The Research On Antitrust Issues Of Vertical Merger

Merger is a common and important activity in market economy. The company may enhance its dominant market position after merger and results in monopoly behavior. So merger control has been the focus of the anti-monopoly law. Horizontal merger has developed mature theoretical explanation of anti-competitive effects and welfare effects in industrial organization theory. However, Vertical merger control is more complicated because of its relation to both upstream and downstream markets. On the one hand, vertical merger will transfer its monopoly power to other markets and result in foreclosure effects which will undermine the market competition. On the other hand, compared with horizontal merger, vertical merger can reduce transaction costs and eliminate multiple price increase which will enhance the economic efficiency. Therefore, vertical merger control needs a different antitrust analysis. Chinese merger control standards don’t differentiate between horizontal merger and vertical merger. We should pay more attention on it. This article analyzes the suitable steps and method of vertical merger control through economy models and then proposed several advices to China antitrust law.The main six parts are as follows:The first part will introduce the background and significance of the research. Based on the dynamic research in domestic and international, this part will determine the research content and method, as well as the innovations and shortcomings.The second part defines the concepts and introduce the theory.The third part is about the situation of antitrust investigation in China vertical merger, pointing out the main problems in policies and practice.The fourth part is to analyze the vertical merger control factors, which consist of the market definition, market power, safe harbor system, anti-competitive effects and efficiency in vertical merger. This part distinguishes vertical merger control and horizontal merger control by using a series of economic analysis methods and models to illustrate.The fifth part is to compare the US vertical merger control and EU vertical merger control. The US and EU have a long history about the antitrust law and complete content about merger control, which have well used the economic principles and models. It could be a reference for our China’s vertical merger control.The sixth part is about the application of the vertical merger control. This part reviews the status of legislation and law enforcement of merger control in China. It also analyzes the vertical merger case with confined approval- the vertical merger between Microsoft and Nokia.The last part is conclusions and suggestions, which summarize the conclusions and give related suggestions about the vertical merger control in China.