Chapter 9: Proposals for rationalization
Despite an increasingly globalized economy and associated increase in transnational merger activity, geographically constrained national laws continue to govern transnational mergers. Increasing efforts at convergence in merger law and analysis in recent decades have been welcomed, but significant differences remain and the development of new merger regimes have increased uncertainty and compliance costs. Previous chapters have examined the benefits and limitations of the current approach to transnational merger regulation and have highlighted the attendant costs. Rationalization of the costs of multijurisdictional merger review is particularly important because mergers are subject to regulatory intervention regardless of the likelihood of the conduct infringing substantive law. It is, therefore, unsurprising that the need to devise mechanisms to ensure potentially anticompetitive transnational mergers are appropriately scrutinized while minimizing administrative burdens, has been identified as one of the major issues confronting competition agencies. It is clear that, despite improvements in convergence and cooperative endeavours, the current system of applying national merger laws to transnational activity is sub-optimal from a global welfare perspective. The multiplicity of review processes results in over-regulation, duplication of process, increased delay and increased risk of Type I errors and divergent outcomes which, while rare, increase uncertainty and can strain the trade relations between the countries involved. It also significantly increases the cost for merging parties and regulators, a pattern likely to continue as markets expand beyond the confines of national borders.
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