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Japanese Economy Industry Asks Competition Authorities to Adjust Merger Rules

Doyle, Barlow & Mazard PLLC

On June 14, the Nihon Keizai Shimbun reported that the Japanese Ministry of Economy, Trade and Industry (METI) had asked the Fair Trade Commission (FTC) to revise its criteria in approving corporate mergers to encourage firms to reorganize and boost their competitiveness. Under current rules, the FTC allows mergers to proceed if the domestic market share held by the firms after the deal is 35 percent or less, although market shares above this threshold are analyzed on a case-by-case basis.
METI is encouraging the FTC to raise this level to 50 percent. The FTC will reportedly consider abolishing the 35 percent limit and following the US model, under which approval criteria are based not solely on the share of the merged entity, but on the degree of market concentration of all top firms. The FTC will allow mergers to proceed even if it exceeds the 35 percent market share so long as it does not restrict competition.

Authored by

D. Sexton

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