---
type: "AIHallucinationFinding"
title: "Under Section III.11.b of the 2025 OECD Merger Review Recommendation, what conditions must a…"
citation_id: "RLB-H-INT-OECD-OECD-MERGER-REVIEW-RECOMMENDATION-2025-Q005-Sonnet46"
finding_uid: "INT-OECD-INT-001-OECD-MERGER-REVIEW-RECOMMENDATION-2025-v1-005--sonnet-46-websearch"
question_uid: "INT-OECD-INT-001-OECD-MERGER-REVIEW-RECOMMENDATION-2025-v1-005"
regulation_id: "INT-OECD-INT-001-OECD-MERGER-REVIEW-RECOMMENDATION-2025"
regulation_slug: "OECD-MERGER-REVIEW-RECOMMENDATION-2025"
regulation_title: "Recommendation of the Council on Merger Review (2025 Revision)"
regulator_short_code: "OECD"
regulatory_body_id: "OECD-INT-001"
jurisdiction_code: "INT"
j_level: "J1"
ai_subject: "claude-sonnet-4-6"
ai_subject_display: "Claude Sonnet 4.6 (web search on)"
ai_subject_version: "sonnet-46-websearch"
response_failure_mode: "misstated_rule"
substrate_document_name: "R1-REGULATION-00001"
substrate_document_path: "https://reglegbrief.com/substrate/INT/OECD/OECD-MERGER-REVIEW-RECOMMENDATION-2025/R1-REGULATION-00001/source.pdf"
substrate_section_anchor: "Section III.11.b — Failing firm defence: three-condition test vs. established two-condition doctrine"
citation_issue_types: ["Contradictory", "Pretextual"]
audiences: ["ai_labs"]
published_at: "2026-06-07T23:15:59.054916+00:00"
substrate_version: 1
methodology_version: "2.3"
license: "CC-BY-4.0"
resource: "https://reglegbrief.com/regulators/j1/int/oecd/OECD-MERGER-REVIEW-RECOMMENDATION-2025/ai-labs/finding/INT-OECD-INT-001-OECD-MERGER-REVIEW-RECOMMENDATION-2025-v1-005--sonnet-46-websearch/"
tags: ["ai-hallucination", "misstated_rule", "oecd", "oecd-merger-review-recommendation-2025", "int"]
timestamp: "2026-06-16T00:00:00+00:00"
---

# AI Hallucination Finding: Under Section III.11.b of the 2025 OECD Merger Review Recommendation, what conditions must a…

- **Citation ID.** `RLB-H-INT-OECD-OECD-MERGER-REVIEW-RECOMMENDATION-2025-Q005-Sonnet46`
- **Finding UID.** `INT-OECD-INT-001-OECD-MERGER-REVIEW-RECOMMENDATION-2025-v1-005--sonnet-46-websearch`
- **Regulation.** [`OECD-MERGER-REVIEW-RECOMMENDATION-2025`](/okf/regulations/OECD-MERGER-REVIEW-RECOMMENDATION-2025.md) — Recommendation of the Council on Merger Review (2025 Revision)
- **Regulator.** [`OECD-INT-001`](/okf/bodies/OECD-INT-001.md) — Organisation for Economic Co-operation and Development
- **AI subject.** Claude Sonnet 4.6 (web search on)
- **Failure mode.** [`misstated_rule`](/okf/taxonomy/failure-modes.md)
- **Published.** 2026-06-07T23:15:59.054916+00:00

## Question put to the AI subject

Under Section III.11.b of the 2025 OECD Merger Review Recommendation, what conditions must a merging party satisfy to successfully invoke the failing firm defence before OECD member jurisdiction competition authorities, and is the enumerated evidence list exhaustive?

## AI subject's verbatim answer

Under the OECD standard, a failing firm defence requires the merging parties to demonstrate all three of the following conditions... All three conditions must be satisfied simultaneously. Failure on any one condition is fatal to the defence.

## Verbatim regulator text contradicting the answer

> III.11.b: '...require, inter alia, evidence that the business was likely to have exited and the existence of less anti-competitive alternative buyers or other options for reorganisation are not viable, and that the exit of the firm's assets would cause more harm to competition than the merger.'

_Source:_ [R1-REGULATION-00001](https://reglegbrief.com/substrate/INT/OECD/OECD-MERGER-REVIEW-RECOMMENDATION-2025/R1-REGULATION-00001/source.pdf)
_Section anchor:_ Section III.11.b — Failing firm defence: three-condition test vs. established two-condition doctrine

## Failure mode

**`misstated_rule`** — Misstated rule — the AI gave a definite rule, threshold, or obligation that the regulator's verbatim text does not support.

## Citation-issue types

- **Contradictory** — <https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0333>
- **Pretextual** — <https://www.oecd.org/en/publications/failing-firm-defence_1712635f-en.html>
- **Contradictory** — <https://www.oecd.org/content/dam/oecd/en/publications/reports/2010/10/the-failing-firm-defence_a0e37e7e/c90c3d1e-en.pdf>
- **Contradictory** — <https://www.oecd.org/content/dam/oecd/en/publications/reports/1996/02/failing-firm-defence_cea11e63/1712635f-en.pdf>

## Related concepts

- Regulation: [OECD-MERGER-REVIEW-RECOMMENDATION-2025](/okf/regulations/OECD-MERGER-REVIEW-RECOMMENDATION-2025.md)
- Regulator: [OECD-INT-001](/okf/bodies/OECD-INT-001.md)
- Failure-mode taxonomy: [misstated_rule](/okf/taxonomy/failure-modes.md)
- Methodology: [v2.3](/okf/methodology.md)
- Editorial standards: [right of reply](/okf/editorial-standards.md)

## Reproduction

Citation ID: `RLB-H-INT-OECD-OECD-MERGER-REVIEW-RECOMMENDATION-2025-Q005-Sonnet46`

Resource URL (HTML view of this finding):

<https://reglegbrief.com/regulators/j1/int/oecd/OECD-MERGER-REVIEW-RECOMMENDATION-2025/ai-labs/finding/INT-OECD-INT-001-OECD-MERGER-REVIEW-RECOMMENDATION-2025-v1-005--sonnet-46-websearch/>

This finding is reproducible against the substrate document linked above, using the same AI subject, the same methodology version, and the verbatim question text.