Failing firm doctrine an exemption not a rule in Merger Control legislation

Abstract: The failing firm doctrine (FFD) has been firstly enounced 1921 in case International Shoe Co v FTC. The key case in EU is Kali where the Commission has discussed the concept of FFD in depth. The Commission has established that FFD is not the rule but the exception from the rule that horizontal mergers are harmful for the competition. The binding Acts in the field of Merger Control are EU Regulation (EC) No 139/2004 corresponds to chapter 7 of the US Clayton Act- (15 USC § 18). This paper provides a comparative analysis of the interpretation of the FFD given by the courts in United States and in Europe. It analyzes some cases founder of the theory and examples of arguments exchanged in the context of its application. Finally, it examines if it has been any adjustment of application of the FFD during the financial crisis period. I start by presenting the U.S. legislation in this field of law and the European counterparts and compare them. I also present the effects and the substantive assessment in both legislations. Then I try to identify possible trends in the application of this theory.