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In December 2025, China's State Administration for Market Regulation (SAMR) released the final Guidelines for the Review of Non-Horizontal Concentrations ("SAMR's Non-Horizontal Guidelines"). This follows the issuance of the final Guidelines for the Review of Horizontal Concentrations ("Horizontal Guidelines") published a year earlier, in December 2024. Both sets of guidelines complement other recent reforms to China's merger control regime, including higher filing thresholds and more streamlined procedures.
The implementation of these reforms and the publication of the guidelines underscore SAMR's continued commitment to enhancing transparency in merger reviews and offering clearer guidance to undertakings, legal practitioners, and competition authorities.
This article analyses SAMR's Non-Horizontal Guidelines and the European Commission's Guidelines on the Assessment of Non-Horizontal Mergers published in 2008 ("EC's Non-Horizontal Guidelines").
Detailed Focus on Non-Horizontal Cases
Similar to the EC's Non-Horizontal Guidelines, SAMR's Non-Horizontal Guidelines outline the approach to the assessment of non-horizontal concentrations, including vertical and conglomerate concentrations:
- Vertical concentrations refer to transactions where the undertakings involved operate at different levels of the same value chain, forming an 'upstream' and 'downstream' relationship. This relationship typically involves the downstream party purchasing goods or services from the upstream party, either as inputs for production or resale.
- Conglomerate concentrations refer to
transactions where neither a horizontal nor a vertical relationship
exists between the undertakings involved. This type of
concentration includes "pure" conglomerate
concentrations, i.e., concentrations between undertakings with no
business connection whatsoever. However, it also includes
concentrations where the parties have:
- adjacent relationships, i.e., where the goods provided by the undertakings share the same customer base and end-use. SAMR cites vendors of optical lenses and sunglasses as an example.
- complementary relationships, i.e., where the undertakings sell goods that not only share the same customer base and end-use, but are typically used together. SAMR cites vendors of optical lenses and glasses frames as an example.
Conglomerate transactions involving undertakings with adjacent and complementary relationships are more likely to raise tying and bundling concerns.
Clarifications on the Relevant Markets
SAMR's Non-Horizontal Guidelines further clarify how markets should be defined, depending on the type of the transaction at hand. A summary is shown in the table below.
| Transaction types | Undertakings subject to market definition | Scope and focus of relevant markets |
|---|---|---|
| Merger |
|
The relevant markets should be defined with a focus on whether there are horizontal, vertical, adjacent, or complementary relationships between the undertakings involved in the concentration. |
|
Acquisition of shares/assets; or Acquiring control or exerting decisive influence through contractual arrangements |
|
The relevant market should typically be defined starting from the business of the target operator or target assets, with a focus on whether there are horizontal, vertical, adjacent, or complementary relationships between the target and the undertaking acquiring control or exerting decisive influence. |
| For the above transactions, relevant markets should also be defined for business segments where the undertakings involved in the concentration have a revenue share exceeding 5% and a market share that may exceed 10%. | ||
| Formation of new joint venture |
|
The relevant market should be typically defined starting from the business that the joint venture intends to engage in, with a focus on whether there are horizontal, vertical, adjacent, or complementary relationships between the joint venture and the undertakings who will exercise control over the joint venture. |
SAMR's Non-Horizontal Guidelines also state that the regulator may, based on the circumstances of the concentration and the needs of the competitive analysis, leave the market definition open, aligning with established practice in several jurisdictions, including the European Union. This approach may be accepted when SAMR has conducted a thorough analysis of each potentially relevant market and determined that, even without reaching a definitive conclusion, the accuracy of the competitive assessment remains unaffected. This reflects SAMR's increasingly rigorous stance on market definition during ongoing filings. In practice, markets defined in an open-ended manner, often involve more complex and nuanced analysis than cases with more clearly defined markets.
Market Share Thresholds and Approach for Competition Analysis
Both SAMR and the EC's Non-Horizontal Guidelines outline a three-step approach to the assessment of whether a non-horizontal transaction is likely to eliminate or restrict competition in a relevant market. Both sets of guidelines assess whether the transaction:
- Gives the merged entity the ability to harm competition (e.g., by controlling key inputs or customer access).
- Creates incentives or motivation to act anti-competitively (e.g., by making foreclosure profitable).
- Results in actual harm to competition (e.g., reduced market entry, higher prices, less innovation).
The key difference is that SAMR's Non-Horizontal Guidelines introduce market share thresholds which act as presumptive indicators to help assess whether a merger may eliminate or restrict competition:
| Market Share Range | Presumption and Regulatory Response |
|---|---|
| >50% |
Presumed anti-competitive. SAMR will generally presume that the concentration has, or may have, the effect of eliminating or restricting competition, unless the parties can provide sufficient evidence to rebut this presumption. |
| 35%–50% |
Likely anti-competitive. SAMR tends to believe the concentration may harm competition, and will conduct a focused analysis. |
| 25%–35% |
Low probability of harm. SAMR generally considers that the likelihood of anti-competitive effects is low. However, it may still assess whether unilateral or co-ordinated effects may arise based on market conditions. |
| <25% |
Presumed not anti-competitive. SAMR will generally presume that the concentration does not have anti-competitive effects, unless specific risk factors are present, such as rapid expansion potential, cross-shareholding/senior management among competitors, consolidation of key assets or technologies, or past or current co-ordination in the market. |
SAMR's Non-Horizontal Guidelines further elaborate on the theories of harm applicable to vertical and conglomerate concentrations. Both unilateral and co-ordinated effects are typically considered in the competitive assessment of both types of transactions.
Co-ordinated effects can arise in both vertical and conglomerate concentrations when the transaction alters the structure of the market in a way that makes tacit co-ordination among remaining competitors easier. Co-ordinated effects can also occur in conglomerate transactions when the merger creates conditions that make rivals' pricing strategies more predictable and easier to align with. For example, if the merged firm operates across multiple markets, competitors may interact with it in several areas. This "multi-market contact", could discourage competition because retaliation could happen in more than one market. This increased interdependence can make tacit co-ordination among remaining competitors easier, even without explicit agreements.
Unilateral effects in vertical and conglomerate concentrations differ slightly. In the context of vertical concentrations, unilateral effects may arise when the merged entity gains the ability to impede competitors' access to essential inputs, information, or customer bases, thereby creating a foreclosure effect without requiring co-ordination with other market players. Unilateral effects could also result from the transaction, if an undertaking obtains access to new competitively sensitive information, such as production volumes or pricing strategies, which could then be used to eliminate or restrict competition in the relevant market.
For conglomerate concentrations, the nature of unilateral effects differs slightly. The merged entity may acquire both the ability and incentive to leverage its market power in one or more markets to influence competition in related markets. This can be achieved through practices such as tying or bundling, refusal to deal, reducing interoperability, or other forms of exclusionary conduct, potentially leading to foreclosure and reduced market access for competitors.
Platform Economy and Ecosystem Effects
A major innovation in SAMR's Non-Horizontal Guidelines is its explicit treatment of platform economies, which reflects China's growing and continuing regulatory focus on digital ecosystems and cross-market influence. In particular, the guidelines place emphasis on the issue of self-preferencing in vertical concentrations. This concern arises when the merged entity has both the ability and incentive to favour its own upstream or downstream business operations, thereby gaining a competitive edge. Such conduct may include:
- Accessing competitively sensitive information from upstream or downstream competitors; or
- Providing preferential treatment to its own business segments, such as through exclusive access, more favourable terms, or strategic integration.
Platform economies were not an issue when the EC's 2008 Guidelines were first published, but SAMR's Non-Horizontal Guidelines clearly recognise that merger reviews in this sector must go beyond focussing on direct competition or supply chain relationships – as platforms can exert market power through data control, interoperability, and ecosystem integration – even when the merging parties operate in different markets. Key risks identified by SAMR include:
- Data concentration: combining datasets across markets to gain competitive advantage in pricing or targeting.
- Interoperability restrictions: Limiting compatibility with rival products to raise switching costs.
- Self-preferencing: favouring its own upstream or downstream business operations (as described above).
- Ecosystem control: Using cross-market leverage to entrench dominance across multiple services (e.g. payments, logistics, retail).
These risks echo those raised by SAMR's Platform Economy Antitrust Guide released in February 2021, as well as the more recent Anti‑monopoly Compliance Guidelines for Internet Platforms (Consultation Draft), the Rules on Price Conduct of Internet Platforms and the Compliance Guide for Online Trading Platform Fees released in 2025 which signalled continued scrutiny of digital platforms.
By contrast, the EC's Non-Horizontal Guidelines, published in 2008, were drafted in a vastly different and economic and technological context. The current guidelines have no mention of risks to competition posed by the rise of digital platforms, and as the European Commission has implicitly acknowledged, are outdated for the reality of today's markets.
It is no surprise that in May 2025, the EC launched a comprehensive review of both its Horizontal Merger Guidelines and its Non-Horizontal Guidelines to modernise its framework. The EC's consultation papers highlight that digital platforms, data concentration, interoperability, and ecosystem effects are now central to competition analysis.
Conclusion:
SAMR's publication of its Non-Horizontal Guidelines demonstrates a sophisticated and modernised approach to merger control review, while also addressing the unique challenges posed by digital platforms. As China continues to refine its merger control framework, the Non-Horizontal Guidelines represent a significant step toward aligning domestic enforcement activities with international practice, particularly when coupled with the 2024 Horizontal Guidelines.
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.
