Authored by Dr. Zhan Hao (

With more than four years’ experience, the Ministry of Commerce of PRC (“MOFCOM”) is becoming an increasingly important and high-profile merger review jurisdiction in the globe. As of 30th December, 2012, MOFCOM has handled 533 cases in total, which is quite striking. With regard to both the legislation and law enforcement, MOFCOM have gained impressed progress.

Supporting Legislation

There are eight concentration-related supporting regulations or guidelines have been enacted between 2008 and 2011 in all. In the passing 2012, MOFCOM mainly focused on proceeding supporting legislation in two aspects.

One is rules on imposing conditions on concentrations, before which MOFCOM issued the Interim Provisions on Asset or Business Divestiture in Concentration between Undertakings in 2010. With the target to summarize experience in implementing this Interim Provisions and address discovered problems, MOFCOM decided to enact a new legislation to make a full range of regulation on the proposal, assessment, implementation, supervision, modification of conditions on the concentration as well as the liability issue.

The other vital legislation project in 2012 is Provisions on Applying fast-track Procedure in Concentration cases, which is intended to increase the efficiency of law enforcement. Indeed, it sees a tendency of gradually increased concentration notification cases. According to statistics, 16 cases are concluded in 2008, 78 cases in 2009, 109 cases in 2010 and 171 cases in 2011. 2012 would see an approximately same amount of concluded concentration cases with 2011. Therefore, without a fast-track procedure for conducting antitrust review on concentrations, the enforcement authority would have difficulty in focusing on significant and complicated cases.

For the interests of enterprises, the potential establishment of fast-track procedure would be also good news without doubt, which could shorten the review time of MOFCOM to some extent. Nevertheless, it is not expected that the planned fast-track mechanism may significantly shorten the merger review process of PRC.

Law Enforcement

1. In terms of the numbers of cases that being notified with MOFCOM and cases that being officially accepted, it witnessed a trend of gradual increase. 17 and 77 cases were notified with MOFCOM in 2008 and 2009, respectively; and all of them are officially accepted. In 2009, MOFCOM has seen a sharp rise of case amount; 136 cases were notified with MOFCOM and 118 of them were officially accepted. Up until 26th December, 2012, MOFCOM received 201 concentration notification cases, officially accepted 186 cases in total. It is estimated that the case number in 2013 and 2014 would still stable around 200.

2. With regard to the form of cases, a major proportion of concentrations accepted by MOFCOM adopted the mean of security acquisition. For example, there are 101 cases relating to security acquisition (62% of concluded cases) in 2011. In 2012, 71 concentration notifications involve security acquisition (55% of concluded cases).

Besides, establishment of joint venture is also viewed as a significant form of concentration in MOFCOM’s eyes. Unlike in EU, where only full-function joint venture would be treated as a “concentration”; while all joint ventures regardless of whether they are full-function or part-function in the current stage in PRC antitrust realm usually are treated as “concentration”, thereby bear the obligation of notifying with MOFCOM as long as they reach relevant threshold.

According to the data released by MOFCOM, there are 49 concentrations by way of establishing joint venture (30% of concluded cases) in 2011 and 70 concentration notifications involve establishment of joint venture (around 34% of concluded cases) in 2012.

3. With respect to the nature of concentration cases, the majority cases are horizontal concentration between competitors. In 2011 there are 97 horizontal concentration cases, 13 vertical concentration cases and 42 conglomerate concentration cases have been notified with MOFCOM, which account for 60%, 8% and 26% respectively. Up until November of 2012, the number of horizontal concentration cases is 80, accounting for 65% of all.

4. In addition, most of concentrations happened in manufacturing industries, including petroleum, chemical, mechanical manufacture, automobile, shipping, aircraft, mining, etc. In 2011 the number of concentrations in manufacturing, IT, wholesale and retail industry is 107, 13, and 12 respectively. There are 74 concentrations in manufacturing industry, which is slightly lower than in 2011.

5. Another attractive phenomenon is that 2012 has been witnessed as the year that conditional approvals are issued most by MOFCOM since the Anti-Monopoly Law (“AML”) entered into force in 2008. The number of conditional approval from 2008 to 2012 is 1, 4, 1, 4 and 6 respectively.

6. According to AML, MOFCOM is only required to publicize conditional approvals and prohibition decisions. In order to increase the transparency of law enforcement, nevertheless, MOFCOM started to disclose all unconditional approved cases on its website from the end of 2012, which are 517 cases in total as of 30th December, 2012. It is announced that such information would be disclosed by quarterly summery hereafter.

7. From the beginning of last year, MOFCOM started to focus on the issue of investigation on un-notified concentrations. Up until now, MOFCOM received 3 reports, two of which have been verified and the other one is still under examination of report materials, as reported.

Although the Provisional Measures on Investigating and Penalizing Violation of Notification Obligations for Concentrations of undertakings has provided the level of penalty which shall be imposed on violating enterprises, it is hotly commented that the penalty level is not high enough to have deterrence effect.  However, it is also argued that the reputational punishment based on Article 15 would possess more significance to the enterprises having business in China.

8. Regarding the timing of MOFCOM’s review process, set forth below is some historic data disclosed:

Case name                               Filing date                  Date of being accepted                    Duration

InBev / Anheuser-Busch         09/10/2008                       10/27/2008                                  37 days

Coca Cola/ Huiyuan                09/18/2008                       11/20/2008                                  62 days

MitsubishiRayon Co.               12/22/2008                       01/20/2009                                  28 days

/Lucite International Group

 Holdings Ltd

Pfizer Inc/Wyeth                     06/09/2009                         06/15/2009                                 7 days

Panasonic/Sanyo Electric      01/21/2009                         05/04/2009                               103 days

GE/Delphi                               08/18/2009                         08/31/2009                               13 days

Novartis/ Alcon                       04/20/2010                         04/20/2010                                     0

Uralkali/ Silvinit                       03/14/2011                         03/14/2011                                     0

Penelope/ Savio                      07/14/2011                        09/05/2011                                51 days

GE/Shenhua Group                04/13/2011                         05/16/2011                                33 days

Seagate/Samsung                  05/19/2011                         06/13/2011                                24 days

Henkel (Hong Kong)/              08/08/2011                         09/26/2011                                48 days

Tiande Chemical

West Digital/Hitachi               04/02/2011                          05/10/2011                                 38 days

Google/Motorola                    09/30/2011                         11/21/2011                                  52 days

Goodrich/UTC                        12/12/2011                         02/06/2012                                 56 days

Walmart/Niuhai                      12/16/2011                         02/16/2012                                  61 days

Advanced RISCMachines/     05/04/2012                         06/28/2012                                 55 days

G&D/ Gemalto                  

(table one)

Case name                       Date of being accepted                Date of decision                     Duration

InBev / Anheuser-Busch       10/27/2008                                 11/18/2008                           21 days

Coca Cola/ Huiyuan              11/20/2008                                 03/18/2009                          118 days

MitsubishiRayon Co. /           01/20/2008                                 04/24/2009                           94 days

Lucite International Group

Holdings Ltd

Pfizer Inc/Wyeth                    06/15/2009                                 09/29/2009                         106 days

Panasonic/Sanyo Electric     05/04/2009                                 10/30/2009                         176 days

GE/Delphi                              08/31/2009                                 09/28/2009                         28 days

Novartis/ Alcon                      04/20/2010                                 08/13/2010                         113 days

Uralkali/ Silvinit                      03/14/2011                                 06/02/2011                          78 days

Penelope/ Savio                    09/05/2011                                 10/31/2011                          56 days

GE/Shenhua Group              05/16/2011                                  11/10/2011                         174 days

Seagate/Samsung                06/13/2011                                  12/12/2011                         180 days

Henkel (Hong Kong)/            09/26/2011                                  02/09/2012                         133 days

Tiande Chemical

West Digital/Hitachi              05/10/2011                                  03/02/2012                          297 days

Google/Motorola                  11/21/2011                                   05/19/2012                         180 days

Goodrich/UTC                      02/06/2012                                  06/15/2012                          130 days

Walmart/Niuhai                    02/16/2012                                   08/13/2012                         181 days

Advanced RISCMachines/   06/28/2012                                  12/06/2012                          179 days

G&D/ Gemalto

(table two)