Mergers and Acquisitions in the higher education sector in Brazil
CADE's decisions under the consumer welfare standard and the public interest theory
Keywords:
Competition/Antitrust Law. Higher Education. Consumer Welfare Standard. Public Interest Theory. Educational Constitutional Principles.Abstract
[Purpose] To verify if the decisions of the Administrative Council for Economic Defense - CADE, in Merger and Acquisition (M&A) cases in the higher education sector were guided by the methodological approach of the Chicago School of economic thought, whose central purpose can be summarized by the “consumer welfare standard”.
[Methodology/approach/design] Critics of the Chicago School say that antitrust authorities should be concerned with aspects such as quality and diversity, among others. Under these perspectives critical perspectives of antitrust law, combined with the regulatory theory of public interest, this article will analyze whether the decisions of M&A cases in the higher education sector, from 2001 to 2020, were guided by the consumer welfare standard. Critical approaches to antitrust law are linked to non-economic values connected to constitutional principles such as social justice, equal opportunities, and the supremacy of the public interest, which promote the protection of fundamental rights, including the right to higher education.
[Findings] Almost all higher education merger decisions were guided by the consumer welfare standard, implemented based on neoclassical theories of price, which practically does not include aspects such as quality, diversity, and does not focus on the competitive process and the structural dynamics of the sector.
[Practical implications] The historical analysis of M&As in the higher education sector, both in terms of data compilation and in terms of the analysis of the approaches adopted, can help critical discussions of the trajectory of CADE's judgments and guide new approaches to the decision making in future for-profit higher education sector M&As.
[Originality/value] The article contributes to the theoretical and empirical development of antitrust law by discussing the theoretical bases of the approaches adopted by the Brazilian antitrust authority and by proposing that new approaches should be guided by the principles and purposes of each sector.
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