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Copyright (c) 1997 Law and Policy in International Business 
Law and Policy in International Business

NOTE: Mergers And Acquisitions In The European Community And The United States: A Movement Toward A Uniform Enforcement Body

Fall, 1997

29 Law & Pol'y Int'l Bus. 115


David Snyder *



The extraterritorial application of competition laws is common in the world market. The European Community (EC) and the United States, which have the two largest international economies in the world, 1 often find themselves regulating the same mergers and other financial transactions. This creates a potential for conflict, and the resulting tension leads to efforts to harmonize EC and U.S. competition laws. While harmonization is itself important, it may not be enough to ensure efficient regulation of the market. In addition to considering the substance of the laws being applied to mergers, we must also account for factors other than competition policy that influence the decisions of regulatory bodies.

This Note will argue that the current system of extraterritorial application of competition laws, while beneficial from a purely competitive standpoint, is not optimally efficient for the world market. Because nations consider industrial policy 2 when investigating mergers, efficiency losses can result. The recent merger between Boeing and McDonnell Douglas 3 reveals the tensions placed on enforcement bodies in considering both industrial and competition policy. The Boeing merger highlights the possible efficiency losses caused by the current EC and U.S. systems of extraterritorial regulation of mergers. This Note suggests a new system that will avoid these efficiency losses.

Under the current system, national merger and acquisition authorities have an incentive to advance industrial policy in an attempt to increase national welfare relative to other countries. 4 With the Clinton administration's stance on government intervention, ...
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