China's New Guidelines of the Assessment of the Effect of the Concentration of Business Operators on Competition 20 Currents: International Trade Law Journal 2011-2012

20 Currents: Int'l Trade L.J. 24 (2011-2012)
China's New Guidelines of the Assessment of the Effect of the Concentration of Business Operators on Competition

handle is hein.journals/curritlj20 and id is 26 raw text is: CHINA'S NEWSGUIDELINES ON THE ASSESSMENT OF
THE EFFECT OF THE CONCENTRATION OF
BUSINEss OPERATORS ON COMPETITION
MATTHEW 1. DANZIG
I 3k

1. INTRODUCTION
After more than fourteen years of drafting,
the People's Republic of China (China)
finally adopted the Anti-Monopoly Law
in August of 2007.' The Anti-Monopoly
Law has four primary sections: (1) the
prohibition of agreements unless exempted
(Chapter II: Monopoly Agreements);
(2) the prohibition of monopolistic
behaviors in abuse of market dominance
(Chapter III: Abuse of Dominant Market
Position); (3) the creation of a process
for reviewing mergers (Chapter IV:
Concentration of Undertakings); and (4)
the prohibition of abusing government
administrative power restraining competition
(Chapter V: Abuse of Administrative Power
to Eliminate or Restrict Competition).
Chapter IV of the Anti-Monopoly Law
applies to all concentrations, including (1) the
merger of business operators; (2) acquiring
control over other business operators by
virtue of acquiring their equities or assets;
or (3) acquiring control over other business
operators or possibility of exercising decisive
influence on other business operators by
virtue of contact or any other means.2

Previously, antitrust lawyers were primarily
concerned with antitrust enforcement of
the United States and Europe. However, as
China grows and becomes the third largest
antitrust jurisdiction after the United States
and European Union, the Anti-Monopoly
Law will have a significant impact on mergers
and acquisitions, including those that do not
take place in China.3
During the three years which the Anti-
Monopoly Law has been in force, the
Ministry of Commerce (MOFCOM) has
reviewed approximately 240 concentrations.4
Based on this experience, on August 29,
2011, the MOFCOM released the Interim
Provisions for the Assessment of the Effect
of the Concentration of Business Operators
on Competition (Interim Guidelines). The
new guidelines went into effect on September
5, 2011.6 This paper seeks to analyze the new
merger guidelines and evaluate previously

announced MOFCOM decisions in light of
the new Interim Guidelines.
II. ANTITRUST PLAYERS
A. INTRODUCTION
Three separate agencies have authority
to enforce the Anti-Monopoly Law: the
National Commission for Development and
Reform (NCDR); the State Administration
of Industry and Commerce (SAIC); and
the MOFCOM.' The NCDR is tasked with
supervising pricing related violations, the
SAIC will enforce and police monopoly
agreements and abuses of the monopoly
position, and the MOFCOM will supervise
concentrations.
B. MINISTRY OF COMMERCE
The MOFCOM is an administrative
organization established by the State Council
to set policy regarding foreign economic
relations and foreign and domestic trade.'
Although MOFCOM has the ultimate power
to supervise concentrations, MOFCOM
has given enforcement power to the Anti-
Monopoly Bureau (see infra Section II Part D).

CURR-ENTSINTER 2011

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