Research on Anti-Monopoly regulation of data merge in the era of data-driven competition

Abstract

ABSTRACT Data merge as a result of mergers between organizations that hold valuable data sets can create significant competitive advantage. The existing regime of Chinese merger control is based on turnover thresholds and might not be efficient for capturing data-driven mergers raising anti-competitive concerns. Also, the existing notion of relevant market definition and market power which form the backbone of the merger review might be of little use for assessing data-driven mergers. This paper analyses whether the Chinese lawmakers should introduce the transaction value-based thresholds to block data-driven mergers that might have serious anti-competitive consequence. Comparison is made with merger notification thresholds in Austria and Germany as they are the more active European member states when it comes to competition law enforcement in the data-driven era. Besides, both Austria and Germany have reformed their competition laws in 2017 to adapt the laws to the data-driven economy era. The new Austrian and German competition laws may well serve as inspiration for China. In addition, the paper also examines the definition of product market for data and what constitutes market power for that market. This paper argues that turnover-based thresholds can be inadequate to tackle competition law concerns due to data. Thus, transaction value-based threshold as an additional threshold of merger control would be a good option. The paper also argues that the existing notion of relevant market definition should be adjusted. Furthermore, the SAMR can no longer rely solely on market shares to evaluate market power. In this context, whether the data to be acquired and to what extent the said data can provide market power to the merged entities should be taken into account.