Description

Traditional merger control theory under competition law classifies mergers into horizontal and non-horizontal categories based on the competitive relationships among transaction parties and their expected competition impacts. Competition authorities primarily rely on the “coordinated effects” and “unilateral effects” to assess a merger’s potential competitive harm. With the rapid digitalization of the economy, however, tech giants and platform enterprises have launched successive merger waves. These transactions defy simplistic horizontal or vertical mergers: their businesses span markets that are either intricately interconnected or entirely unrelated. While such mergers may appear harmless in the short term—even seemingly procompetitive—they are strategically designed to build entirely new digital ecosystems over the long term. These transactions are known as ecosystem mergers. Rather than targeting specific assets with clearly identifiable commercial value, ecosystem mergers aim to construct digital ecosystems whose members share certain standards, functionalities, and data while remaining interconnected and mutually reinforcing. Such ecosystems exhibit strong complementarity, economies of scale, network effects, and self-learning capabilities. Once fully established, competition-law intervention becomes either too late or prohibitively costly. Unfortunately, systematic rules or theories of competitive harm are missing to review ecosystem mergers.

As a major antitrust jurisdiction globally, China has only recently recognized “ecosystem mergers” as a standalone concept in antimonopoly law (AML) scholarship, and academic attention remains conspicuously limited. Nevertheless, China’s vast digital market and powerful digital enterprises provide abundant cases and data for research. On the enforcement front, the Merger Guidelines acknowledge that ecosystem mergers may “facilitate the development and expansion of ecosystems”; in cases such as Huya/Douyu, Qualcomm/NXP,and Tencent/Ximalaya, the competition authority has also factored ecosystem-building effects into its analysis. Given the scale and dynamism of China’s digital market, research conducted from a Chinese regulatory perspective can make substantial contributions to tackling persistent theoretical and practical challenges confronting global antitrust communities, which in turn expands the global analytical toolkit and yields valuable theoretical findings.

This research addresses three core issues: First, can ecosystem mergers be recognized as an independent merger category under competition law, rather than merely an impacting factor in merger review? Second, what are the limitations and inapplicability of traditional analytical methods and evaluative tools when applied to the ecosystem merger reviews? Third, is a new theory of competitive harm necessary, or can existing theories be adapted to provide adequate assessment?