Research On The Institution Of Concentration Of Undertakings In Data-driven Enterprises

With the rapid development of the digital economy and the frequent occurrence of Data-Driven Enterprises concentrations in recent years,the past enforcement practice shows that most of the M&As carried out by such operators do not need to be declared to the antitrust enforcement authorities beforehand because they do not meet the current reporting standards.However,past enforcement practice shows that most of the mergers and acquisitions carried out by such operators do not meet the current filing standards,and the operators neither need to take the initiative to declare to the antitrust enforcement authorities beforehand,nor do the antitrust enforcement authorities intervene actively,but produce significant anti-competitive effects after the completion of the concentration,and the regulatory loopholes of the current institution of concentration of undertakings cannot adjust the continuous development of digital enterprises.The regulatory loopholes of the current institution of concentration of undertakings cannot adjust the phenomenon of "strangulation" mergers and acquisitions by Data-Driven Enterprises to consolidate data resources,resulting in the rapid establishment of competitive advantages and market dominance by operators after the completion of the concentration,raising the market entry barrier,undermining consumer welfare and seriously damaging fair competition in the digital market.Therefore,the current institution of concentration of undertakings cannot effectively respond to the regulatory needs of the digital sector.First,in terms of the institution of concentration of undertakings analysis theory,the current institution of concentration of undertakings regime does not focus on the competitive attributes of data,leading antitrust enforcement authorities to generally ignore the significant impact of data factors on the effect of competition in the enforcement of law in individual cases.The traditional analysis theory of price factor as the main entry point is not sufficient to cope with the innovation and development of digital economy,resulting in the lack of supervision of the institution of concentration of undertakings in the field of digital economy;secondly,in terms of the declaration standard of the institution of concentration of undertakings,a large number of Data-Driven Enterprises often have low turnover due to their scale and asset status,and the turnover is not high according to the current declaration standard.The current reporting standards for such operators often fail to meet the reporting standards,but the completion of the concentration seriously excludes and restricts fair competition in the relevant market,making it difficult for the institution of concentration of undertakings to effectively protect the screening mechanism of fair competition in the market by regulating the concentration with potential competition threats beforehand;finally,in terms of the enforcement mechanism of operator concentration,the behavioral remedies are more favored by the antitrust enforcement authorities than the past.Finally,in terms of the enforcement mechanism of the institution of concentration of undertakings,the structural remedies favored by the antitrust enforcement authorities are more suitable for the supervision of Data-Driven Enterprise operators’ concentration.Although China’s antitrust legal system gives the enforcement agencies the right to intervene proactively when necessary,in terms of the enforcement effect in recent years,the frequency of exercising the right to intervene proactively is significantly insufficient,and the openness and transparency of the enforcement procedures need to be strengthened.To fill the regulatory loopholes in the current institution of concentration of undertakings for Data-Driven Enterprises,the improvement path of the institution of concentration of undertakings should not only reshape the operator analysis theory as soon as possible,include the data factor into the examination criteria and pay full attention to the competitive nature of data,but also urgently amend the current "turnover standard" as the dominant standard.There is also an urgent need to revise the current centralized filing standard,which is dominated by the "turnover standard," and introduce a "transaction value" standard to ensure that M&A activity by small and medium-sized data-driven companies is included in the scope of review when the turnover standard fails to apply.For large digital oligopolies,mandatory preconcentration reporting obligations and regular post-concentration reporting obligations could be imposed,if necessary.At the same time,the enforcement mechanism for the institution of concentration of undertakings should be optimized,recognizing the high suitability of behavioral remedies for M&A interactions in the digital sector,and the proactive intervention powers granted by the law to the antitrust enforcement agencies to ensure the openness and transparency of the standards of enforcement procedures,with a view to maximizing the effectiveness of the enforcement of the operator concentration regime.