line rules in favour of open-ended standards. This shift away from bright-line rules, however, may create a paradox: the very discretion necessary to achieve right outcomes is the cause of wrong ones. Although open-ended standards allow competition authorities to better tailor their analysis, they also empower them to act for pretextual reasons, especially in contexts for which politicized decision-making is most tempting such as the ‘online world.’ Likewise, even when a competition authority’s analysis is not pretextual, discretionary standards may make it more difficult for it to effectively rebut allegations of pretext. Hence, although doing so may introduce more imprecision into merger analysis, greater reliance on bright-line rules might nonetheless be justified.
Keywords: Mergers, Discretion, Bias

Aaron L Nielson, Associate Professor, J Reuben Clark Law School, Brigham Young University. For correspondence: <>.


Lx-Number Search

(e.g. A | 000123 | 01)

Export Citation