On December 30, 2011, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) officially issued Interim Measures on Failure of Filing for the Investigation of Concentration of Business Operators (“Interim Measures”), following six months of public comments on the Draft for the Interim Measures (“Draft for Comments”). The Interim Measures will come into effect on February 1, 2012.

The Ministry of Commerce of the People’s Republic of China (“MOFCOM”) issued the Announcement of the Anti-monopoly Examination Decision on the Conditional Approval for the Acquisition of the Hard Disk Drive Business of Samsung Electronics Co., Ltd. by Seagate Technology PLC (the “Announcement”) on 12 December 2011, its tenth conditional clearance decision since the introduction of the Anti-monopoly Law of the People’s Republic of China (the “AML”). According to the Announcement, Seagate Technology PLC (“Seagate”) submitted the notification for the acquisition of the hard disk drive (“HDD”) business of Samsung Electronics Co., Ltd. (“Samsung”) by Seagate (the “Transaction”) to MOFCOM on 19 May 2011. MOFCOM formally accepted the case on 13 June, and decided to further review the Transaction on 13 July. MOFCOM extended the review on 11 October and finally made a conditional clearance decision on 12 December. It took 6 months for MOFCOM, from the date of accepting the case, to fulfill the examination on the Transaction. It has exhausted all three phases stipulated in the AML.

The Ministry of Commerce of the People’s Republic of China (“MOFCOM”) has issued the Announcement of the Anti-monopoly Examination Decision on the Conditional Approval for the establishment of Joint Venture between General Electric (China) Ltd. and China Shenhua Coal to Liquid and Chemical Co., Ltd. (the “Announcement”) on 10 November 2011. This is the ninth conditional clearance decision since the introduction of the Anti-monopoly Law of the People’s Republic of China (the “AML”).

The Ministry of Commerce of the People’s Republic of China (“MOFCOM”) has issued the Announcement of the Anti-monopoly Examination Decision on the Conditional Approval for Penelope Company Limited’s Acquisition of Savio Macchine Tessili S.p.A. (the “Announcement”) on 31 October 2011. This is the eighth conditional clearance decision since the introduction of the Anti-monopoly Law of the People’s Republic of China (the “AML”).

On July 27, 2011, China agencies and US Antimonopoly agencies signed the Memorandum of Understanding on Antitrust and Antimonopoly Cooperation between the United States and the People’s Republic of China. When a multinational enterprise is required to report a business concentration both to the PRC and the US, PRC Antimonopoly agencies and US Antitrust Agencies are very likely to communicate and cooperate on material matters related to the business concentration filing.

This article is to foresee possible participation of the trustee companies in the trading of stock index futures (hereinafter referred to as the “SIF”) in the near future.

It is estimated that M&A activity in 2011will be even more active than last year. But foreign investors, seeking M&A targets in China, will face unprecedented competition. To ensure successful M&A transactions in China, foreign investors should have a clear M&A strategy. In particular, foreign investors need to assess whether their M&A deals are able to leap over three potential hurdles, namely, industry access restrictions, antitrust review, and national security review.

Unlike the Ministry of Commerce (“MOFCOM”), which is in charge of the merger control, the National Development and Reform Commission (“NDRC”) and the State Administration for Industry and Commerce (“SAIC”), which are respectively responsible for regulating price-related anti-competitive practices and non-price-related anti-competitive practices, have been regarded as relatively conservative in enforcing the Anti-monopoly Law (“AML”). At the time of this writing, we learned that SAIC has yet made any antitrust infringement decision or investigation since the AML came into force on August 1, 2008. While since the beginning of 2010, NDRC has published a few decisions and investigations against enterprises and industry associations engaging in cartels or abusive conducts. Although the deterrent effect might be questionable given that the sanctions attached to these cases are moderate in terms of the amount of fines, there are clear indications that NDRC is intending to actively exercise its powers. This article will discuss some notable cases announced by NDRC and analyze their underlying legal implications.

On August 13, 2010, China’s Ministry of Commerce (the “MOFCOM”) has officially approved the concentration of undertakings with respect to Novartis AG’s (“Novartis”) acquisition of Alcon Inc. (“Alcon”) with conditions. In its decision, the MOFCOM has determined that the aforesaid acquisition may eliminate or restrict the competition on the market of ophthalmological anti-inflammation /anti-infection products and contact-lens care products, and has attached restricting conditions respectively to such products market. It is the sixth case of concentration of undertakings that has been approved with conditions since China’s Anti-Monopoly Law (the “AML”) took effect in 2008.

After the oral notice suspending the cooperation between trustee companies and banks by the China Banking Regulatory Commission (“CBRC”), the “Notice of CBRC on the Relevant Matters concerning the Bank-Trustee Cooperative Product” (“the Notice”) was issued on August 10, 2010. The Notice clarifies the speculation related with the suspension of bank-trustee cooperative products and it allows trustee companies to issue a bank-trustee cooperative product under certain conditions. In addition, the Notice establishes the standards and limitations for these bank-trustee cooperative products.

A decree was published by the People’s Bank of China on 21 June, 2010 for the purpose of regulating the behaviors of non-financial institutions in providing payment services, the Measures for the Administration of Non-financial Institution Payment Services (hereinafter referred to as the Measures) was promulgated and shall come into force as of 1 September 2010.

The Interim Provisions on the Implementation of Divestiture of Assets or Business of Concentration of Undertakings (hereinafter referred to as “Interim Provisions”) was promulgated by the Ministry of Commerce of the People’s Republic of China (hereinafter referred to as “MOFCOM”) on 5 July, 2010. The Interim Provisions, for the first time in the form of regulatory documents by the enforcement authority of the Anti-monopoly Law, clarify the procedure of implementing commitments in divestiture of assets or business to certain concentrations of undertakings. In addition, the Interim Provisions serve as another important regulation following a series of guides and measures related to concentration of undertakings promulgated by the MOFCOM, ushering in a new stage of law-enforcement practice of undertaking concentration examination. Later on, the MOFCOM may hold a prudent attitude before making a decision to prohibit undertaking concentrations. However, as for the undertaking concentrations which may raise competition concerns, a decision subject to restrictive divestiture conditions is more likely to be made by the MOFCOM.

The anti-Monopoly Law of the People’s Republic of China (‘the aML’) was issued on 30 august 2007 and took effect on 1 august 2008. Dubbed China’s ‘economic constitution’, the AML is the country’s first comprehensive competition law. In addition to regulating administrative monopolies, the AML covers the following three areas of private party conduct: concentration of undertakings (mergers), monopoly agreements and abuse of dominant market position. Before passage of the AML, there were three government agencies involved in competition law enforcement. The Ministry of Commerce (‘MOFCOM’) and the State administration for industry and Commerce (‘the SaiC’) were responsible for merger control in foreign acquisitions of domestic entities and offshore acquisitions that would have an adverse impact on competition in the Chinese market in accordance with the Rules on Mergers with and Acquisitions of Domestic Enterprises by Foreign Investors;1 the SAIC was also in charge of regulating certain anti-competitive behaviour such as unfair competition and abuse of dominant position in accordance with the anti-Unfair Competition Law. The National Development and Reform Commission (‘the NDRC’) supervised pricing of goods and services and was concerned with monopolistic pricing in accordance with the Price Law promulgated in 1997.

On May 27 2010, the State Administration for Industry and Commerce (“SAIC”) published new sets of draft rules on monopoly agreements, abuse of dominant position and administrative monopoly for public comments. The new rules were revised on the basis of pubic opinions and comments from last June, when SAIC published the initial draft rules. The new drafts have made considerable improvements on the initial drafts: they have added more detailed guidance on certain critical concepts under the Anti-monopoly Law, e.g., “legitimate reason”, “tacit collusion” and “tying”, and removed some controversial provisions. The amendments of the initial drafts also demonstrate SAIC’s open attitude to solicit public opinions from the industry as well as professionals. The new drafts seem to be more practical, while several issues (in particular, those relating to vertical monopoly agreements) still need to be clarified. These rules are expected to be promulgated soon after the close of this round of consultation on 7 June 2010.

Welcome friends, old and new to this congress! I would like to discuss here on the topic of “China’s Practice on Abuse of Dominance" with a concrete case. Anti-monopoly law is usually considered involving three elements, which are: monopoly agreements, abuse of dominant market position and concentration of business operators. In China’s current antimonopoly law practice, most cases are related to the concentration of business operators, while cases about monopoly agreements and abuse of dominant market are relatively less in amount. While discussions on concentration of business operators has gone much further, the attitude of antimonopoly authorities remains unclear on some concrete issues regarding the other two aspects.

Today I’m going to share with you the subject “Identify Horizontal Monopoly Agreements and Keep Away Relevant legal Risks, which includes two parts: “Indentify Horizontal Monopoly Agreements” and “Keep Away Relevant Legal Risks”. I will also talk about some cases with all of you in the second part. Given that the majority of the audience is legal professional who is quite familiar with the concept of ‘Horizontal Monopoly Agreements’, I will lay my emphases on the case study of the second part and just give a brief introduction of the basic system and fundamental concepts of Horizontal Monopoly Agreements.

The Anti-Monopoly Law of the People’s Republic of China (the “AML”) has entered into force for more than one and a half years.

In a landmark ruling on 30 October 2009, the Ministry of Commerce of the People’s Republic of China ("MOFCOM") granted conditional antitrust clearance to the merger between Panasonic Corporation (“Panasonic”) and Sanyo Electric Co., Ltd. (“Sanyo”). Zhong Lun Law Firm’s antitrust and competition team, led by senior partner Wu Peng (assisted by ten lawyers), has advised both Panasonic and Sanyo on all aspects of the MOFCOM merger control review process. In addition to assisting Panasonic and Sanyo in preparing the merger notification filing, and representing them in consultations with MOFCOM on proposed merger remedies, Zhong Lun will also assist the parties in their implementation of the remedial measures stipulated by MOFCOM.

Under the Measures for the Administration of Outbound Investment, the MOFCOM approval process will be simplified and handled mainly by local authorities.