MERGER CONTROL REGIME IN MALAYSIA: PAST, PRESENT AND WAY FORWARD

In recent years, regulators and politicians have raised questions about whether merger control is “fit for purpose” in the modern economy, and in particular about whether the consumer welfare standard remains the appropriate lens through which to assess transactions, or whether merger control should consider the potential impact of a transaction on broader public interest (PI) objectives, such as employment, the environment, data privacy, national security, or industrial or trade policy. Many merger control regimes globally already include a public interest component, and in thinking about whether it would be reasonable or appropriate to add or strengthen the PI component of a merger control regime, it may be helpful to look at regimes that already include a PI component to consider the ways in which this may be structured and whether these standards are likely to be successful in achieving PI aims. This piece surveys the existing merger control regimes with a PI component to identify lessons that may be useful for jurisdictions considering whether and how to expand a merger control regime to include PI.

This paper examines the similarities and differences between the European and Chinese merger control systems, thereby considering the decision-making practice of the responsible competition authorities in China and the EU. Merger control is an important economic policy instrument both in China and in the EU. Traditionally, merger control essentially serves the purpose of preventing unwanted monopolies and other structural impairments of competition. In the EU, merger control is an important instrument of strengthening competition and the market economy in the inner-European market. Given that China considers itself to be a socialist country, the fact that China also has introduced a merger control system that largely meets international standards is remarkable. In a socialist country, the economic system is usually a planned economy instead of a market economy. Competition does not play a comparable role. Nevertheless, China created a merger control regime which was strongly influenced by European merger control in 2008. In many instances, even the same terminology was incorporated into the provisions. European merger control thus served as a model for the creation of Chinese merger control. Despite these similarities, there are also significant differences between European and Chinese merger control. These special features lie, in particular, in the consideration and weighting of non-competitive factors, such as public interest or national economic development. The deviations are due to the functions and objectives of the Chinese merger control regime.

Merger control is one of the competition law tools. While competition authorities in EU act primarily on the basis of national legislation, European Commission controls mergers with EU dimension. The jurisdictional tests relate only to the economic size of the parties and do not depend on the market shares of the parties or substantive impact of the transaction, or on whether the concentration will have any effects within the state. Globalization increases the number of multijurisdictional mergers that are subject to control of several competition authorities within or outside the EU. Differences in merger control proceedings in such cases with regard to the timeframe, or the result of the proceeding, could have a negative impact on the economy in another country. Parties to the concentration could decide to neglect the merger notification due to the timeframe, or complications connected with approving of multijurisdictional merger in other countries with jurisdiction. Therefore, the national authorities’ effort to set in their legislation turnover criteria with local nexus could help to control concentrations with potential effect on competition in their country.

This chapter analyzes the emerging jurisprudence of Indian merger control regime in terms its nascent antitrust/competition law. Drawing upon the interdisciplinary methodology of law-and-economics, it explores the historical evolution of the merger control regime and the politics of corporate lobbying and its impact upon the Indian merger control regime. In this context, it also analyzes the underlying economics of the Indian merger control regime and the inherent contradictions emanating from the politics of corporate lobbying and the inchoate philosophy manifest through the precedents. The chapter indicates that the implementation of the merger control regime in India is a mess and currently exhibits kamikaze tendencies. India will take some time to work out the poor design of the merger control regime.

China has made strides in putting the Anti-Monopoly Law merger control regime to work, especially considering it has only been in force for about six years. Despite absorbing some basic ideals and methods employed by advanced jurisdictions into its legislation and enforcement, China’s horizontal merger analysis still has its own idiosyncratic features. This article examines relevant legislation and Ministry of Commerce’s analytical methods in practice. It reveals that there is a lack of comprehensive legal standards regarding competitive effects and a tendency towards over-reliance on structural presumptions. For China’s merger control to become more effective, it is critical to make strong use of available economic techniques and to resolve the possible tension between competition policy and industrial policy. Cooperation with other mature enforcers will also play an important role in improving the effectiveness of the young merger control regime.

Merger control regimes in various jurisdictions—especially in Africa—feature non-competition objectives in addition to conventional goals, such as the maintenance or promotion of competition. Such ‘public interest’ objectives—including the promotion of employment, small business and particular industries—create special challenges for competition authorities. Furthermore, the broad definition of, and complexity that are associated with, non-competition objectives may increase uncertainty about merger control. We study the systematic impact of public interest concerns on South African merger decisions, in terms of the duration of adjudication and consistency over time. Our results suggest that the adjudication of mergers that feature public interest concerns take longer. More important, these cases have a higher probability of having conditions that are imposed for approval, and this has been increasing steadily over the past decade. This indicates more aggressive merger control and raises policy questions about the consistency—and hence predictability—of South African merger decisions.

This book analyzes the specifics of corporate governance of China’s State Owned Enterprises (SOEs) and their assessment under EU merger control, which is reflected in the EU Commission’s screening of the notified economic concentrations. Guided by the going global policy and the Belt and Road Initiative, Chinese SOEs have expanded their global presence considerably. Driven by the need to acquire cutting edge technologies and other industrial policy considerations, Chinese SOEs have engaged in a series of corporate acquisitions in Europe. The main objective of this book is to demonstrate the conceptual and regulatory challenges of applying traditional merger assessment tools in cases involving Chinese SOEs due to the specifics in their corporate governance and the regulatory framework under which they operate in China. The book also explores the connection between the challenges experienced by the merger control regimes in the EU and the recent introduction of the EU foreign direct investment screening framework followed by a proposal concerning foreign subsidies. The book will be a useful guide for academics and researchers in the fields of law, international relations, political science, and political economy; legal practitioners dealing with cross-border mergers and acquisitions; national competition authorities and other public bodies carrying out merger control; policy makers, government officials, and diplomats in China and the EU engaged in bilateral economic relations.

[Purpose] The paper is an attempt by the authors to evaluate the feasibility of applicability of existing competition law framework to the growing platform economies and the resultant implications of personal data being collected by such entities. [Methodology/approach/design] The present research is doctrinal in nature and the authors have adopted a comparative-analytical research methodology for evaluating the research questions. For the purpose of brevity, the authors have identified three research questions which shall form the basis of the research. Firstly, what is the inter-relation between the growing platform economy and merger control regime of a country. Secondly, what the possible avenues of concerns that may arise due to collection of personal data. Lastly, what are the possible enforcement challenges that would hampering the applicability of existing competition regimes to the digital platforms. The authors have considered the jurisdictions of EU and India as the geographical scope for the research, whereas, the subject-matter scope of the present research is limited only to the facets of interaction between the merger control regime and the abusive conduct of a dominant enterprise in the arena of digital markets. [Findings] The authors have made the following observations upon the conclusion of the study. First of all, the use and access of this data after the merger with companies with low turnover confer the acquiring enterprise a market power by which it can have an edge over its competitors in the market which will ultimately harm the competition in the market. Second, the digital market is data-driven, hence, collection of copious amounts of data, places the big-tech players in a position of control, allowing them indulge in exclusionary and exploitative conduct. Third, the assessment basis of combinations, more specifically in cases of data-driven mergers within the competition law needs a serious re-assessment, so as to include monetary value of data within the scope of assessment, as it is primary asset in such cases. [Practical implications] The importance of this research lies in the acknowledgement accorded the issue and the existing loopholes with the current merger control framework concerning data-driven mergers. Hence, the assessment criteria provided within the paper for the data-driven mergers would effectively serve as a foundational study for the further evolution and development of a specific and concrete framework for regulating data-driven mergers.

The US and the EC (European Community) are the most vigorous and influential competition law enforcement jurisdictions. Mergers consummated by firms competing in global markets are likely to fall within the jurisdiction of the US and/or the EC. It is therefore advisable to examine the most prominent aspects of the merger control laws of these jurisdictions and the approaches followed by their competition authorities. The EC/US bilateral cooperation has been quite a successful venture since its inception; nonetheless it failed to prevent the EC and US from having divergent views on the legality of the same merger operations on two different occasions. The chapter describes and compares the main features of the institutional frameworks and procedural rules of the EC and US merger control regimes. EC Regulation 139/2004 also strengthens the investigative powers of the Commission, which now can obtain information by simple request or by decision.Keywords: competition law; EC merger control law; European Community (EC)/US bilateral cooperation; institutional framework; US merger control law

Competition authorities primarily make use of two types of remedies, namely, “structural” and “behavioural,” or a combination of the two1, before clearing mergers that are likely to cause substantial harm to competition. Of these, structural remedies have been the predominant choice. However, of late, in the wake of the digital revolution and greater emphasis on designing remedies on a case-by-case basis, behavioural remedies have witnessed increased use. To this end, this paper seeks to address the role of behavioural solutions in the oligopolistic market structure under Indian competition law, with a focus on the merger control regime. It also intends to understand and critically analyse the literature on the problem of oligopolistic markets and the approach adopted with respect to remedies employed by the competition authorities of various jurisdictions (including the European Union (EU), the United States of America (USA), Canada, South Korea, Brazil, and India) to address the problem. Furthermore, the paper aims to examine the scope and limitations of behavioural remedies and their potential role in the conditional clearance of mergers. We use the number and nature of merger control investigations in the aforementioned jurisdictions in which behavioural remedies were adopted during 2015–19 to examine the conditions under which these remedies were used. The findings indicate that there is no straitjacket rule in the design and implementation of remedies employed while assessing the potential competition harm of mergers. The incidence of the implementation of behavioural remedies varies according to, inter alia, the nature of the concerned industry, the nature of competition harm (unilateral/coordinated, vertical/horizontal concerns), and the specific facts of the case.

Uber-Grab’s merger had attracted antitrust scrutiny by competition authorities in Southeast-Asia. The merger between the two had created a large giant company that provides various services through a platform such as ridesharing and food delivery services. According to the deal, Grab will take over Uber’s assets (ridesharing and food delivery service), and in return, Uber will take a 27.5 percent stake in Grab. Although Grab claimed that the merger would create a cost-efficient platform in Southeast Asia and put it in a better position to serve consumers, there was a genuine concern that the merger will reduce competition in the market and provide incentives to Grab to engage in anti-competitive behaviour such as increasing the price of its services. This article aims to analyse how different countries in Southeast Asia responded to the Uber-Grab’s merger and measures taken to address competitive concerns ex-ante and ex-post-merger. Unlike other competition jurisdictions in Southeast-Asia, the Malaysia Competition Act 2010 contains no merger control provision, which empowers the Malaysian competition authority to block any merger that has the effect of substantially lessening competition. The studies on how other countries evaluated the Uber-Grab merger could assist Malaysia’s competition authority to regulate the future behaviour of the big digital platform in the Malaysian market. This article was written based on research that relies on both primary and secondary sources. Primary sources include statutory provisions on competition, decision, proposed decision, interim measures, and others. while secondary sources include journal articles, news, internet resources, and others. The article also adopts a comparative approach in order to analyse the approaches and measures taken by the various merger control regimes in Southeast Asia in dealing with the Uber-Grab’s merger.

Nowadays, merger control predominantly relies upon a strict analysis of the effects from merger and acquisitions on effective competition. However, there is scope for so-called public interest considerations in several European merger control regimes and recently a number of European politicians have called for more elbowroom for non-competition-oriented interventions into merger control. For instance, they did so in the context of the prohibition of the Siemens-Alstommerger and the upcoming industrial policy discussion about European Champions. Since the social welfare effects of competitive markets present an important public interest in itself, additional public interest considerations justifying an intervention need to be non-market in the sense that these goals stand in conflict with competition. However, a trade-off between effective competition and public interest, i.e. public interests that are better served through market power then through effective competition, is a rare phenomenon. This paper gives an overview of public interest considerations in the merger policy of European Union member states and analyzes four jurisdictions in more detail. We find that the institutional designs how public interests considerations are included in the merger control regimes lack focus on non-market public interest considerations across the analyzed jurisdictions. Furthermore, there are relevant shortcomings regarding transparency and legal certainty. Moreover, our ex-pots analysis shows that the empirical record of past public interest-motivated interventions is questionable with only few interventions yielding the desired effects. Therefore, we suggest revising the public interest regulations in the respective merger control regulations by narrowing their focus to real non-market public interests and by levying decision power on less politically-influenced bodies.

International expansion of merger control swiftly followed the enactment of the European Merger Regulation in 1989. Today, more than 150 countries have a system of merger control, accounting for review of more than 11,000 transactions annually. The large majority of merger control regimes are ex ante and suspensory and rely on a significant lessening of competition substantive review test. However, jurisdictions’ individual particularities and inconsistencies in their merger control regimes create complexities for global mergers, contribute to costly, protracted review processes and lead to uncertainty and inefficiency. These risks undermining the numerous consumer benefits of globalised merger control and corroborates calls for more streamlined global merger review.

Critical observers state that current antitrust policies fall short of addressing the wider societal implications of a market economy, inter alia in merger control. The interests of employees in decent wages, merger impacts on the environment, or the pursuit of a governmental industrial policy are claimed to deserve recognition beyond the traditional consumer welfare paradigm. This article voices skepticism. Such postulates can jeopardize an important achievement: to have bestowed on consumers the mandate of being the ultimate sovereign over the outcomes of the competitive process. Antitrust agencies would become exposed to a plethora of irreconcilable societal expectations and rent seeking efforts. This would lead to an increased politicization of merger enforcement, and it would weaken competition as a design-principle for a market economy. This article claims that society at large is better served with a merger control regime that devotes itself to consumer welfare through competition as a mono-teleology.

Nowadays, merger control predominantly relies upon a strict analysis of the effects from merger and acquisitions on effective competition. However, there is scope for so-called public interest considerations in several European merger control regimes and recently a number of European politicians have called for more elbowroom for non-competition-oriented interventions into merger control. For instance, they did so in the context of the prohibition of the Siemens-Alstommerger and the upcoming industrial policy discussion about European Champions. Since the social welfare effects of competitive markets present an important public interest in itself, additional public interest considerations justifying an intervention need to be non-market in the sense that these goals stand in conflict with competition. However, a trade-off between effective competition and public interest, i.e. public interests that are better served through market power then through effective competition, is a rare phenomenon. This paper gives an overview of public interest considerations in the merger policy of European Union member states and analyzes four jurisdictions in more detail. We find that the institutional designs how public interests considerations are included in the merger control regimes lack focus on non-market public interest considerations across the analyzed jurisdictions. Furthermore, there are relevant shortcomings regarding transparency and legal certainty. Moreover, our ex-pots analysis shows that the empirical record of past public interest-motivated interventions is questionable with only few interventions yielding the desired effects. Therefore, we suggest revising the public interest regulations in the respective merger control regulations by narrowing their focus to real non-market public interests and by levying decision power on less politicallyinfluenced bodies.