Mergers can have effects on numerous dimensions of competition other than price, including quality, variety, and innovation. However, the analysis of these effects can pose several practical challenges for competition authorities. In particular:
It can be challenging to identify markets in which non-price effects require substantial attention in merger review. The degree to which non-price effects are fundamental to competition will vary significantly. Competition authorities may need to prioritise certain non-price dimensions, or recognise when they play an ancillary role to price in the market.
The precise interaction of price and non-price effects may be difficult to capture. When non-price effects are relevant and important, it can be difficult to balance those effects with price effects – particularly if they move in different directions.
When non-price effects are relevant, it may also be challenging to identify how they should be factored into the merger review process. Non-price effects could conceptually be considered at each stage of a merger, including market definition, the competition assessment, the consideration of efficiencies, and the formulation of remedies. However, it may not be necessary or practical to incorporate non-price effects at each stage.
In June 2018, the OECD held a roundtable discussion to debate practical challenges of considering non-price effects, and strategies for dealing with these challenges. This page contains all available materials.