This is the Cato Daily Podcast for Monday, June 14th, 2021. I'm Caleb Brown.

When two companies want to merge, would they be better off located in Europe or the US?

The answer has implications for leadership in tech going forward.

Sam Bowman directs competition policy at the International Center for Law and

Economics.

We spoke last week about the costs and benefits and

even chilling effects of getting antitrust policy wrong. You're bringing to

this a more global perspective.

When we think about antitrust,

what's the difference between US and Great Britain

or other countries when it comes to viewing companies that might be might look suspiciously like a monopoly.

Well, in the US, the system is very much based on lawsuits and very much based on the Department of Justice or the FTC challenging a merger or an acquisition in a court and having to prove its case in the court.

In Europe and in the United Kingdom it's a much more regulatory

model where there is a competition agency that reviews mergers and can decide based on its own kind of principles and the rules that have been set for it by a government,

whether it thinks that merger is likely to be pro-competitive or anti-competitive.

And even though it operates within the rule of law and so on, it's a much,

much more discretionary approach than the kind of court-based system that exists in the U.S.

And so typically the bar to blocking a merger is lower in the European and UK assistance.

Okay so it's more easy for European regulators to block mergers than it is in the US because there's

this sort of proactive requirement in the US that somebody issue a challenge, is that right?

That's right, but issuing the challenge can itself be so costly for the merging companies

that they often abandon mergers on that basis.

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