Compare Study Of The Essential Criteria Of Merger Control Between U.S. And EC Merger Control Legislation

Mergers between undertakings can usually change the marketstructure, then affect the competition. Merger control is animportant part of competition law of each country. The U.S. andthe European Community are the two important markets in the world.They have mature antitrust law that is acknowledged by othercountries. By studying the essential criteria of the mergercontrol law of the two countries (or international organization),we can know their basic attitude to the merger case and afford somesuggestion to our own legislation. The essential criteria of merger control are used to judgewhether a merger may produce or enhance the undertakings' marketpower, so harm the competition. The essential criteria includetwo aspects: the definition of the relevant market and the analysisof competition effect of merger. The definition of the relevantmarket is the first phase in the essential criteria. The analysisof the competition effect of merger is the second phase. When amerger has anti-competition effect, the agency or the court mayenjoin the merger or force the undertakings accept some additionalconditions. In the definition of the relevant market, the hypotheticalmonopolist paradigm is the core issue in the United States. Thisparadigm is also partly acknowledged by the European Community.The hypothetical monopolist paradigm is like a lens through whichall the evidence are reviewed. Both the U.S. and the ECacknowledge the cross-elasticity theory. By seeing about theprice, the physical ability and the use of the product, thedefinition of the relevant market can be accomplished from thedemand side and the supply side. Though in the definition of therelevant market, the two countries have some differences in theuse of the supply substitutability theory. The U.S. and the EC adopt different criteria in merger analysis.The U.S. adopts the SLC criteria, while the EC use the dominanttest. But the reforms of the EC merger control law, especiallythe new definition of the dominant test, make the two countries'criteria closer. The analysis of the competition effectincludes the following issues: the concentration rate of therelevant market, market shares, market power, market entrance,potential competition, consumer benefit, efficiency, brokenenterprises. Both the development of the U.S. and the EC mergercontrol law can reflect that market shares and marketconcentration are not the decisive aspects but are start point ofmerger analysis. The essential criteria of the U.S. and the EC are different inthe definition of the relevant market and the analysis ofcompetition effect.