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Test SLC (merger)
Global Dictionary of Competition Law
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DEFINITION
The substantial lessening of competition or “SLC” test is a standard that regulatory authorities use to assess the legality of proposed mergers and acquisitions. The SLC test examines whether a prospective merger is likely to substantially lessen competition in a given market. Its purpose is to prevent mergers that increase prices, reduce output, limit consumer choice, or stifle innovation as a result of a decrease in competition. Mergers that substantially lessen competition are prohibited under the laws of the jurisdictions that utilize this test, such as the USA, EU, Canada, the United Kingdom, Australia and Nigeria, amongst others.