12 Merger Control and its Impact on Innovation in China*

Subject(s):

Monopoly — Intellectual property rights (IPR) — Jurisdictions — Merger control

This chapter talks about the growing emphasis by competition authorities on the concept of innovation in merger control policy. Regulators traditionally focus their analysis on a transaction's effects on actual competition, potential competition, and even future competition. Despite the stochastic character of research and development efforts and, more broadly, the serendipitous nature of invention, regulators are now willing to move beyond the confines of this conventional framework and engage in a more uncertain analysis, in a long-term perspective, of the ability and incentives of merging players to reduce innovation and ultimately restrict competition. The chapter also notes the importance of innovation for China's industrial policy, and examines the legislative framework in which the Anti-Monopoly Bureau of China's Ministry of Commerce (MOFCOM) generally decides on cases and the role it plays in supporting innovation.