Last month the European Commission conditionally cleared London Stock Exchange Group’s (LSEG) acquisition of Refinitiv. LSEG operates trading venues such as the London Stock Exchange, clearing houses such as LCH and also publishes the FTSE Russell indices. Refinitiv (a spin-off from Thomson Reuters) offers financial data products, such as desktop services and datafeeds.
One of the issues raised by the merger was the Commission’s treatment of efficiencies in non-horizontal mergers that ignores the linkages between the incentives to raise rivals’ cost (“RRC”) and the elimination of double marginalization (“EDM”). As a result, the Commission seems inclined to require more evidence of EDM effects than of RRC effects.
In this competition memo Dr Dan Donath, Dr Robert Stillman and Dr Uğur Akgün show that such approach is not justified due to the relationship between the RRC and EDM effects using the LSEG/Refinitiv merger as an example and discuss how the merging parties should engage with the Commission to ensure that both of the effects are taken into account in the competitive assessment.
To read the memo please click here.