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The Summary on Characteristics of MOFCOM’s Merger Review Activities

Q: Since when has the China’ MOFCOM conducted anti-monopoly review on merger transaction?

A: China promulgated anti-monopoly law (AML) on August 1, 2008 since which  the Ministry of Commerce (MOFCOM),which is responsible for merger reviews in China, begun to conduct anti-monopoly review on merger transactions and has reviewed more than 600 transactions by the second quarter of 2013.


Q: Will the MOFCOM publish their decisions on their website after conducting merger review?

A: Yes. The MOFCOM release their decision to the public through their website and we can summarize characteristics of their decision trying to figure out the attitude and common practice by the MOFCOM on review of merger transaction.


Q: How long will it take before the MOFCOM finalize their merger review?

A: it varies in different cases. Normally it will take 6 month before the MOFCOM finalize the merger review; however, in some cases, it would take one year to complete it due to short-handed of the MOFCOM and complexity of the case.


Q: Did the MOFCOM give their definition on the concept “market” in their decisions?

A: From the MOFCOM’s decisions published by their website, we can see that the MOFCOM has already given the description of relevant markets, but the definition of the geographic market is not always clear-cut—some times both global and domestic markets are evaluated.


Q: Did the MOFCOM provide the information about the market shares and market concentration in their decisions?

A: Yes. The MOFCOM gave the information about the market shares or the market concentration of the parties to merger transaction, and sometimes would advise the market shares of the third competitor.


Q: Did the MOFCOM conduct competitive effect analysis in their merger review?

A: Yes. We can see that their decisions have already included the competitive effect analysis. The MOFCOM is especially concerned about fore-closure effects in vertical mergers, and leverage effects in conglomerate mergers. Also, the MOFCOM gave the reasons in their decision why they believe some merger transaction would result in the barriers to entry, such as time and cost to enter, patents or other IP, technology, skills, or regulatory obstacles and so on.

Q: Did the MOFCOM often seek opinions and information from third parties?

A: Yes. We notice that the MOFCOM often seek information from other relevant government agencies, trade associations, upstream and/or downstream firms, or even competitors. The MOFCOM also conducted onsite investigations in a few cases or seek the professional advice from the lawyers, experts in economics, the relevant industry or technical areas.

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