Thursday, September 19, 2013
Devising Non-Unitary Merger Threshold, and Tackling Prejudices and Public Interest in Competition Policy
Posted by D. Daniel Sokol
Vikas Kathuria, Jindal Global Law School is Devising Non-Unitary Merger Threshold, and Tackling Prejudices and Public Interest in Competition Policy.
ABSTRACT: Choosing a non-unitary merger threshold system is not common for competition regimes. Consequently, less attention has been devoted to this practice by the anti-trust scholarship to trace its validity, viability and consequences. This paper takes the recommendations of the Arun Maira committee to reduce merger threshold in the Indian pharmaceutical sector as a starting point to set out the criteria to choose non-unitary threshold followed by suggestions and precautions. Discussing the prejudices in policy circles against mergers and acquisitions by MNCs of Indian pharmaceutical companies it is explained how such prejudices, especially in young competition regimes, may result in blocking potentially beneficial mergers as well. Similarly, the adjudication of various social and political objectives through competition policy has rightly troubled the proponents of efficiency in merger scrutiny. This paper, however, takes a realistic approach and treads a middle path between efficiency considerations and obligations of welfare democratic state while suggesting solutions. The need for holistic competition policy is also emphasized to realize the full benefits of competition. The policy prescriptions and suggestions made in this paper are particularly beneficial for young competition regimes in developing countries.