On 1 August 2008 the Chinese Anti-Monopoly Law entered into force, introducing a comprehensive framework for competition law to the Chinese market. One set of the new rules pertains to merger control. China’s Ministry of Commerce (MOFCOM) was nominated as the authority responsible for enforcing merger control in China and has been actively doing so ever since. Recent years have established China as one of the most important merger filing jurisdictions for cross-border mergers alongside the EU and USA. This work evaluates the Chinese merger control law regime and MOFCOM’s decision-making practice after more than five years of application. In particular, it assesses which policy goals (competition policy goals or industrial policy considerations) prevail in the written law and its application and provides suggestions for a further improvement of the law – with the aim to develop a transparent merger control regime that promotes long-term economic growth in China.
This book analyzes the specifics of corporate governance of China's State Owned Enterprises (SOEs) and their assessment under EU merger control, which is reflected in the EU Commission's screening of the notified economic concentrations. Guided by the going global policy and the Belt and Road Initiative, Chinese SOEs have expanded their global presence considerably. Driven by the need to acquire cutting edge technologies and other industrial policy considerations, Chinese SOEs have engaged in a series of corporate acquisitions in Europe. The main objective of this book is to demonstrate the conceptual and regulatory challenges of applying traditional merger assessment tools in cases involving Chinese SOEs due to the specifics in their corporate governance and the regulatory framework under which they operate in China. The book also explores the connection between the challenges experienced by the merger control regimes in the EU and the recent introduction of the EU foreign direct investment screening framework followed by a proposal concerning foreign subsidies. The book will be a useful guide for academics and researchers in the fields of law, international relations, political science, and political economy; legal practitioners dealing with cross-border mergers and acquisitions; national competition authorities and other public bodies carrying out merger control; policy makers, government officials, and diplomats in China and the EU engaged in bilateral economic relations.
The China Anti-Monopoly Law (AML), which became effective August 1, 2008, is the first comprehensive competition law enacted by China. The AML prohibits a broad array of agreements between competitors and commercial counterparties, as well as competitive conduct by single firms that may harm the competitive process. In addition, it establishes a mandatory administrative review procedure for mergers and acquisitions between companies meeting certain sales thresholds, globally or in China. Beyond these fundamental provisions, the AML prohibits certain types of administrative abuses believed to be prevalent in China and establishes a complex set of administrative agencies with broad powers to enforce the law. Anti-Monopoly Law and Practice in China is the first comprehensive treatment of the AML and the practice of antitrust law under this new system. Each chapter on the substantive provisions of the law includes practical advice on approaches to meeting the challenge of complying with the law's requirements, including analysis of likely interpretations and applications of the AML based on precedents in related economic laws and actions by other administrative agencies. Where policy choices are uncertain, the text will explore probable developments in China based on comparable applications of competition laws in other jurisdictions.
This unique book considers competition policy and regulation in light of the recent introduction of the anti-monopoly law in China. It addresses the relevance of competition policy for China from a broad theoretical and practical perspective, bringing together lawyers and economists from China, Europe and the US to provide an integrated law and economics approach. Given that the development of the Chinese anti-monopoly law in China was heavily reliant on a comparative approach, the contributors analyse how its text and practice actually compare to European and US legislation. The first cases in which Chinese anti-monopoly law were applied are explored, and both competition law and competition policy are discussed in detail. Topics include: industrial and professional regulation and their relationship to competition law, merger control, substantive competition law issues, cartels, and abuse of dominance and predation. This unique book will prove a fascinating read for competition lawyers, economists with a special interest in regulation and competition, and for practitioners concerned with competition policy and regulation.
Since August 2008, when China's Anti-Monopoly Law became effective, its Ministry of Commerce has reviewed over 450 notified transactions and issued over a dozen decisions. These decisions, plus the unconditional clearance of several transactions, reveal MOFCOM's rapidly growing sophistication in analyzing the competition implications of transactions and overall mainstream approach to merger analysis, as well as its continued delicate balancing of competition factors with other considerations. The decisions may also reflect the natural conservatism when acting in what is for China still fairly uncharted territory. They may indicate one approach for a developing competition law regime to establish a body of precedents within the global mainstream while accommodating specific domestic circumstances. A close review of MOFCOM's decisions leads to a conclusion that there remains a risk that the AML merger control process will be politicized and trumped by industrial policy and nationalism. It seems also clear that any accommodation of industrial policy or nationalism is made with a care to minimize distortion of the development of competition law in China. MOFCOM is deftly developing a public record that will support development of AML enforcement generally within mainstream competition law internationally, while addressing in ways primarily off-the-record non-competition domestic concerns. The decisions may reflect the fact that the AML expressly requires consideration of non-competition factors such as China's national economic development. Those published decisions that differed significantly from that of other major competition law jurisdictions are noteworthy in generally imposing conditions where other authorities imposed none or fewer, in the nature of the conditions imposed, and in the possible motivations for the outcomes. This paper considers MOFCOM's AML enforcement record. It summarizes the merger control regime created under the AML and its implementing regulations. It analyzes the statistics through mid-December 2011 and the published decisions through August 17, 2012. Some themes that may be discerned are discussed. First, MOFCOM has achieved flexibility in its implementation of the AML beyond that provided in the statute, especially in the time line for merger review. Second, MOFCOM's inaction in some instances and apparent off-the-record positions in other situations can be explained as ways to accommodate nationalism and industrial policy without creating a record of competition law enforcement skewed by non-competition factors. The paper next reviews the published decisions where nationalism and industrial policy concerns may have been accommodated. The conditions imposed by MOFCOM in several cases appear explicable primarily if industrial policy was considered. Nonetheless, a complete review of the published decisions indicates that MOFCOM's analyses reflect more a skepticism toward analyses of parties' likely conduct post-transaction, as well as a recognition that its only opportunity to address concerns is at the merger control stage, because post-transaction abuse of market power would be within the purview of the State Administration for Industry & Commerce and the National Development & Reform Commission. Where the transaction appears unlikely to affect a significant Chinese industry, MOFCOM appears confident in its merger analyses. The paper closes with recognition of the overall challenge for MOFCOM's development of AML merger control.
After 13 years of discussion, the anti-monopoly law of the People's Republic of China was promulgated in August 2007 and entered into force a year later. During the legislative process, a particular challenge was to determine the goal of competition law in China. This challenge can be best illustrated by the merger control policy under the Chinese anti-monopoly law, which has been formulated by taking into account economic goals, as well as various social and political considerations. This book takes a comparative perspective in investigating to what extent competition goals may influence merger policy by focusing on four major issues. First, in order to understand why competition law and policy in China incorporates a multitude of policy goals, the legislative history of the anti-monopoly law and merger policy is explored. Second, the evolution of the debate on competition goals in the US and the EU puts the developments in China in a comparative perspective. Third, emphasis is placed on the evolution of incorporating the efficiency goal into merger policy. Finally, given the theoretical debate on competition goals, the book discusses whether competition goals may have an impact on the analysis of merger cases. Taking economic theories and modern economic techniques as the benchmark, the book concludes that the divergent competition goals in China, the US, and the EU lead to a different outcome of merger cases. It also sets out the policy implications for competition policy makers in China. (Series: European Studies in Law & Economics - Vol. 13) [Subject: Economic Law, Competition Law, Comparative Law]
This book analyzes the specifics of corporate governance of China’s State Owned Enterprises (SOEs) and their assessment under EU merger control, which is reflected in the EU Commission’s screening of the notified economic concentrations. Guided by the going global policy and the Belt and Road Initiative, Chinese SOEs have expanded their global presence considerably. Driven by the need to acquire cutting edge technologies and other industrial policy considerations, Chinese SOEs have engaged in a series of corporate acquisitions in Europe. The main objective of this book is to demonstrate the conceptual and regulatory challenges of applying traditional merger assessment tools in cases involving Chinese SOEs due to the specifics in their corporate governance and the regulatory framework under which they operate in China. The book also explores the connection between the challenges experienced by the merger control regimes in the EU and the recent introduction of the EU foreign direct investment screening framework followed by a proposal concerning foreign subsidies. The book will be a useful guide for academics and researchers in the fields of law, international relations, political science, and political economy; legal practitioners dealing with cross-border mergers and acquisitions; national competition authorities and other public bodies carrying out merger control; policy makers, government officials, and diplomats in China and the EU engaged in bilateral economic relations.
It probably goes without saying that anti-monopoly law and practice are of very recent vintage in China. In August 2008, 118 years after the Sherman Act and 50 years after the Treaty of Rome, China’s Anti-Monopoly Law (AML) came into effect. Since then the enforcement of the AML has seen significant progress as well as considerable challenges. This volume, comprised of 27 highly informative contributions by more than 40 government officials, academics, economists, in-house lawyers, and private practitioners, introduces novice practitioners to the complexities of antitrust law in China and provides new insight for those already working in the field. Generally following the structure of the text of the AML, topics and issues covered include the following: an overview of the first five years of AML implementation; the institutional framework for antitrust enforcement in China; monopoly agreements between market players; abuses of dominance committed by a single company; problems and potential solutions for information exchanges between competitors; the economics underlying retail price maintenance; refusals to deal; procedural and substantive practice of merger decisions; the application of merger control to joint ventures; ‘administrative monopolies’ and the tension between competition and industrial policies; ways to seek legal redress; litigation (both administrative and civil) and the role of the courts; international cooperation efforts made in relation to Chinese antitrust enforcers; the relationship between the AML and China’s anti-bribery rules; the treatment of vertical integration or cooperation; and how the AML rules apply to intellectual property rights. Throughout the book there are analyses of major judgments with key conclusions to be drawn from them, as well as comparisons with corresponding judgments in other jurisdictions. This book is the first comprehensive analysis of the AML, and as such will be of inestimable value to business persons and in-house counsel, as well as to academics in Chinese law and competition law from a global perspective.
This paper explores the factors that drive merger outcomes under China's Anti-Monopoly Law (AML). The paper overcomes the problem of a small number of published merger decisions through a unique practitioner survey of antitrust lawyers across multiple jurisdictions. This survey captures transactions contemplated, but never undertaken (deterred by the merger regime), as well as mergers notified for approval under the AML. The survey allows for broader inferences to be drawn about the development of Chinese antitrust. These include: the welfare standard used in merger analysis, what industrial policy and other political factors may impact merger enforcement, as well as issues of institutional design, transparency, and delay.
Derived from the renowned multi-volume International Encyclopaedia of Laws, this practical analysis of competition law and its interpretation in the China covers every aspect of the subject – the various forms of restrictive agreements and abuse of dominance prohibited by law and the rules on merger control; tests of illegality; filing obligations; administrative investigation and enforcement procedures; civil remedies and criminal penalties; and raising challenges to administrative decisions. Lawyers who handle transnational commercial transactions will appreciate the explanation of fundamental differences in procedure from one legal system to another, as well as the international aspects of competition law. Throughout the book, the treatment emphasizes enforcement, with relevant cases analysed where appropriate. An informative introductory chapter provides detailed information on the economic, legal, and historical background, including national and international sources, scope of application, an overview of substantive provisions and main notions, and a comprehensive description of the enforcement system including private enforcement. The book proceeds to a detailed analysis of substantive prohibitions, including cartels and other horizontal agreements, vertical restraints, the various types of abusive conduct by the dominant firms and the appraisal of concentrations, and then goes on to the administrative enforcement of competition law, with a focus on the antitrust authorities’ powers of investigation and the right of defence of suspected companies. This part also covers voluntary merger notifications and clearance decisions, as well as a description of the judicial review of administrative decisions. Its succinct yet scholarly nature, as well as the practical quality of the information it provides, make this book a valuable time-saving tool for business and legal professionals alike. Lawyers representing parties with interests in the China will welcome this very useful guide, and academics and researchers will appreciate its value in the study of international and comparative competition law.
