On December 4th and 5th, 2012, the first China Competition Policy Forum (the “Forum“) was held in China University of Political Science and Law. The Forum was sponsored by the expert advisory group of the Anti-monopoly Commission of the State Council. The Directors-General of the three enforcers under the Anti-Monopoly Law (the “AML“), i.e. the Ministry of Commerce (“MOFCOM“), the National Development and Reform Commission (“NDRC“) and the State Administration for Industry and Commerce (“SAIC“) attended the Forum and introduced the latest development of their AML enforcement activities.1
According to Director-General Shang Ming (尚明) of the Anti-Monopoly Bureau of MOFCOM, up to September 30, 2012, a total of 622 merger notification filings were received by MOFCOM, among which 562 were accepted and 510 were closed. Amongst the cases having been closed, only 1 case was rejected (i.e., Coca Cola’s acquisition of Hui Yuan) and 15 cases were cleared with conditions. Mr. Shang mentioned the publication of 458 unconditionally approved cases in November this year2, and indicated that MOFCOM would regularly summarize and release the unconditionally cleared cases in the future.
Director-General Xu Kunlin (许昆林) of the Price Supervision and Anti-monopoly Bureau of NDRC emphasized that NDRC was determined to further enhance the law enforcement against price-related monopolistic conducts. Mr. Xu also confirmed that the antitrust investigation into China Telecom and China Unicom had not been closed,3although he did not make it clear if NDRC officially suspended the proceedings upon the companies’ application. Recent news reports that the two companies are in the process of fulfilling their undertakings under NDRD’s supervision to improve performance in exchange of termination of the investigation. 4
Director-General Ren Airong (任爱荣) of the Anti-Monopoly and Anti-Unfair Competition Law Enforcement Bureau of SAIC introduced that up to the end of November 2012, SAIC had authorized 10 provincial Administrations for Industrial and Commercial to handle 17 antitrust cases, and 4 of them had been closed. That is to say, SAIC has accepted one more case since its last announcement on August 13th, 2012 during the International Seminar of the Frontiers of the Implementation of Anti-monopoly Law 5. In addition, Ms. Ren disclosed that 16 out of the 17 cases were in relation to cartel and only one case was concerned with abuse of dominant position. She emphasized that industry associations played a negative role by organizing all the 16 cartels that SAIC had investigated in thus far.
MOFCOM is only required to publish its decision on prohibiting a concentration or attaching restrictive conditions thereof. For NDRC and SAIC, no requirement of information publicity is imposed by the AML. Nevertheless, the three agencies are becoming more and more open about their enforcement activities. MOFCOM proactively published the unconditionally cleared cases on its official website and promised to continue publishing the information. NDRC and SAIC, on the other hand, make disclosure of the cases they have handled from time to time on various occasions. We believe that all stakeholders will benefit from the trend towards transparency of the agencies.
Another issue worth noting is industry associations’ active involvement in cartels as emphasized by Ms. Ren of SAIC. NDRC also treats this issue as a problem that calls for immediate solution. As far as we know, some lawsuits brought in the US are based on the allegation that the relevant industry associations organized export cartels aiming at price-fixing. Business operators should be more aware of the risk in participating in concerted actions organized or required by industry associations.
1 For the original Chinese news, please refer to: http://www.chinacourt.org/article/detail/2012/12/id/798654.shtmland http://news.jcrb.com/jxsw/201212/t20121204_1002636.html.
2For more details please refer to our earlier article on China Law Insight: China’s Ministry of Commerce Released List of Unconditionally Approved Notifications of Concentrations.
3The investigation was initiated in last April where the two state-owned companies were challenged for their employment of price discrimination between different Internet service providers (ISPs) in the Internet access market. The companies applied for suspension of investigation in December 2012 and undertook to take concrete measures to rectify their wrongdoings. For more details please refer to our earlier articles on China Law Insight: Earlier Rumor Confirmed: China Telecom and China Unicom under Antitrust Investigation, China Telecom and China Unicom Seek to Settle Antitrust Probe, NDRC Demands More Concrete Pledges from China Telecom, and Latest Development re NDRC’s Antitrust Investigation against China Telecom.
4 For the original Chinese news, please refer to: http://tech.huanqiu.com/comm/2012-12/3365374.html
5SAIC’s last announcement indicated that the total number was 16 cases. Please refer to the relevant article on China law Insight: http://www.chinalawinsight.com/2012/08/articles/corporate/antitrust-competition/chinese-antitrust-regulators-vow-to-increase-transparency/