Anti-Monopoly Review of Mergers in the Digital Economy – A Comparative Perspective of China and the EU
Summary of research
In the digital economy, acquirers are no longer attracted by the balance sheet of their targets, but by their consumer data, technologies or potential to grow into competitors. The current turnover-based notification in both China and the European Union (‘EU’) cannot systematically screen these problematic mergers because these mergers often involve companies with little to negative turnovers. Instead, a transaction-value-based notification threshold could help solve the problem.
Data is not new to the digital economy. Nevertheless, it has revolutionized how today’s economy runs. Big data has raised questions for merger control. These questions include but are not limited to: (a) whether a data relevant market should be defined? (b) whether new data-related theories of harm should be introduced, considering combination of data could bring competition advantage? (c) should the competition authority consider data privacy in merger control? (d) whether market entry and expansion barriers would be decreased if the competition authorities enforced a data access remedy?
By October 2020, the Chinese competition authority has not completed any review of merger from the perspective of data. This lack of review has led to allowing mergers that can harm consumers in China. Even if the European Commission (‘Commission’) has tried to analyze data-related competition concern in merger control, it did not dig deep enough. The Commission overlooked the competition advantage that data combination can create through network effects of the incumbent established ‘ecosystem’. Both jurisdictions should introduce new data-related theories of harm. These theories of harm could ensure that market entry remains accessible.
Digital mergers also raise consumers data control issues (i.e. privacy) because a merged entity can now combine the data from the previously distinct entities. On the one hand, the Chinese competition authority has not investigated any case from the angle of data privacy. On the other hand, the Commission seemed to equal data privacy with whether an undertaking would use consumer data to post personalized advertisement. In the EU, the General Data Protection Regulation (‘GDPR’) has strengthened consumer control over their data; but the GDPR may not provide sufficient protection when mergers are involved.
This dissertation investigates these challenges that the digital economy creates for merger control in China and the EU. These challenges arose out of gaps in the legislation and enforcement. This dissertation discusses how to fill these gaps.
Yajie Gao (‘Yajie’) is a PhD candidate from Centre for Commercial Law Studies, Queen Mary, University of London. Yajie has participated in research projects organized by the Chinese competition authorities under direction of Prof. Wei Han. Yajie received her Bachelor of Law and Bachelor of Economics (Finance) degrees from East China University of Political Science and Law, China (‘ECUPL’) in 2013, and her Master of Law degrees from Ghent University, Belgium in 2015 and ECUPL in 2016 respectively.
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- Co-author (with Wei Han as the first author), Enforcement of the AML in China’s Digital Economy – From Perspective of the Overall Regulatory Environment, CPI Antitrust Chronicle: China Issue, March 2020
- Co-author (with Wei Han as the first author), Challenges and Prospects for Merger Control in China in the Digital Economy, CPI Antitrust Chronicle, March 2019
- Co-author (with Wei Han and Ai Deng), Algorithmic Price Discrimination on Online Platforms and Antitrust Enforcement in China’s Digital Economy, the Antitrust Source, August 2018
- Co-author (with Wei Han as the first author), Promote Openness or Strengthen Protection? Application of Law to Data Competition in China, CPI Antitrust Chronicle, Spring 2018
- 高雅洁，并购对创新的影响：经济学框架与实证证据（译著），《创新在竞争法分析中的角色》（The Roles of Innovation in Competition Law Analysis）第二章，主编：Paul Nihoul、Pieter Van Cleynenbreugel，翻译：韩伟等，校对：黄晋、韩伟，法律出版社（即将出版）
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- 韩伟、高雅洁，《欧盟合并控制与创新》竞争政策简报，竞争政策研究，2019 年第 2期
- Independently finished the draft translation of the book ‘EU Merger Control – A Legal and Economic Analysis’ (Prof. Ioannis Kokkoris and Prof. Howard Shelanski, OUP Oxford, Jan. 2014) from English to Chinese, Law Press, January 2018
- Co-author (with Wei Han as the first author), Merger Control in China’s Digital Economy: Challenges and Prospects, ‘Chapter 2: Challenges to Emerging Countries’ of the book ‘Challenges to Assumptions in Competition Law’ (ASCOLA series), Michal S. Gal, etc. eds., Edgar Elgar, forthcoming
- Co-author (with Wei Han and Ai Deng), Challenges Brought by and Response to Algorithms: Perspective of China’s Anti-Monopoly Law, chapter of a book compiled by the Kyushu University, forthcoming
- Co-author (with Prof. Ioannis Kokkoris and Prof. Spyros Maniatis), Introduction to IP and Anti-Monopoly Legislation and Practice in China, Chapter 1 of the book ‘Competition Law and Intellectual Property in China’, OUP Oxford, January 2019
- Co-author (with Prof. Xiaoye Wang as the first author), SEPs and Competition Law: From the Perspective Case Huawei v. IDC, Chapter 7 of the book ‘Competition Law and Intellectual Property in China’, OUP Oxford, January 2019
- Attended the ‘15th ASCOLA (Virtual) Conference’ (25-27 June 2020) and presented paper Enforcement of the AML in China's Digital Economy - From Perspective of the Overall Regulatory Environment in Panel VI
- Attended the ‘Multidisciplinary Perspectives on Algorithms: Regulation, Governance, Markets’ conference organized by the Kyushu University (21-23 Nov. 2019) and presented paper Challenges Brought by and Response to Algorithmic Collusion: China’s Perspective
- Attended the ‘14th ASCOLA Conference: Challenges to the Assumptions at the Basis of Competition Law’ (27-29 Jun. 2019) and presented paper Merger Control in China’s Digital Economy: Challenges and Prospects
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- Support (Author: Prof. Dr. Malik R. Dahlan), Dispute Regulation in the Institutional Development of the Asian Infrastructure Investment Bank: Establishing the Normative Legal Implications of the Belt and Road Initiative, AIIB Yearbook of International Law 2019