By: Susan Ning, Zheng Ziqing and Angie Ng

On 18 December 2010, Mr Shang Ming (Chief of the Antimonopoly Bureau, of the Ministry of Commerce or MOFCOM) delivered a speech at an academic conference entitled "International Symposium on Enforcement of China’s Anti-Monopoly Law in the New Economy" held at Beijing’s People’s University.

During Mr Shang’s speech, he revealed the following facts and figures about MOFCOM’s merger control regime:

On 18 December 2010, Mr Shang Ming (Chief of the Antimonopoly Bureau, of the Ministry of Commerce or MOFCOM) delivered a speech at an academic conference entitled "International Symposium on Enforcement of China’ Anti-Monopoly Law in the New Economy" held at Beijing’ People’ University. 

During Mr Shang’s speech, he revealed the following facts and figures about MOFCOM’s merger control regime:

  • In 2009, MOFCOM accepted approximately 87 merger filings.  In 2010, MOFCOM accepted more than 110 merger filings.
  • In 2009, MOFCOM issued 5 conditional clearances.  In 2010, MOFCOM issued 1 conditional clearance.1
  • Mr Shang pointed out that MOFCOM was aware that many mergers were still not being notified – mainly because many business operators were still not aware of when a transaction is to be notified to MOFCOM. 
  • Mr Shang revealed that MOFCOM was expecting to publish implementation rules in relation to Article 4 of the Provisions of the State Council on Notification Thresholds of Concentrations of Undertakings, early next year.  Article 4 deals with transactions which do not meet the turnover thresholds but would nevertheless restrict or eliminate competition in the relevant market.  Article 4 gives MOFCOM a source power to investigate such transactions.

Comments

In August 2010 (during the 2 year anniversary of the Anti-Monopoly Law, which was enacted in August 2008), MOFCOM revealed that they had accepted 140 merger filings for review (see our article entitled "Second Anniversary of China’s Anti-Monopoly Law" dated 13 August 2010.

Mr Shang’s above mentioned figures reveals that the number of filings with MOFCOM is steadily increasing over the years.  As practitioners in this field, we are also seeing businesses becoming increasingly aware of the statutory requirement to notify if the turnover thresholds are met.

We look forward to MOFCOM’s implementation rules in respect of Article 4 of the Provisions of the State Council on Notification Thresholds of Concentrations of Undertakings.  This will help clarify when a transaction must be notified, despite not meeting the turnover thresholds set up in those Provisions. 

In addition, we note that on 19 January 2009, MOFCOM issued draft rules entitled "Interim Rules on the Investigation and Determination of Concentration of Operators below the Notification Threshold with Monopolisation Suspicion"(however, while this is likely, we are unsure as to whether Mr Shang was referring to these rules during his speech).  These draft rules outline when MOFCOM might commence an investigation into a transaction (which does not meet the turnover thresholds) and the manner in which MOFCOM will conduct such an investigation.  These draft rules, however, do not state whether business operators would be subject to any remedies, should it be found that the transaction eliminates or restricts competition in the relevant market.  For greater certainty, we would urge that MOFCOM clarify this point in particular, when issuing implementation rules in respect of Article 4 of the Provisions of the State Council on Notification Thresholds of Concentrations of Undertakings.

1.In 2010, the only merger filing approved with conditions in China is the Novartis/Alcon case – King & Wood acted as the Chinese antitrust advisors for both Novartis and Alcon, on this deal.