This month, a number of new directives in relation to control of concentration of business operations were issued by the Anti-monopoly Bureau of the Ministry of Commerce ("MOFCOM"), which were expected for a long time after the enactment of the Anti-monopoly Law. Meanwhile, the MOFCOM issued some draft guidelines in relation to definition of relevant market, review of concentrations below notification thresholds and other issues for public consultation as well.
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This month, a number of new directives in relation to control of concentration of business operations were issued by the Anti-monopoly Bureau of the Ministry of Commerce ("MOFCOM"), which were expected for a long time after the enactment of the Anti-monopoly Law. Meanwhile, the MOFCOM issued some draft guidelines in relation to definition of relevant market, review of concentrations below notification thresholds and other issues for public consultation as well.
Notification procedures and requirements
The Anti-monopoly Bureau of the MOFCOM, the competent authority for control of concentration in China, further clarified the procedures and requirements for the notification of concentrations of business operators under the Anti-monopoly Law (effective as of 1 August 2008) by promulgating two directives on its official website on 7 January 2009, i.e. the Directive on the Notification of Concentrations of Business Operators and the Directive on the Documents Required for the Notification of Concentrations of Business Operators (collectively "Directives")
The Directives address main issues, such as pre-notification consultation, required documents and confidentiality, to provide the public a clearer picture of the notification. To read a summary of the Directives, please click here.
The Directives broaden the scope of documents and extent of information required, which seem very burdensome for filing applicants. Meanwhile, the MOFCOM still has almost unlimited power to require the applicant to submit supplemental documents under the new Directives.
Definition of relevant market
The MOFCOM issued a draft guideline on the definition of relevant market on 7 January 2009 for public consultation till the end of January 2009. According to this draft guideline, the MOFCOM will adopt similar methodologies of market definition as those used in other jurisdictions, such EU.
Review of concentrations below notification thresholds
According to article 4 of the Rules on the Notification Thresholds for the Concentration of Business Operators ("Thresholds Rules"), the MOFCOM has discretionary powers to review a concentration which does not meet the notification thresholds provided in the Thresholds Rules if the MOFCOM finds that the concentration has or is possible to have the effect of eliminating or restricting competition on the basis of duly obtained evidence. On 19 January 2009, the MOFCOM issued a draft interim measure on collecting evidence on suspected concentrations of business operators below the notification thresholds for public consultation till 16 February 2009.
Investigations and sanctions against concentrations failing to be notified
To clarify the procedures and measures for investigations and sanctions against those concentrations of business operators which meet the notification thresholds but fail to be notified, the MOFCOM issued a draft interim measure on this on 19 January 2009 for public consultation till 16 February 2009.
Other issues
On 20 January 2009, the MOFCOM also issued the draft Interim Measures for Notification of Concentrations of Business Operators and Interim Measures for Review of Concentrations of Business Operators on its official website for public consultation till 16 February 2009. If these two draft interim measures are promulgated, some unclear issues, such as the definition of "control", calculation of turnover, public hearing and ancillary conditions, will be clarified.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 27/01/2009.
