An interesting example of anti-trust law s in a global world. deals are subject to the approval of all the anti-trust authorities involved, which often have different proprieties and different views of the appropriate level of competition. in this article – an alliance among the world’s three largest shipping companies was approved by the EU and the US but blocked by China. subsequently, it cannot move forward.
http://www.ft.com/intl/cms/s/0/a9a188be-f60f-11e3-83d3-00144feabdc0.html#axzz351ib97Y8
It will be interesting to see how large multi nationals interact with the Chinese competition authorities going forward, given their increasing role in approving more and more mergers which have an impact on the country’s markets and consumers, in light of there ever increasing role in the global economy. While the Ministry of Commerce provided information in this case supporting their decision on how this tie up would have negative impacts on the marketplace, the doubts of observers will continue as to whether alternative factors/interests were at play in the decision – for instance, two of the largest Chinese shipping companies are part of larger state owned enterprises – making the Chinese government a more direct stakeholder in the deliberations.
Another noteworthy action of the Chinese anti-trust authorities involved their approval of the merger of mining companies Glenore and Xstrata, once the companies agreed to divest a large copper mine in Peru (it is certainly no secret what a large consumer of commidities the Chinese economy is). Interestingly, the combined Glencore-Xstrata later agreed to sell the mine to a Chinese led consortium.
-William Ott
Excellent comment William.
The Chinese government is notorious for politicizing economic policies, and your comment highlights that. It is known for using anti-trust policy as a form of ‘hidden’ protectionism (that is not, and of course could not, be out-lawed by the WTO). and the approval of Glencore-Xstrata merger appears to be another illustration of that.
Hi Bill:
I read this article and found it disturbing that a single country can derail a deal that three other countries have signed off on. It appears that there is no appeals process for the deal. How do you fight this obvious abuse of power by the Chinese?
David