Operating in a Black Box? A Comparative Assessment of Transparency Levels in Merger Control

[...]agency investigations typically are non-public, due to legal requirements to protect trade secret and other sensitive business information, and to enable enforcement staff to develop evidence and make enforcement decisions without public disclosure that may interfere with the investigative process. Since 2010, at least the International Chamber of Commerce, the OECD Competition Committee, the American Bar Association, and the International Competition Network have examined these issues.1 The discussion below focuses on merger enforcement and compares the relative transparency of the U.S., EU, and Chinese competition authorities. In this article, transparency in merger enforcement is defined as including three important components: - the amount of information issued publicly by antitrust agencies to describe general jurisdictional standards, enforcement priorities, analytical methods/standards used for substantive analysis of transactions, and administrative standards and procedures for pre-merger notification, preparing the notification, settlements, and remedies; - the level of information about a particular investigation that antitrust agencies share about the evidence that the agency has gathered with respect to the matter, and the agency's enforcement intentions and positions on the matter going forward; and - the amount of information issued publicly by antitrust agencies upon termination of an investigation to describe the rationale for the agency's decision (including the acceptance/rejection of any remedies). The Commission's Best Practice Guidelines includes a section that details the purpose and usual procedure for pre-notification discussions, in which parties are directed to provide a background memorandum on the transaction to begin discussions, followed by a draft of the notification (the Form CO).4 Although the discussions, rightly, remain confidential, and the Commission does not officially publish information on when pre-notification discussions with the parties began, the Commission does occasionally reach out to third parties during pre-notification with questionnaires and/or invitations to participate in phone calls and meetings with Commission staff to assist in the review. The Commission's Horizontal Merger Guidelines outline in significant detail the Commission's approach for analyzing market shares, concentration thresholds, competitive impact, buyer power, and efficiencies.5 This gives the parties to the transaction significan