Regulatory body SAMR is playing a big part in shaping competition policies and establishing itself as a responsible and proactive model under China's State Council
1. The establishment of SAMR and the determination of its responsibilities
On 17 March, 2018, the First Session of the Thirteenth National People's Congress adopted the State Council Institutional Reform Plan. According to the plan, the responsibilities of the State Administration for Industry and Commerce (SAIC); the General Administration of Quality Supervision, Inspection and Quarantine; the Food and Drug Administration, supervision and inspection of price and anti-monopoly law enforcement of the National Development and Reform Commission (NDRC); anti-monopoly law enforcement of concentrations between undertakings of the Ministry of Commerce (Mofcom) and the Office of Anti-monopoly Committee of the State Council shall be integrated and the State Administration for Market Regulation (SAMR) shall be established as a direct organ under the State Council. On 10 April, SAMR was formally established.
On 30 July, 2018, the Regulations on the functional allocation, internal institutions and staffing of the State Administration for Market Regulation were implemented, and the responsibilities and institutions of SAMR were formally determined.
2. The institutions of Competition Law Enforcement and responsibilities of SAMR
According to the Regulations, SAMR is given 17 responsibilities, of which the fourth is related to Competition Law Enforcement, namely being responsible for the unified enforcement of anti-monopoly law, coordinating the implementation of competition policies, guiding the implementation of the fair competition review system, conducting anti-monopoly review on the concentrations between undertakings, being responsible for anti-monopoly law enforcement, abuse of market dominance and abuse of administrative power to exclude and restrict competition, guiding enterprises to respond to anti-monopoly complaints abroad and undertaking the daily work of the Anti-Monopoly Committee of the State Council.
SAMR has 27 internal institutions. The anti-monopoly related duties have been consolidated to the Antimonopoly Bureau. Another internal law enforcement institution, the Price Supervision Inspection and Anti-Unfair Competition Bureau, has absorbed the former functions of Anti-unfair Competition Enforcement and price enforcement of SAIC and NDRC.
3. Competition Law Enforcement after the establishment of SAMR
On 8 May, 2018, SAMR issued a notice through the website of the former Anti-monopoly Bureau of Mofcom, announcing that since 14 May, the venue to receive and send relevant anti-monopoly legal documents for the notifications of concentrations between undertakings had been changed to the enterprise registration hall of SAMR. This indicates that the functions of the Anti-monopoly Bureau of Mofcom have been officially moved from its office building in the East Chang'an Avenue to the SAMR office building located in San Li He.
On 11 June, SAMR officially issued in its name Decisions No. 1 to 4 in 2018, imposing administrative penalties for the conduct of four towage companies in Shenzhen that had reached and implemented monopoly agreements.
On 25 July, SAMR issued its first review decision, which conditionally approved the merger between Luxottica Group S.p.A. and Essilor International.
4. Prediction of future competition law enforcement/litigation
The new Anti-monopoly Bureau combines the functions of merger review and anti-monopoly investigation and personnel previously handled by Mofcom, SAIC and the NDRC, respectively. This indicates that enterprises will face a competition law enforcement agency with more comprehensive authorities and experience. Since the establishment of SAMR, the Anti-monopoly Bureau's series of work shows that the pace of law enforcement has not stagnated, but is becoming more proactive.
In addition, since SAMR administers both the National Intellectual Property Administration and the State Drug Administration, it is foreseeable that the Anti-monopoly Bureau will receive stronger support from within SAMR in drafting relevant guidelines and enforcing on anti-monopoly of intellectual property, and in enforcing the laws in relevant industries.
Originally published in The Lawyer
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.