On target?

After five years, Zhan Hao zeroes in on the effectiveness of the Anti-Monopoly Law and antitrust enforcement in China

Experts think that rigorous enforcement marked 2013 as a milestone of the Chinese antitrust regime, even though the Anti-Monopoly Law (AML) has been in effect for five years. Given the reality that the AML is playing a more important role, business operators, lawyers and other stakeholders at home and abroad feel it necessary to analyse the trend of antitrust enforcement in China and assess foreseeable risks. The AML consists of three pillars: merger control, monopolistic agreement and abuse of market dominance.

Merger control

There are three antitrust enforcement agencies in China, namely the Ministry of Commerce (MOFCOM), the National Development and Reform Commission (NDRC), and the State Administration for Industry and Commerce (SAIC). As the only authority in charge of merger review, MOFCOM probably is the busiest among the three.

Up to the fourth quarter of 2013, MOFCOM had completed 749 pre-merger notification cases, of which 672 were cleared without conditions, 20 were approved with remedies, and one was blocked.

Foreign-to-foreign transactions accounted for roughly 50% of the cases reviewed by MOFCOM in 2013, with domestic transactions only approximately 10%. These numbers suggest that deals between giant multinationals may reach the filing threshold more easily, and foreign companies are more concerned about compliance issues.

MOFCOM also remains active in rule-making. The ministry finished the drafting work of the Interim Provision on the Applicable Standards in Simple Cases of Concentrations in 2013 and issued it on 11 February 2014. It became effective from 12 February 2014. Although MOFCOM has clarified the criteria according to which a proposed deal may be treated as a “simple case”, the new rule does not touch on equally important procedural and treatment issues.

Zhan Hao is the managing partner at AnJie Law Firm