Guidelines for Handling Merger Application available; resulting enterprise with over 50% market share likely to be denied
E030314Y4 Apr. 2003（E43）
The Fair Trade Commission passed on March 13 a draft bill titled "Guidelines for Handling Merger Application", which will be made public next week pursuant to the Administrative Procedure Act. A public hearing therefor will be convened in April for public opinions.
According to FTC, the definition of merger in paragraph 1 of Article 6 of the Fair Trade Law include circumstances where an enterprise holds or acquires another enterprise's shares or capital contributions reaching more than one-third of the voting shares or total capital of that enterprise, or is assigned by or leases from another enterprise the whole or major part of business or properties. According to the Law, merger application shall be filed to FTC, which will decide whether to prohibit a merger pursuant to paragraph 1 of Article 12 of the Law. However, the abstractness of paragraph 1 of Article 12 of the Law often leaves enterprises puzzled about why their merger application is denied.
The said draft bill specifies that FTC should follow the following procedure when examining merger applications. First, determine the markets affected by the merger, and then evaluate the market power of the resulting enterprise. As for application for merger that might result in restraint on competition, FTC should make an overall evaluation, taking into consideration the "overall economic benefit of the merger" and the "disadvantages resulted from restraint on competition", before rendering its decision.
