China: MOFCOM takes a major step towards a simplified merger control procedure by promulgating the Standards for Simple Cases

Last Updated: 9 March 2014
Article by Susan Ning, Hazel Yin and Zheng Ziqing

On February 11, 2014, China's Ministry of Commerce (MOFCOM) published the long-awaited Interim Provisions on the Standards for Simple Cases of Concentrations of Operators (the Provisions), which came into effect on February 12, 2014. The Provisions set forth the substantive criteria for determining which case may be treated as a simple case, yet the procedural rules are still missing. This article provides an analysis of the standards, discusses how the Provisions will change the current review process and explores the reasons for the lack of procedural rules.

Which case will qualify as a simple case?

According to the Provisions, cases meeting the below standards will be treated as simple cases:

  1. for horizontal mergers: in a same relevant market, the collective market share of all operators concerned in the concentration is less than 15%;
  2. for vertical mergers: the market share of each of the operators concerned in the concentration in each of the relevant upstream and downstream markets is less than 25%;
  3. for mergers that are neither horizontal nor vertical: the market share of each of the operators concerned in the concentration in each of the markets is less than 25%;
  4. for off-shore joint ventures: the off-shore joint venture does not engage in business operations in China;
  5. for acquisitions of off-shore target: the off-shore target does not engage in business operations in China; and
  6. for reduction of the number of existing controlling shareholders: the joint venture jointly controlled by two or more operators is controlled by one or more existing operators through the concentration.

Which case will disqualify as a simple case?

Cases meeting any of the abovementioned standards may nevertheless disqualify as simple cases under the following circumstances:

  1. in case of a change from joint to sole control, there is horizontal overlap between the previously jointly controlled entity and the operator to acquire sole control over the entity;
  2. the relevant market is difficult to define;
  3. the concentration may cause adverse impact on market entry or technology development;
  4. the concentration may cause adverse impact on consumers or other relevant operators;
  5. the concentration may cause adverse impact on national economic development; or
  6. other circumstances where competition may be adversely affected as determined by MOFCOM.

When can MOFCOM withdraw findings for simple cases?

In any of the following circumstance, MOFCOM can revoke the decision to treat a concentration as simple cases:

  1. the notifying party conceals important information, or provides false or misleading materials;
  2. a third party claims that the concentration has or may have the effect of elimination or restriction of competition, and can provide relevant evidence; or
  3. MOFCOM discovers material changes of the transaction or the competition status in the relevant market.

What is the difference with the Draft Provisions?

Back in April 2013, MOFCOM published the Draft Provisions to solicit comments from the public. Compared with the Draft Provisions, the Provisions didn't show significant changes but deleted the provision that MOFCOM will pursue the notifying parties' legal liabilities for concealing important information or providing false or misleading information.

Nevertheless, since such legal liabilities are provided under Article 52 of the PRC Anti-Monopoly Law (AML), MOFCOM is still entitled to apply Article 52 in case the notifying parties conceal information or provide fraudulent or misleading information in order for the case to be treated as a simple case. Under Article 52, the legal liabilities include a fine of less than RMB20,000 on individuals, and a fine of less than RMB200,000 on entities. In serious cases, the fine may reach RMB100,000 for individuals and RMB1,000,000 for entities.

What is the difference with the EU standards?

The Provisions adopted by MOFCOM are similar to the standards previously adopted in EU for simplified procedures before 2014, especially the market share thresholds for horizontal and vertical mergers.

Nevertheless, on January 2014, the EU reformed the simplified procedures and expanded the scope for the application of simplified procedures. Under the amended rules, the combined market share threshold for horizontal mergers is raised from 15% to 20%, the market share threshold for vertical mergers is raised from 25% to 30%. Besides, a concentration may now also qualify for simplified procedures where the combined market shares of all operators are between 20% and 50%, but the increase in market share due to the merger is small ( for example, the HHI delta is less than 150) 1.

How will the Provisions change the current merger control review process?

It is noteworthy that there is no procedural rule attached to this new regulation. In other word, the Provisions only contain the rules on how to identify simple cases, but without the rules on what a simplified procedure could be. Since MOFCOM is still not bound by any timeline in processing a simple case, currently it remains unclear to what extent the review period could be shortened with the promulgation of this new regulation.

We understand that there may be some practical reasons why procedure rules are still missing. For example, to determine whether a case may be treated as a simple case requires a substantive review, including determining the relevant market and verifying the market share data. However, under the current MOFCOM review process, a case will first go through a pre-acceptance process handled by the Consultation Division, which is mainly responsible for determining the completeness of the filing materials. Thus, in order to decide on whether a case is simple or not at the pre-acceptance stage, the case review divisions (i.e., the Legal Division and the Economic Division) will have to participate in the process. Otherwise, considering the limited administrative resources at the Consultation Division, conducting a substantive review at the pre-acceptance stage may further prolong the pre-acceptance period. Moreover, if the case review divisions do not participate in the preview process, it will be difficult for them to review and clear the case within a month after a case is officially accepted.

Therefore, to implement an efficient review process, the case review divisions may have to step in early in the process and further collaboration between the Consultation Division and the case review divisions may be necessary. This may fundamentally change the way the different divisions are currently functioning. Another way to solve this problem may require accumulation of enough "precedents" and the creation of a database so that MOFCOM can easily make reference to previous cases or industry data in the same market to make a decision.

What will be the next step?

It is speculated that at the next step, MOFCOM will promulgate the relevant procedural rules or guidelines for handling simple cases. It is also possible that for simple cases, MOFCOM may even narrow the scope of information required from the notifying parties.

In general, enactment of the Provisions sends a very positive signal demonstrating that MOFCOM has been striving to improve efficiency. In practice, even before the Provisions were promulgated, an increasing number of cases we handled were cleared by the end of Phase 1. We believe that the simplified procedure, once officially established, will substantially change the current review process, and will benefit companies doing transactions that require merger control clearance in China.


1For example, in a merger between X and Y, where X has a market share of 45% and Y has a market share of 5%, the pre-transaction HHI is 2402, and the post-transaction HHI is 2500, so the delta is only 98. In this case, the transaction would qualify for the simplified procedure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.