Consumers and citizens: The future of the consumer welfare standard in global merger reviewClick here to read the full article online
This article provides a comparative framework for understanding the similarities and differences in merger review approaches in the United States and in China. In particular, the authors examine the role that factors beyond the consumer welfare standard play in merger reviews in these jurisdictions by investigating a number of recent enforcement actions. Although the two nations retain distinct approaches to merger review, it is increasingly the case that neither applies the generally predictable and narrowly focused approach of maximizing consumer welfare that merging parties and their antitrust advisors have come to expect. Merging parties today face complex calculations that raise three questions. First, will enforcers review transactions on the basis of the consumer welfare standard, another competition standard, or a standard that is not concerned strictly with competitive effects at all? Second, will authorities apply the same standard to similar cases, or make ad hoc and arbitrary decisions? And third, how do these evolving standards shift strategic calculations in crafting a global merger defense? This article analyzes a series of concrete examples of merger review outcomes in China and the United States and then proposes a series of contractual measures parties may wish to consider when transactions implicate merger control proceedings in China or the United States.