Competition law: mergers, cartels and abuse of dominance
The three things competition authorities police, real cases from the EU, India and the US, and the market share maths behind merger reviews.
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Key takeaways
- Competition law (called antitrust law in the US) protects customers from markets where firms stop competing.
- M&A cases: "Can we buy our biggest rival?" Always add a line on competition review: combined share, how long the review may take, and which remedies could cut the synergies.
- European Union: deals above set turnover levels (for example combined worldwide turnover above EUR 5 billion and at least two firms each with EU turnover above EUR 250 million) must be notified.
Key idea
Competition law (called antitrust law in the US) protects customers from markets where firms stop competing. Authorities police three things: mergers that would remove too much competition, cartels (rivals secretly agreeing prices or splitting markets), and abuse of dominance (a very large firm using its position to shut rivals out).
Rules differ by country, and any real deal needs lawyers. For a case you need the logic: which of the three questions applies, roughly how long a review takes, and what it could cost or change.
1. Merger review (checked on 1 October 2026)
- European Union: deals above set turnover levels (for example combined worldwide turnover above EUR 5 billion and at least two firms each with EU turnover above EUR 250 million) must be notified. The Commission has 25 working days for a first review (phase I) and 90 working days for an in-depth one (phase II), which can be extended (European Commission). In February 2019 it blocked Siemens' purchase of Alstom because it would have harmed competition in railway signalling and very high-speed trains (European Commission).
- India: since 10 September 2024, a deal worth more than INR 2,000 crore must be notified to the Competition Commission of India (CCI) if the target has substantial business in India, even when the target is small by assets or turnover. The CCI must form a first view within 30 days, or the deal is treated as approved, and the overall time limit fell from 210 to 150 days (CCI).
- United States: deals above a size threshold (USD 133.9 million for 2026, updated every year) must be filed with the Federal Trade Commission and the Department of Justice, and the parties must wait 30 days before closing. A "second request" for more information extends the wait (FTC). In December 2024 a US court, at the FTC's request, halted Kroger's USD 24.6 billion purchase of Albertsons, which would have been the largest supermarket merger in US history (FTC).
How do authorities judge whether a market is concentrated? A common tool is the HHI (Herfindahl-Hirschman Index): square each firm's market share in percent and add them up. It runs from near 0 (many tiny firms) to 10,000 (one firm). The US merger guidelines treat a market with an HHI above 1,800 as highly concentrated, and presume a merger is harmful when it raises the HHI there by more than 100 points, or creates a firm with more than 30 percent share and raises the HHI by more than 100 (US DOJ and FTC, 2023 Merger Guidelines). Other authorities use similar measures with their own thresholds.
| Company | Share before | Share after |
|---|---|---|
| A (buyer) | 30 | 50 |
| B (target) | 20 | 0 |
| C | 25 | 25 |
| D | 15 | 15 |
| E | 10 | 10 |
So-what
After the deal one firm holds half the market, and the next largest holds a quarter.
Worked case
Will this cement merger face a hard review?
The prompt
Using the table above: cement company A wants to buy rival B in one Indian state. Cement is heavy and costly to move far, so the relevant market is local. Company A expects INR 300 crore a year of synergies (savings from combining). Work out the HHI before and after, the change, and what that means for the deal.
The structure
- Concentration before and after, then what it means for timing, remedies and the synergy case
- HHI before: sum of squared shares
- HHI after: Company A and Company B combined
- Key: Change in HHI: 2 x share of A x share of B
- So what: review depth, likely remedies, effect on value
Working it through
1. HHI before
30 squared + 20 squared + 25 squared + 15 squared + 10 squared.
HHI before:30 × 30 + 20 × 20 + 25 × 25 + 15 × 15 + 10 × 10 = 2,2502. HHI after
Company A and Company B become one firm with 50 percent.
HHI after:50 × 50 + 25 × 25 + 15 × 15 + 10 × 10 = 3,4503. Change
The quick formula: 2 x 30 x 20. It matches 3,450 minus 2,250.
Change in HHI:2 × 30 × 20 = 1,2004. Synergies at risk
If the authority demands that A sells plants covering a third of the overlap, assume a third of the synergies go with them (an assumption to test).
Synergies kept if a third is lost (INR crore a year):300 × (1 - 1 ÷ 3) = 200
The recommendation
Expect an in-depth review. The market is already highly concentrated (HHI 2,250) and the deal adds 1,200 points and creates a firm with half the market, far above the levels that most authorities treat as a warning sign. The value case should assume a longer timeline and a likely remedy, such as selling plants, which could cut synergies from INR 300 crore to about INR 200 crore a year. If the deal only works with all the synergies and a fast close, it is a weak deal.
Risks: The authority may block the deal outright, as the European Commission did with Siemens and Alstom; Customers (builders) may complain and slow the review.
Next steps: Define the local market by how far cement can travel at a sensible cost; Identify plants that could be sold with the least loss of synergy.
2. Cartels
A cartel is an agreement between competitors to fix prices, split customers or regions, or limit output. It is treated as the most serious breach and can bring very large fines; in some countries the people involved can also face criminal charges. In the EU, fines can reach 10 percent of a group's worldwide turnover, and the first firm to report a cartel with enough evidence can get full immunity from fines (leniency) (European Commission). In July 2016 the Commission fined truck makers EUR 2.93 billion for colluding for 14 years on truck prices and on passing on the cost of meeting emission rules; MAN, which revealed the cartel, was not fined (European Commission). In India, the CCI found in September 2021 that United Breweries, Carlsberg India and SABMiller India (now AB InBev India) had run a beer cartel from 2009 to at least 2018. Penalties came to about INR 750 crore for United Breweries and INR 120 crore for Carlsberg India, while AB InBev received a 100 percent reduction as a lesser penalty applicant, India's word for leniency (PIB).
3. Abuse of dominance
Being big is legal. Using that size to shut out rivals, rather than winning on price and quality, is not. In June 2017 the European Commission fined Google EUR 2.42 billion for giving its own shopping comparison service a better place in search results than rivals; the EU Court of Justice upheld the fine in September 2024 (European Commission; Court of Justice). In October 2022 the CCI fined Google INR 1,337.76 crore for anti-competitive practices in Android mobile devices (CCI). In the US, a court found in August 2024 that Google had illegally kept a monopoly in search, and in September 2025 it barred exclusive deals for distributing Google Search, Chrome, Google Assistant and the Gemini app and ordered Google to share some search data with rivals (US Department of Justice). Appeals can change such outcomes, so check the latest status before quoting them.
A European manufacturer with worldwide group turnover of EUR 8 billion is caught in a cartel. What is the maximum EU fine, in EUR million, under the 10 percent cap?
Two airlines on a route have shares of 35 percent and 15 percent. By how many points does their merger raise the HHI on that route?
M&A cases: "Can we buy our biggest rival?" Always add a line on competition review: combined share, how long the review may take, and which remedies could cut the synergies. Pricing cases: never suggest "agreeing prices with competitors" or sharing future prices with them; suggest moves the client can make alone. Growth cases for a market leader: check whether the plan (exclusive deals, bundles, below-cost prices) could be seen as abuse of dominance.
See horizontal integration in the strategic movesWhich of these is a cartel?
Why do authorities look at local markets for products like cement?
Sources for this lesson (14)
- European Commission, competition policy: merger procedures, phase I and phase II time limits and turnover thresholds (official)
- European Commission: Commission prohibits Siemens' proposed acquisition of Alstom (press release IP/19/881, 6 February 2019, official)
- European Commission: Commission fines truck producers EUR 2.93 billion for participating in a cartel (press release IP/16/2582, July 2016, official)
- European Commission: Commission fines Google EUR 2.42 billion for abusing dominance as a search engine (press release IP/17/1784, 27 June 2017, official)
- Court of Justice of the European Union: press release No 135/24, the Court upholds the Google Shopping fine (10 September 2024, official)
- European Commission, competition policy: fines in antitrust cases, the 10 percent of turnover cap and leniency (official)
- Competition Commission of India: Fair Play newsletter volume 50 (July to September 2024), the deal value test and new merger review timelines from 10 September 2024 (official)
- Competition Commission of India: penalty of INR 1,337.76 crore on Google for anti-competitive practices in Android mobile devices (press release, 20 October 2022, official)
- Press Information Bureau, Government of India: Competition Commission penalises beer companies for cartelisation (September 2021, official)
- US Federal Trade Commission: 2026 update of premerger notification thresholds, size of transaction USD 133.9 million (press release, January 2026, official)
- US Federal Trade Commission: premerger notification and the merger review process, the 30 day waiting period and second requests (official)
- US Federal Trade Commission: statement on the court order halting the Kroger and Albertsons grocery merger (10 December 2024, official)
- US Department of Justice: Department of Justice wins significant remedies against Google (2 September 2025, official)
- US Department of Justice and Federal Trade Commission: 2023 Merger Guidelines, concentration (HHI) thresholds; a February 2025 memorandum keeps them in use (official)
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