The Application And Perfection Of Merger Relief In China

Merger remedies refer to the modifications proposed by the merging parties to the competition authority to address the identified competition concerns arising from the notified merger transaction. If the commitments offered are assessed to be full and effective enough to restore the conditions of effective competition, the transaction will be cleared in avoidance of prohibition.Merger remedies consist of various commitments, which can be separated into two categories: structural and behavioral remedies. Divesture, a typical means of structural remedies, is to divest a package of assets or ongoing business to the third party to ensure sufficient competition in the affected markets. Certain requirements, such as the appointment of monitoring trustees, the crown jewel divestiture, up-front buyer, and hold-separation, are used to safeguard the implementation of the divesture. Meanwhile the other type of relief, behavioral remedies, are imposing orders or obligations on the merging entity to modify or limit its future conducts, such as fire-wall clause, obligations to refrain from discrimination sales etc.How to choose the appropriate remedial measures among these above to remove the anti-competitive effects, how to safeguard the effectiveness and appropriateness, and how to implement and monitor the merger remedies are questions that haunt merging parties, the authorities and scholars.China is now facing such issues in its application of merger remedies since its Anti-Monopoly Law came into force in 2008. The Anti-Monopoly Bureau of MOFCOM, as the competition authority in charge of mergers controls, has imposed the merger remedies in six transactions so far, including Bev NV SA/Anheuser-Busch Companies Inc, Mitsubishi Rayon Corp/Lucite International Inc, GM/Delphi, Pfizer/Wyeth, Panasonic/Sanyo, and Novartis/Alcon. Great progress has been made; however, the practices are still not so satisfactory due to the lack of transparency and the vacuum in guiding rules.This dissertation is to provide the studies on merger remedies, to compare the current legislations and cases of China with the rich experiences in the mature regimes of the U.S. and the EU, and thus to extract some valuable insights for China to improve its merger remedies application in the anti-monopoly enforcement. In particular, based upon the analysis and reasoning in the theory, practice and rules on the application of merger remedies, the author drew the main conclusions that China are expected to clarify the vagueness in the rules and gap the bridge, enhance the role of economy in the identification of the anti-competition effects, and design more flexible application model of merger remedies on the case-by-case basis, and stimulate industry associations, competitors, and consumers in the market to monitor the implementation of merger remedies.