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The implementation of REACH: Analysis of the anticompetitive effects

June 2009

Thematic Meeting of AFSE, Firms, Markets and Innovation, Sophia Antipolis, June 25-26, 2009

Co-authors: M. Deschamps, (University of Nice - CNRS) and  J-T. Ravix (University of Nice - CNRS)

The EC REACH regulation was enforced on 1st June 2007. REACH requires undertakings to prove the environmental and sanitary innocuousness of their chemical substances. The implementation of this regulation involves the production and exchange of a significant amount of technical and competitive information.

This presentation aims at identifying the potential anticompetitive effects of such a process. It shows that in the presence of REACH firms may be inclined to withdrawn the relevant information so that their rivals could not benefit from the most efficient process of cost sharing of the data production.

REACH could also help firms to reach anticompetitive goals by enabling an overuse of the REACH process of production in at least two ways. First, in the presence of REACH firms could engage in excessive information exchanges softening the competition between rivals. Second, firms could also produce an excessive amount of technical data in order to increase the common costs of homologation and by consequence raise rivals’ costs.

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