In response to the inquiry of a National People’s Congressman, the Ministry of Commerce of China (“MOFCOM”) expressed that MOFCOM is making the Implementation Rules on Antimonopoly Examination on Concentrations of Business Operators (the “Rules”) to implement Chapter 4 of Anti-Monopoly Law.
In the past five years, MOFCOM handled more than 700 cases. Recently, the cases that MOFCOM handles are exploding. On average, MOFCOM has to close a case within four days, which becomes a mission impossible without reforming MOFCOM’s case-reviewing system. One of the reforms to adopt is a simplistic mechanism to expedite the examinations of simple cases, which then results in another issue: what is a simple case?
According to the Interim Regulations on Applicable Standards for Simple Business Operator Concentration Cases (Draft for Comments) (the “Draft Interim Regulations”), following concentrations would fall within the category of a simple case:
- Within a single relevant market, the total market shares of all of the business operators participating in a concentration are less than 15%;
- Each of the business operators participating in a concentration has less than 25% market shares if the business operators have upstream-downstream relationship;
- Each of the business operators participating in a concentration has less than 25% market shares as long as the business operators do not have upstream-downstream relationship;
- The business operators set up a joint venture outside China, and the joint venture does not engage in any business activities within China;
- A business operator participating in a concentration acquires the equity interests or assets of an overseas enterprise and the overseas enterprise does not engage in the business activities within China; or
- A joint venture that was previously jointly controlled by two or more than two business operators is solely controlled by one of the business operators or jointly controlled by more than one of the business operators.
The Draft Interim Regulations was promulgated to seek comments in April of 2013 as far as May 2, 2013. Because both the Rules and the Draft Interim Regulations mentioned the simplistic case-reviewing mechanism, it seems that such a mechanism will become a sure thing. In addition, four days a case seems too much even for MOFCOM.
