China: Comments On MOFCOM’s Criteria For Simple Cases Of Undertaking Concentrations

Last Updated: 23 September 2014
Article by Guanbin Xie and Yi Jin

On February 11, 2014, the Ministry of Commerce of the People's Republic of China ("MOFCOM") released Interim Rules of the Criteria for Simple Cases of Undertaking Concentrations (the "Interim Rules"), which has been effective as of 12 February, 2014.


The officially promulgated Interim Rules does not differ substantially from its previous draft for soliciting public opinions that was published on April 3, 2013 by MOFCOM. We list two major differences as below:

  1. The final version further specifies the conditions for recognizing simple cases involving conglomerate merger & acquisition in Article 2.3. The previous draft defined that 'undertakings participating in the concentration that have no upstream or downstream relationships and hold less than 25% shares in each market'. It should be literally interpreted that if undertakings participating in the concentration have no upstream or downstream relationships, even if one of them holds more than 25% shares in any market, the concentration cannot be considered as a simple case. The overbroad definition triggered controversies after the draft was published for soliciting opinions. In the officially promulgated version, this Article has been amended to be more precise and reasonable, that is, "the undertakings, which participate in the concentration but neither operate in the same relevant market nor have any upstream or downstream relationships, have less than 25% market shares in each relevant market related to the transaction."
  2. Article 5 in the draft is deleted for the reason that it is irrelevant to the determination criteria of simple cases. The removed Article 5 stipulates that 'any applicant that conceals material information or provides false or misleading information will be pursued for legal liability in accordance with Article 52 of the Anti-monopoly Law.' As it is but a restatement of Article 52 of Anti-monopoly Law, its removal does not affect MOFCOM's power to hold a notifying party liable for concealing information or providing false information according to the Anti-monopoly Law.


Article 2 of the Interim Rules specifies six kinds of concentrations that can be treated as simple cases, which are listed below:

  1. the same relevant market, all of the undertakings participating in the concentration have less than 15% market shares;
  2. where there is a upstream-downstream relationship among the undertakings participating in the concentration, the market shares of the undertakings in the upstream and the downstream markets are less than 25%;
  3. where the undertakings participating in the concentration neither operate in the same relevant market nor have any upstream-downstream relationships, the market shares of the undertakings in each market are less than 25%;
  4. where the undertakings participating in the concentration establish a joint venture outside China, that joint venture does not engage in any business activities within China;
  5. where the undertakings participating in the concentration acquire the equity interests or assets of an overseas entity, the overseas entity does not engage in any economic activities in China; and
  6. where the concentration involves a joint venture under the joint control of two or more undertakings, the joint venture will be controlled by one or more of the undertakings after the concentration.

These criteria are clearly described, and there should not be too much controversy regarding what cases are eligible for summary review in combination of the exceptions provided in Article 3. However, companies and lawyers involved in undertaking concentration filings are more concerned with procedural issues including acceptance of a simple case, timeframe of the simple case review, whether the materials required for review can be simplified, and whether the procedure of seeking external opinions can be avoided. The Interim Rules provides only criteria in determining simple cases, but does not further clarify the review procedures of simple cases.

In a press release relating to the development of anti-monopoly law enforcement in 2012, Mr. Shang Ming, Director of the Anti-monopoly Bureau of MOFCOM, introduced that "a simplified procedure may be adopted, with less consultation with other departments and less application documents required during the review, and thus the review period will be considerably shortened to 30 days or 20 days." Under the Anti-monopoly Law and the current review procedure, Phase 1 ofan undertaking concentration review procedure can take 30 days. We understand that before MOFCOM issues addtional rules on the procedure for simple cases, it may probably treat the review period of a simple case as that for completing the first phase. However, the Interim Rules still fails to give answers to whether the submission materials required will be simplified.


Article 3 of the Interim Rules stipulates that a case that meets the criteria in Article 2 will not be considered as a simple case if it falls under any of the following six circumstances:

  1. a joint venture under the joint control of two or more undertakings becomes controlled by one of the parties as a result of the concentration and the undertakings and the joint venture are competitors in the same relevant market;
  2. it is difficult to define the relevant markets in which the concentration of undertakings involves;
  3. the concentration of undertakings may have an adverse influence on market access or technological advancement;
  4. the concentration of undertakings may have an adverse impact on consumers and other undertakings;
  5. the concentration of undertakings may have an adverse impact on the national economic development; or
  6. other circumstances that may have an adverse impact on market competition in the opinion of MOFCOM.

In the above mentioned circumstances, except for item 1 which gives a relatively clear and objective standard, items 2 to 6 adopt subjective standards. It is not hard to see that MOFCOM will be highly discretional in determining simple cases. Since the Interim Rules does not clarify the procedure for determining a simple case, and in view of the fact that the aforesaid circumstances all involve substantial issues of undertaking concentration (such as factors like the definition of a relevant market and market access), we believe that, taking into consideration of Article 4, MOCFOM may probably permit a summary procedure for a simple case at the same time when it decides to accept the case. In the current practice, due to the serious lack of examiners handling cases, a pre-acceptance investigation generally takes rather long time. While the Anti-monopoly Law only specifies the deadline of the period after the case is accepted, the pre-acceptance period usually takes more time than the first phase review. It remains to be seen whether this pre-acceptance period will be further prolonged after the implementation of the Interim Rules, since additional decision on the summary procedure for a simple case will also be made in this period.


Article 4 of the Interim Rules lists three circumstances where MOFCOM may revoke the recognition of a simple case:

  1. the notifying party conceals important information or provides false or misleading information;
  2. a third party claims that the concentration of undertakings has or may have the effect of eliminating or restricting competition and provides relevant evidence; or
  3. MOFCOM finds that there is a material change in the transaction for concentration or the competition in the relevant market.

In the course of seeking public opinions for the previous draft of the Interim Rules, some enterprises brought forth their concerns on predictability of MOFCOM's decisions and on potential financial losses in case that after MOFCOM determines a case as a simple case and the business undertakings set up a transaction schedule according to the expected timeline, MOFCOM revokes its simple case decision to resume the normal procedure for the same case. We believe that MOFCOM's revocation should be subject to great limitation under Article 4 after it has already determined to apply such summary review to a simple case and MOFCOM should also bear the burden of proof. Of the three circumstances in Article 4, with the exception of item 2 where evidence is provided by a third party, it takes the initiative of MOFCOM to find evidence in circumstances of items 1 and 3. It is a rather high requirement for MOFCOM's law enforceability, however. We likely to believe that after a case is determined as a simple case, MOFCOM would be reluctantly to revoke its decision.

However, one more issue shall draw our attention. In the second circumstance of Article 4 where the recognition of a simple case shall be revoked, it requires a third party to produce relevant evidence to prove that the concentration of undertakings has or may have the effect of excluding or limiting competition. At present, as part of MOFCOM's efforts to improve antitrust law enforcement transparency, names of unconditionally approved transactions and more detailed information of conditionally approved transactions are published quarterly. But such a release is made after the cases are concluded, which means that in MOFCOM's current practice, a third party has no way to be aware of the ongoing applications for undertaking concentration and therefore will not be able to bring up oppositions. It means that for the seriousness of the simple case review procedure and credibility of MOFCOM, transparency of the undertaking concentration review should be further improved. It is necessary that MOFCOM disclose applications for undertakings concentration which are still in the pre-acceptance stage, at least it shall disclose those concentrations that are likely to be treated as simple cases. Information to be disclosed should at least include transaction overview, the relevant product market and territorial market, and the grounds based on which MOFCOM decides a case to be a simple one.

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”

Mondaq Advice Centre (MACs)
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.


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.