Research UponN Anti-Monopoly Control Criteria Of European Union In M&A

Mergers between General Electronic and Honeywell, two US enterprises, failed due to objection from European Union in 2001, the reason lies in the failure of passing the competition review by European Union Commission. M&A is the result of increasing market competition. However, excessive M&A will also restrain competition in the market and lead to monopoly. Therefore, anti-monopoly control upon M&A is unavoidable duty of states to protect market competition environment. In the anti-monopoly control legal framework, anti-monopoly control criteria against M&A is of essential importance, which determines a M&A deal may pass competition review and be completed or not. Anti-monopoly control criteria includes definition to M&A, criteria upon M&A scale and evaluation of the deal's impact upon competition. The Council Regulation (EEC) No 4064/89 of 21 December 1989 on the Control of Concentrations between Undertakings promulgated by European Union in 1989 has provided the following: (I) definition to M&A deal; (II) M&A with community dimension will be subject to the Council Regulation and criteria for determining the community dimension; (III) only M&A that strengthening or creating dominant position and have significant impact upon the effective competition of the common market is incompatible to the common market and should be prohibited; (IV) notification and review procedure for M&A deal. After nearly 20 years practice, Council Regulation has been applied in reviewing over thousand M&A deals. The anti-monopoly control criteria established in long-term competition judicial practice is the core part of EU competition policy, which is objective, scientific, reasonable and systematic. This paper will try to research these criteria and make reference from EU's experience on the criteria to analyze how China should draft M&A anti-monopoly rules when facing the increasing M&A deals.