Worldwide: China Gets Serious About Antitrust Enforcement

Earlier this month, the European antitrust watchdog announced that it signed a cooperation agreement with the Ministry of Commerce, China's merger review authority. In many of today's larger transactions, deals have a significant impact in both the European Union and in China. In the EU, the European Commission is the competent authority on merger control procedures for larger deals; its counterpart in China is MOFCOM. The announcement reflects MOFCOM's growing role in global enforcement, also reflected in recent merger decisions and its increasing focus on gun-jumping.

Since China's Anti-Monopoly Law became effective in 2008, MOFCOM has reviewed more than 1,000 transactions and quickly established itself as one of the major merger control enforcement authorities in the world. In the same time period, the EC reviewed about 1,693 different merger cases (through September 2015).

Today, MOFCOM has become increasingly important to parties seeking to execute global M&A transactions. For example, in June 2014, MOFCOM blocked the proposed P3 network shipping alliance between Denmark's AP Moller-Maersk, Switzerland's Mediterranean Shipping Co. and France's CMA CGM. This was MOFCOM's second prohibition decision, and the first time that MOFCOM had blocked a global foreign-to-foreign merger. The decision highlighted MOFCOM's confidence in charting its own course and willingness to diverge from positions taken by other major jurisdictions such as the EU and the U.S.

The above transaction was approved by a majority vote of the U.S. Federal Maritime Commission in March 2014, and in June 2014, the EC reportedly informed the P3 partners that it had decided not to open an antitrust investigation into P3. The alliance involved the world's three largest container shipping lines on the important Asia-Europe Trade — a strategic and profitable trade route both for China's exporters and container shipping lines — in a sector facing overcapacity issues and rising costs. It is, therefore, not surprising that it would face close scrutiny by MOFCOM. Nonetheless, the decision to prohibit the transaction outright came as a major surprise to many in the container liner shipping community, as both the EU and the U.S. had given P3 the green light.

MOFCOM's decision exhibited a willingness to carefully scrutinize foreign transactions that are likely to affect Chinese commerce and to chart its own course. It also set the stage for MOFCOM to take a seat at the global antitrust enforcement table, as does China's focus on gun-jumping. The EC-China cooperation framework is a step in that direction.

Jumping the Gun and Whistleblower Hotline — China is Getting Serious

Companies doing business and deals in China have to be very aware of the increased antitrust scrutiny and pressure China is putting on companies to file their transactions properly. In March 2014, MOFCOM issued a notice announcing that it will publish decisions going forward sanctioning companies that fail to file transaction notifications that meet the Chinese filing thresholds. The notice further provides a fax number to allow whistleblowers to report transactions allegedly infringing Chinese merger control rules to MOFCOM. These actions definitely have increased the risk for companies doing deals that have market impact in China.

To date, more than 40 companies have been fined and punished by MOFCOM and some of these cases, including the company names of the parties involved, have been published on MOFCOM's website.

On Sept. 29, 2015, MOFCOM published four gun-jumping administrative penalty decisions on its official website, imposing fines on six companies, including Microsoft, Bombardier and four Chinese companies: (1) Microsoft Corp. and BesTV New Media (failure to notify the setup of a joint venture); (2) Bombardier Transportation and Nanjing Puzhen Rolling Stock Works (failure to notify the setup of a joint venture); (3) Fujian Province Electronic Information (Group) (failure to notify the acquisition of shares); and (4) Shanghai Fosun Pharmaceutical Development (failure to notify the acquisition of shares).

Even though MOFCOM does not target only foreign companies in antitrust matters — the four fine decisions include four Chinese companies and two foreign companies — companies have to be aware not only of the increased antitrust scrutiny of MOFCOM, but also of other Chinese antitrust authorities. Beyond merger enforcement, the two other state authorities, the National Development and Reform Commission and the State Administration for Industry and Commerce, intensified their enforcement efforts in recent years quite aggressively. In China, MOFCOM is responsible for merger review, the NDRC enforces the rules against price-related infringements and SAIC is responsible for nonprice-related infringements. Besides Chinese companies, many foreign companies have been targeted and fined heavily by the NDRC and SAIC lately, and some of these initiatives have been criticized at the highest levels of the U.S. and other governments.

The EC-China Cooperation Framework — A Step Toward Closer Global Enforcement Coordination

The cooperation framework announced today contains practical guidance and creates a dedicated framework to strengthen cooperation and coordination between the EC and MOFCOM. The EC already concluded Terms of Reference of the EU-China Competition Policy Dialogue with MOFCOM in 2004, and it will continue to cooperate with MOFCOM on the basis of this agreement. In September 2012, the EC signed a memorandum of understanding with China's NDRC and SAIC, which created a dedicated framework to strengthen cooperation and coordination on antitrust matters between the EU and China. The cooperation agreement announced this month only relates to merger control reviews. The EC highlights that this framework will increase the efficiency of investigations and will reduce the burden on merging parties, in particular when authorities are able to share information and to discuss timetables at key stages of investigations. The guidance shall facilitate communication throughout the entire merger review procedure on issues of procedure and substance, including the definition of relevant markets, theories of harm, competitive impact assessments and remedies.

It remains to be seen how this new framework will be used in practice; for example, whether it proves helpful to the merging parties — or rather just to the authorities.

Read the article on Law360 here (with subscription).

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.

In association with
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.


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.