Fifty is the New Forty: EU Merger Policy Permits Higher Market Shares After the 2004 Reform

I analyze empirically all of the European Commission's decisions regarding unilateral effects aspects of horizontal mergers before and after the 2004 reform, which introduced the significant impediment to effective competition test in merger policy. I find that, after the reform, the Commission did not change its stance toward mergers to monopoly or quasi-monopoly (almost always challenged) and mergers in un-concentrated markets (almost never). The new test produced more frequent challenges when the combined entity is not the largest firm, but these cases remain rare. The Commission's stance toward mergers that fall between these polar opposites appears to have been tougher pre-reform ceteris paribus.