This article examines the use of behavioral remedies in merger control in China, and contrasts it with the stance opposing conduct remedies in the U.S., UK, and other jurisdictions including Australia and Germany. It argues that acknowledgement of the benefits offered by behavioral remedies can eliminate a serious risk of over-enforcement, avoiding a chilling effect on even pro-competitive mergers and acquisitions (“M&As”). The nearly fifteen years’ experience of implementing behavioral remedies in China demonstrates that many common complaints about behavioral remedies may be overstated, including monitoring difficulties and ineffectiveness at remedying vertical or conglomerate concerns. As many agencies and regulators move away from the traditional “consumer welfare” standard to consider the impact of a transaction more holistically, China’s experience shows that behavioral remedies can be an important and useful tool for regulators to achieve a balance between protecting market competition and incentivizing, or at least not over-deterring, legitimate M&A activities.
By Andrew Foster & Cindy Lau[1]
In recent years, agencies and regulators responsible for merger control in the U.S., UK, and other jurisdictions (including Australia and Germany) have taken an increasingly hardline stance opposing the implementation of behavioral remedies to rectify competition concerns, even in cases without obvious anticompetitive red flags. While classi
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