China’s Merger Control of Non-Horizontal Transactions: The Growing Role of Economic Analyses and Behavioral RemediesClick here to read the full article online
This article focuses on the evolution of China’s approach to non-horizontal merger cases and issues related to economic analyses and remedies that may set precedents or references for future proposed transactions. In its assessment of the competitive effects of horizontal and non-horizontal mergers, China’s State Administration for Market Regulation (SAMR) focuses on potential unilateral effects, coordinated effects, and foreclosure possibilities. When addressing anticompetitive concerns in mergers, SAMR tends to prefer behavioral remedies and imposes structural remedies in relatively few cases. The article reviews two recent cases that exemplify China’s approach to assessing the competitive effects of vertical or adjacent relationships. In the KLA-Tencor/Orbotech transaction, SAMR focused on potential anticompetitive effects that may arise from input foreclosure, particularly in the semiconductor industry. Meanwhile, in the HUYA/DouYu transaction, SAMR did not limit its analysis to horizontal overlap, but also highlighted concerns about market dominance from a vertical standpoint.