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The Office of Fair Trading said Diageo's Bell's whisky competes with Whyte & Mackay's own-label and branded whisky and that its acquisition of the United Spirits stake could lead to "a substantial lessening" in competition.
If these incentives are reflected in firm behavior, they would imply a substantial lessening of competition among publicly-traded firms.
The CMA has concluded that the merger may not be expected to result in a substantial lessening of competition.
The OFT referred the proposed deal to the Competition Commission for further investigation, arguing that there was a "realistic prospect of a substantial lessening of competition".
Simon Polito, who chaired the competition commission inquiry, said it had "confirmed our provisional view that Ryanair's minority shareholding has resulted, or may be expected to result, in a substantial lessening of competition between the airlines".
All was set fair for the deal until yesterday, when the Office of Fair Trading said it could lead to a "substantial lessening of competition" in the computer games magazine market and referred it to the Competition Commission.
Similar(22)
The Board may, by agency order, exempt an interlock from the prohibitions in § 212.3, if the Board finds that the interlock would not result in a monopoly or substantial lessening of competition, and would not present safety and soundness concerns.
Unless a shorter expiration period is provided in the Board approval, an exemption permitted by paragraph (a) of this section may continue so long as it does not result in a monopoly or substantial lessening of competition, or is unsafe or unsound.
It said there was "a realistic prospect of substantial lessening of competition" in these areas where the two companies overlapped.
Coming back to policy implications, notice that horizontal mergers are commonly proposed and usually accepted in case there is no substantial lessening of competition or the merger is a necessary condition to achieve efficiency gains.
"We concluded that, subject to reviewing the detail of any agreement, a partial divestiture of one or more stations involving a brand-licence arrangement between the acquirer and Global was a credible divestiture mechanism and was capable of being effective in addressing the substantial lessening of competition".
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com