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    Question

    Company X acquired Company Y, resulting in a combined

    market share of 45% in a market where the top two players have 35% and 40% shares. The CCI is assessing the merger's competitive impact. Which statements are correct? Statement 1: The merger is automatically prohibited because combined share exceeds 40%. Statement 2: The CCI must assess whether the merger substantially lessens competition before approving or rejecting. Statement 3: The CCI can approve the merger with conditions such as divestiture of overlapping business. Statement 4: Historical information about the parties' competitive behavior is irrelevant to merger assessment. Which statements are correct?
    A Statements 2 and 3 only Correct Answer Incorrect Answer
    B Statements 1 and 4 only Correct Answer Incorrect Answer
    C Statements 1, 2, and 3 only Correct Answer Incorrect Answer
    D Statements 1 and 3 only Correct Answer Incorrect Answer
    E All statements are correct Correct Answer Incorrect Answer

    Solution

    Market share alone doesn't trigger prohibition—Statement 1 is incorrect. CCI must assess competitive impact—Statement 2 is correct. Conditions can be imposed—Statement 3 is correct. Historical behavior is relevant—Statement 4 is incorrect. Statements 2 and 3 are correct.

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