Moderating Globalization: Is There a Role for Antitrust Law? A Comparison of the Relevance of Entry, Expansion and Imports in US and EU Merger Proceedings

This paper attempts to locate the issue of innovation and foreign entry, in particular new entrants from China, in recent US and EU merger decisions. In the first part, the paper examines to what extend US and EU authorities considered foreign entry in recent major merger decisions such as Bayer/Monsanto, Dow/DuPont and ChemChina/Syngenta. The outcome of this short analysis shows that the EU Commission has in recent years begun to accept the argument of foreign entry, in particular from China, as long as the market shares of the merging parties are not too high. The US has not explicitly discussed the question of foreign entry in the above-named decisions. However, in the case Whirlpool/Maytag the US authorities accepted, despite high market shares of the parties, the argument of foreign entry and approved the merger. With regards to innovation, entry into future product markets is not considered favourable to the merging parties by the EU Commission. ‘Innovation competition’ or early ‘pipeline products’ is rather used as an argument to demonstrate that the merging parties hold market power in product markets in the future. Based on the selected case law, the US authorities, by contrast, did recognize entry into future product markets as an argument in favour of the merging parties. In its second part, the paper looks at the pros and cons of forming ‘national champions’ and discusses competition law enforcement in light of the numerous and politically powerful Chinese state-owned enterprises (SOEs). Global competition/antitrust law and policy, foreign entry in merger decisions and China, innovation competition, entry criteria in US/EU mergers, climate change