Integration (vertical and horizontal)

The traditional theory of competition assumes atomized agents. Conversely, any large operator, even if this configuration is not prohibited, presents as an anomaly. Even more, if it performs several functions in a value chain, by a "vertical integration", for example at the same time a function of production, transport, distribution and sale, and that it is about a monopoly enterprise, the classical construction is thwarted. This is why the liberalization of sectors has been accompanied by a systematic destruction of the vertical integrations of incumbent operators, for example EDF.

Horizontal integration, for its part, corresponds to the merger of companies that are in the same segment of economic activity and which thus increase their market shares and their power, by playing in particular on economies of scale. Focusing on the assessment criteria for merger control, the question that arises more in regulated sectors is: should a very strong concentration of crucial or systemic operators be allowed to take place?

Indeed, we observe that the banks concentrate it more and more. Likewise, there are only three global rating agencies and four global audit firms. One can consider that the concentration in the regulated systems is a factor of more systemic fragility. On the contrary, it can be argued that in order to perform their "crucial" function these operators must be powerful and, if they are properly supervised, they should be rather concentrated.