Extraterritorial Effects of Chinese Competition Law: A Comparative View on Merger Policy

Abstract

Differences in the assessment standards and notification procedures of merger policy across jurisdictions impose substantial transaction costs on international business and commerce. In this chapter, the issue of the internationalization of merger policy will be discussed by focusing on the extraterritorial applications, conflicts, and solutions provided by three important antitrust jurisdictions—the US, EU and China. Empirical studies on merger decisions in the US, EU and China show that such differences may come from the higher, or lower standard in the analysis of merger effects, and the different priorities of competition goals by the antitrust authority. An international convergence in merger policy may face challenges because jurisdictions may easily incorporate non-economic goals, such as protecting domestic enterprises, when making decisions on transnational mergers. Since the EU and the US proposed two distinct approaches on the internationalization of competition policy, and after the initiatives on creating a global antitrust legal framework failed, today’s antitrust world relies on bilateral agreements and multilateral cooperation through transnational networks. Technical assistance, experts’ working groups, and the use of “best practice” recommendations provide useful resources for antitrust agencies’ to enhance mutual learning. A global convergence in merger policy, although it is difficult from the view of agreeing on one single text of global antitrust law, might be gradually achieved through the efforts by antitrust agencies across jurisdictions by improving their capacity, applying similar analytical tools, and harmonizing assessment procedure rules.