On June 17, the State Administration of Market Construction and Supervision issued a public announcement on soliciting opinions on the Guidelines for the Examination of Horizontal Concentration of Operators (Draft for Opinions).
In order to further standardize the review of horizontal concentration of undertakings, increase the transparency of anti-monopoly review, and enhance the expectation of assessing the impact of competition on concentration of undertakings, the General Administration of Market Supervision has drafted the Guidelines for the Review of Horizontal Concentration of Undertakings (Draft for Opinions), which is now open to the public for comments.
General Provisions
Article
1 In order to further standardize the horizontal examination of concentration of undertakings, increase the transparency of anti-monopoly examination, and enhance the expectation of assessing the impact of concentration of undertakings on competition. These Guidelines are formulated in accordance with the Anti-Monopoly Law of the People's Republic of China (hereinafter referred to as the Anti-Monopoly Law), the Provisions of the State Council on the Standards for the Declaration of Concentration of Undertakings (hereinafter referred to as the Standards for Declaration) and the Provisions on the Examination of Concentration of Undertakings. Article
2 The examination of concentration of undertakings is a pre-judgment examination, the purpose of which is to prevent and stop the concentration of undertakings that have or may have the effect of eliminating or restricting competition by assessing the changes that the concentration may bring to the relevant market competition. Where a concentration of business operators
meets the criteria for declaration, the business operators shall declare to the Anti-monopoly Law Enforcement Agency under the State Council (hereinafter referred to as the Anti-monopoly Law Enforcement Agency) in advance, and shall not implement the concentration without declaration or approval after declaration. Where the concentration of business operators fails to meet the criteria for declaration, but there is evidence to prove that the concentration of business operators has or may have the effect of eliminating or restricting competition, the Anti-monopoly Law Enforcement Agency may require the business operators to declare and notify them in writing. Where the concentration has not been implemented, the business operators shall not implement the concentration without declaration or approval after declaration; where the concentration has been implemented, the business operators shall declare within 120 days from the date of receipt of the written notice, and take necessary measures such as suspending the implementation of the concentration to reduce the adverse effects of the concentration on competition. A concentration of
business operators may not be reported to the anti-monopoly law enforcement authority under any of the following circumstances:
(1) one of the business operators involved in the concentration owns more than 50% of the voting shares or assets of each of the other business operators;
(2) More than 50% of the voting shares or assets of each operator participating in the concentration are owned by the same operator not participating in the concentration. Article
3 The Anti-monopoly Law Enforcement Agency shall support the concentration of business operators in accordance with the law. The concentration of undertakings that do not have the effect of eliminating or restricting competition will be approved by the anti-monopoly law enforcement agencies in accordance with the law. For the concentration of undertakings that have or may have the effect of eliminating or restricting competition, the anti-monopoly law enforcement agencies will prohibit or approve it with restrictive conditions according to law. The term "concentration of undertakings" as mentioned in the
preceding paragraph has or may have the effect of eliminating or restricting competition refers to the competition problems brought about by the concentration. Article
4 The term "horizontal concentration of undertakings" as mentioned in these Guidelines refers to the concentration of undertakings in which the undertakings participating in the concentration have a horizontal relationship, that is, the undertakings participating in the concentration are actual or potential competitors in the same relevant market.
To judge whether the operators participating in the concentration are in the same relevant market, the relevant commodity market and the relevant regional market should be considered at the same time.
In a concentration, the operators involved in the concentration may compete in multiple relevant markets, with horizontal relationships (direct competition) in some relevant markets and non-horizontal relationships, including vertical relationships (upstream-downstream relationships) or mixed relationships (adjacent, complementary, etc.), in some other relevant markets. Anti-monopoly law enforcement agencies will evaluate the horizontal and non-horizontal relationships of the centralized parties one by one. These Guidelines only provide the analysis ideas on the horizontal relationship of the concentration of undertakings. Article
5 When analyzing whether the horizontal concentration of undertakings has or may have the effect of eliminating or restricting competition, the anti-monopoly law enforcement authority shall mainly analyze the following factors:
(1) the purpose of the concentration;
(2) The market share of the undertakings participating in the concentration in the relevant market and their control over the market;
(3) The market concentration of the relevant market;
(4) The impact of the concentration of undertakings on market access and technological progress;
(5) The impact of the concentration of business operators on consumers and other relevant business operators;
(6) The impact of the concentration of business operators on the development of the national economy; and
(7) Other factors that should be taken into account to affect market competition. By analyzing the above factors,
the anti-monopoly law enforcement agencies can judge whether the concentration of undertakings will produce unilateral effect or coordination effect, and then judge whether the horizontal concentration of undertakings has or may have the effect of excluding or restricting competition.
For a horizontal concentration, the unilateral effect and the coordination effect may exist simultaneously or separately. For the concentration of undertakings involving multiple horizontal overlapping related markets, the anti-monopoly law enforcement agencies will evaluate the unilateral effects and coordination effects that may arise in each related market. Article
6 When assessing whether the concentration has or may have the effect of eliminating or restricting competition, the anti-monopoly law enforcement agency may compare the competition situation that may occur in the relevant market if the concentration does not occur. The anti-monopoly law enforcement agency will consider that the concentration has or may have the effect of eliminating or restricting competition.
It is assumed that the situation in which the concentration does not occur may be either the competition situation in the relevant market before the concentration or the competition situation that can be foreseen or may occur in the relevant market in the future if the concentration does not occur.
(Please refer to the attachment below for the detailed rules of the Opinions)
