China: Chinese Antitrust Authorities Provide New Guidance For Merger Filings

The Anti-Monopoly Bureau ("AMB") of the Chinese Ministry of Commerce ("MOFCOM"), the Chinese government authority charged with reviewing antitrust notifications of M&A transactions, released guidelines on January 5, 2009 detailing the process for submitting antitrust filings in China and listing the information required for preparing such submissions (the "Filing Guidelines") as well as draft Guidelines on the Definition of the Relevant Market ("Relevant Market Guidelines"). 

While the process for filing and the information required for antitrust notifications remains largely consistent with applicable requirements and practice to date, the Filing Guidelines include some notable changes and provide greater detail regarding the topics parties are expected to address in the notification form.  The draft Relevant Market Guidelines are generally consistent with the economic approach used in other jurisdictions, such as the U.S. and EU, and provide greater transparency into the standards that the China authorities will use to assess the competitive effects of transactions.

Notable Provisions In The Filing Guidelines

  • Filings will require detailed information and analyses of relevant markets affected by the proposed concentration. 
  • Parties must submit internal or external analyses and reports that are "helpful" for evaluation of the concentration, such as feasibility studies, due diligence reports, industry development studies, and forecasts for the post-transaction businesses.  Given the breadth of documents potentially encompassed by this requirement, depending upon how this provision is enforced in practice, filing parties will need to be well prepared in advance to assemble the necessary materials. 
  • Parties are required to provide opinions on the proposed transaction of relevant interest groups, such as local governments and other competent authorities and social interest groups, and a forecast of the transaction's "social effects."  It is not clear how parties to a transaction will be able to secure these opinions in a timely fashion.
  • For transactions that implicate issues of national security, industrial policy, state-owned assets, and well-known trademarks, parties will need to address these issues in the notification form.
  • Filings must describe how increases in efficiencies resulting from the proposed transaction will affect the relevant market.
  • Notifications must analyze how the proposed transaction will affect the scale and competitiveness of parties in markets other than the relevant market. 

While the Filing Guidelines provide useful guidance to parties submitting an antitrust notification, it remains unclear how the new rules will be implemented.  Because the 30- day waiting period will not commence until the authorities in China accept the filing as complete, it is important for parties to reportable transactions in China to consult experienced legal counsel early in the transaction negotiations to obtain the latest information on the expectations of MOFCOM with respect to such notifications. 

Draft Market Definition Guidelines

In conjunction with the release of its guidelines on the documents and materials required for merger notification and guidance on its merger review process, the AMB also released for public comment draft Relevant Market Guidelines.  Similar to most merger review regimes worldwide, the definition of the relevant market is a key component of the AMB's merger review procedures.  The draft Relevant Market Guidelines are intended to provide guidance and enhance the transparency of how PRC merger regulation authorities, namely the AMB, will define the relevant market and enforce the AML. 

Largely consistent with practice in other major jurisdictions, the AMB's draft Relevant Market Guidelines define the relevant market for antitrust purposes in terms of two aspects – the relevant product market and the relevant geographic market.  The relevant product market consists of all products that are "close substitutes" for each other in the eyes of consumers, taking into account certain factors such as product characteristics, intended use, distribution channels, and prices of the products.  In examining the substitutability of products, the draft Relevant Market Guidelines look primarily at demand substitution (i.e., from the consumers' perspective) rather than supply substitution, although the draft Relevant Market Guidelines note that in certain cases, supply substitution considerations may be included in the analysis of the relevant product market.

The draft Relevant Market Guidelines define the relevant geographic market as being composed of the geographic areas where competition arises between these closely substitutable products.  Factors considered in defining the geographic market include transportation costs, trade barriers between regions, and local laws and regulations.

The draft Relevant Market Guidelines define the relevant market utilizing two methods of analysis.  First, the enforcement authorities will evaluate the relevant product and geographic market using demand substitution analysis (and supply substitution analysis when necessary).  This analysis will be based upon a review of the "characteristics, intended uses and prices of products."  If the scope of the relevant market is clear, the analysis ends.  In cases where the scope of the product and geographic market is not clear, the draft Relevant Market Guidelines provide for further analysis – utilizing the "hypothetical monopolist test" and related economic analysis.  The hypothetical monopolist test discussed in the draft Relevant Market Guidelines is very similar to an analytical approach used by many merger review regimes around the world, including in the U.S. (where it is commonly referred to as the "SSNIP" test).1

Once the relevant market is defined, the analysis under the AML continues, examining various key issues in merger analysis such as identifying competitors and potential competitors, determining market share and concentration of competitors, and analyzing the impact on competition in the relevant market. 

The issuance of the draft Relevant Market Guidelines is a helpful step for parties contemplating transactions that would be subject to AMB review as they provide insight into the AMB's current thinking on proper merger analysis.  It also indicates that the analysis of mergers in China likely will be conducted using the same general framework and tools used by antitrust enforcement authorities in other jurisdictions around the world.


1. Essentially, the test examines whether a hypothetical monopolist would profitably be able to increase the relevant product's price by a small percentage (5-10%) for a significant period (more than one year).  If consumers would switch to other products in response to this price increase, then those substitute products should be considered within the relevant market.  This analysis is repeated until the outer bounds of the relevant market are determined.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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 Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions