Comparative Analysis Between EU And China On The Behavioral Remedies In The Merger Control

As the economy of the PRC has experienced a rapid development,more and more enterprises intend to promote the competitiveness and the capacity of market control through acquisition,merger as well as the establishment of Joint Ventures.Accordingly,the control of illegal mergers has become an important issue of our antitrust law.The merger control is regulated in the fourth part of the PRC Antitrust Law.According to Art.29 thereof,the antitrust authority has the power to add restrictive conditions to the merger plan in order to approve the merger.The restrictive conditions in the merger control,or in another words the merger remedies,are important aspect of the merger control,in which the key issue is how to determine the proper remedies.Up to November 2017,the MOFCOM has approved 32 merger cases,among which 18 cases were approved with behavioral remedies,6 with structural remedies,8 with comprehensive remedies.The MOFCOM prefers to use behavioral remedies to solve the competitive problems arising from the merger of undertakings,even in the horizontal merger cases.However,the European Commission insists on the principle of the preference on structural remedies,since the structural remedies can directly change the market structure and reconstruct the competition order without long-term supervision.Judging from the different attitude of the MOFCOM and the European Commission on the behavioral remedies,this article systematically analyses the purpose of the merger remedies and its application in the merger control.This article comprises five parts as follows:Chapter One begins with the analysis on the concept of the merger remedy.Then,this article summarizes the development history of the merger remedy in order to find out the position and the function of the merger remedy.The merger control system and the merger remedies were created in the US.Then the merger remedies were transformed into the commitment regime in the Europe.The merger remedies are designed for the gray area between the unconditional approval and the prohibition.When the antitrust authority examine the concentration scheme with the merger remedies,the antitrust authority shall take into consideration the value conflict between the self discretion of the company and the effective competition in the market.Chapter Two focuses on the preference between the structural remedies and the behavioral remedies.There are three different attitudes towards this issue i.e.(?)the prohibition of the behavioral remedies;(?)the permission of the behavioral remedies;and(?)the priority of the structural remedies over the behavioral remedies.The merger control system in China supports the second attitude and holds the opinion that the behavioral remedies are useful measures for the elimination of the anti-competitive effect,just the same as the structural remedies.The antitrust authority shall select remedies according to the situation in the specific case in spite of the structural remedies or the behavioral remedies.In the contrary,the merger control in the EU has experienced a change from the prohibition of the behavioral remedies into the priority of the structural remedies.This change has a close relationship with the economic background in the Europe and the legal tradition of the antitrust law in the EU.However,as the factor of the high technologies has taken more and more position in the examination of the concentration,the European Commission intends to give more and more tolerance on the behavioral remedies.Therefore,it would be a trend in the field of the merger control that the application of the behavioral remedies may become frequent.Chapter Three analyses the application of behavioral remedies under different types of mergers.There are three types of mergers i.e.the horizontal merger,the vertical merger and the conglomerate merger.The type of the merger may influence the effectiveness of different behavioral remedies.Chapter Four points out the problems in the current merger control in China based on the theoretic and practical analysis in the above chapters.Firstly,the antitrust authority in China prefers to use behavioral remedies in the merger control.However,the regulation on the merger remedies mainly focuses on the asset stripping,the representational measure in the structural remedies.The relevant rules on the asset stripping shall analogically apply to the behavioral remedies and other structural remedies.Thus,the legislation on the merger remedies does not comply with the legal practice well.We understand that the asset stripping is an important and complicated measure in the merger control,deserved to be specifically regulated by law.Nevertheless,this is not an excuse for the legislators that they do not have to set out rules for the behavioral remedies,which are widely and frequently applied in the merger control.Due to the loophole in the behavioral remedies,the application of the behavioral remedies varies from case to case,lack of unified examination standard and relevant supervision mechanism.The MOFCOM is legally entitled with great power to intervene in the concentration of the undertakings,which may cause the abuse of the power and the infringement of the basic rights owned by the undertakings.The specific regulation on the behavioral remedies is extremely required in the merger control in China.Chapter Five suggests some solutions in accordance with the problems in Chapter One.This chapter consists of two parts.Firstly,we should know how to determine the behavioral remedies.Since the initiative right of the undertakings is not regulated in the merger control of the PRC,the MOFCOM shall observe the principle of proportionality.Secondly,the specific regulations regarding the supervision of behavioral remedies shall be established.