Mergers And Acquisitions, Antitrust Regulatory System

With the promulgation of China's first Anti-monopoly Law in August 2007, Merger Control has become an emerging and hot area in China.Based on the published decisions made by Ministry of Commerce (MOFCOM), it can be found, however, that our enforcement authority needs to further improve its understanding and application of merger control rules, which also means the closer academic research is needed than ever.Therefore, by reference to the advanced experience gained in the U.S. and European Union, the thesis will use the published decisions as a starting point to analyse our existing merger control rules with a view to establishing a better merger control system more suitable to China's current stage of economic development. Also the thesis provides a preliminary analysis framework to draft the separate China's Merger Control Regulation or Merger Guidelines in the future.Apart from the introduction and closing, the thesis is divided into six chapters as follows:The first chapter addresses some basic relationships China's merger control is facing, such as the relationships between merger control and market competion, M&A by foreign investment and industrial policy. This chapter concludes that merger control is beneficial for maintaining effective competition which is crucial for the company's international competence; the different merger review policy must be in place for monopolistic M&A by foreign investment; industrial policy should play little role in merger review and competition policy must have priority to be applied by the enforcement authority. These findings will provide the theoretical foundation for discussions of micro-systems in the following chapters.The second chapter comments on the evaluation system of merger control. The main contents include the theoretical model (rule of reason), the major compoments of evaluation system (notification threshold, the definition of relevant market and review standards). This chapter also comprehensively discussed the different factors which may affect the effective competion in the horizontal and non-horizontal merger cases.The third chapter is relating to the defense rule of merger control. By introduction of European Union and U.S.'s practice, this chapter discussed the main defense types including efficiency, failing firms and potential market entry. Especial attention is paid to the application of the defense rule in the context of M&A by forein investment.The fourth chapter discusses the enforcement authority. The conclusion is that our multiple enforcement authorities do not well serve the purpose of China's Anti-monopoly Law. Among others, MOFCOM, as the enforcement authority of merger control, could face potential conflict of interests resulting from its different supervision roles. China should establish a uniform enforcenment institution in the future.The fifth chapter addresses major procedures issues during merger review. What can be mainly drawn from European Union's experience is that the review process should be based on the due process and the parties' rights to be heard must be guaranteed.The last chapter discusses the remedies of merger control. Remedies in the context of merger control are very new concept to China. Therefore this chapter's discussion is mainly based on European Union's latest rule relating to remedies including the types of different remedies, evalution principles and its enforcement.The main features of this thesis are as follows:1. The current structure of comparative research of the thesis is different from the traditional one, which normally addresses China-related issues only in the last chapter. However, the structure of this thesis is based on China's current legislation and the comparative research of each chapter is closely relating to China's context. This new initiative will strenghthen the logical links between foreign experience and China's practice, which otherwise could be difficult to be achieved by traditional comparative research.2. In relation to M&A by foreign investment, the mainstream point of view is that China should give foreign investment the national treatment in the process of merger control. However, this thesis's opinion is that a distinct principal of merger review for foreign investment must be established.3. The thesis also addresses the latest implementing rules (including draft for comments) recently published by MOFCOM in a systematic way for the first time and provide some relevant suggestions to perfect the micro-systems of merger control such as the evaluation standards, defense rules and review procedures.