Compulsory v. Voluntary Merger Notification Mechanism: Implications of China’s Enforcement for Young Competition Jurisdictions

The internationally dominant compulsory notification mechanism under merger control aims to remedy anti-competitive harm by blocking or conditionally approving mergers ex ante. However, such a mechanism is not free from disadvantages. As an alternative, the voluntary notification mechanism, though superficially producing fewer deterrence effects, is in effect no worse than the compulsory mechanism (CM), given its significantly less implementation costs. In order to examine which mechanism suits a given jurisdiction, it is necessary to evaluate the costs and benefits for the implementation of such a mechanism. The enforcement of the CM in China can be argued to present insufficient benefits and high costs, due to the extreme low proportion of blocked and conditional approved cases, as well as the unsatisfactory deterrence effect, and the significant constraints by implementing resources, in particular human capital. Such a particular situation in China implies that the voluntary mechanism (VM) might be advisable to be a more feasible option for young competition jurisdictions. Merger Control, Compulsory Notification, Voluntary Notification, Cost and Benefit Analysis, Young Antitrust Jurisdictions