Research On "Crown Jewel" Rule Of Divestiture Remedy In Merger

Since the beginning of the 21st century,the phenomenon of mergers in our country has become more and more active in the economic market,and it is common in all walks of life.Merger can bring economic benefits,but it can also bring some antitrust effects.Therefore,in some countries,restrictive conditions will be attached to the merger which may have antitrust effects,that is,antitrust merger remedies."Crown Jewel"rule is also known as the alternative divestiture remedy,which is an asset divestiture remedy aiming to ensure the success of divestiture."Crown Jewel" rule specifically is the divestiture remedy in mergers,the merger applicants not only provide preferred divestiture plan,but also provide alternative divestiture plan,once the preferred divestiture plan fails,then they need to implement alternative divestiture plan."Crown Jewel"rule in our country can be called the first law enforcement,legislation lag.The merger of Lucite by Mitsubishi Company in 2009 and the merger of Xstrata by Glencore Company in 2013 are the only two practices of the "Crown Jewel"rule in China.However,it was not until 2014 that the "Crown Jewel"rule was incorporated into China's legal system for the first time in the "Regulations on Merger with Restrictive Conditions(for Trial Implementation)" promulgated by the Ministry of Commerce,which is also the only legal document on the "Crown Jewel" rule in China at present.The "Crown Jewel" rule in the European Union and the United States have relatively clear legal provisions and lots of practices,providing other countries and regions with a reference for the legislation and practices,and China's "Crown Jewel"rule related legislation is not perfect and the lack of practice has undoubtedly greatly increased the difficulty of the development of "Crown Jewel"rule in China.At the legislative level,the applicable conditions of the "Crown Jewel" rule in China are too vague and the scope of the "Crown Jewel" assets is not clearly defined.In the Regulations on Merger with Restrictive Conditions(for Trial Implementation)issued by the Ministry of Commerce of China,it is only pointed out in principle that the merger application of the "Crown Jewel"rule is "the risk is that the preferred divestiture cannot be implemented".Therefore,the definition of "the risk is that the preferred divestiture cannot be implemented" becomes the focus of the application of the "Crown Jewel"rule.China should make a clear definition of "Crown Jewel" assets,that is,the "stricter" in "the alternative should be more stringent than the conditions of the preferred divestiture".On the one hand,China should make a clear relationship between the preferred divestiture assets and the alternative divestiture assets,whether it is a brand-new asset-package relationship or an expanded asset-package relationship.On the other hand,the margin of "strictness" in the definition of "stricter"can be comprehensively considered from the competitiveness standard,quality standard,viability standard and marketability standard of alternative divestiture assets relative to the preferred divestiture assets.At the level of law practices,the follow-up information disclosure and continuous supervision of the "Crown Jewel" rule in China are insufficient.Therefore,China should improve the follow-up information disclosure mechanism and the continuous supervision mechanism of the "Crown Jewel" rule.On the one hand,China should improve the follow-up information disclosure mechanism of the "Crown Jewel" rule,starting from the law enforcement agencies and the parties involved in the concentration of operators,for example,we can consider establishing an information tracking platform of the concentration of operators.On the other hand,China should also improve the continuous supervision mechanism of the "Crown Jewel" rule,for example,the continuous follow-up visit to the relevant market competition,and according to the relevant information obtained from the follow-up visit to analyze and summarize,and issue a return visit report.