The website of the Anti-monopoly Bureau of the Ministry of Commerce (“Anti-monopoly Bureau”) has become “the must-see site” for antitrust lawyers practicing in China. See Since the beginning of 2009, the Anti-monopoly Bureau has used the site to announce six drafts of various provisions and guidelines, and two transitional guidelines regarding implementation of a new pre-merger filing system under the Anti-monopoly Law.

Following the announcement of thresholds for pre-merger filing in China, Anti-monopoly Bureau is actively constructing the new pre-merger filing system in compliance with the Anti-monopoly Law and working to clarify vague areas of the new law.


The new drafts that were disclosed and opened for comment are:

  • Interim Provision on Notification of Concentration of Undertakings (“Interim Filing Provision”)
  • Interim Provision on Reviewing of Concentration of Undertakings (“Interim Reviewing Provision”)Interim Provision of Investigating and Handling of Suspected Monopolistic Concentration of Undertakings that Does Not Reach the Filing Thresholds
  • Interim Provision of Collecting of Evidences of Suspected Monopolistic Concentration of Undertakings that Does Not Reach the Filing Thresholds (collectively with the former one, referred to as “Interim Provisions on Initiative Investigation”)
  • Guideline of Definition of Related Market

Although these documents are still drafts and are open to the public for comment, the proposed terms and clauses in these documents reflect new trends and areas that Anti-monopoly Bureau intends to clarify and emphasize.

Enlarged Scope of Filing

While the Anti-monopoly Law only provides a vague definition of concentrations by undertakings (merger and acquisition), the Anti-monopoly Bureau has made clear that joint ventures triggering the new thresholds are to be included in the scope of pre-merger filings. The Interim Filing Provision states that “forming a new joint venture by two or more undertakings, is deemed as concentration of undertakings under Section 21 of Anti-monopoly Law”.

Clarified Definition of Turnover Threshold

The issue of how to calculate “turnover” under the new pre-merger filing thresholds has been a headache for antitrust lawyers in China since last August. The Interim Filing Provision attempts to define the meaning of turnover itself and various issues relating to the calculation of turnovers.

The territory for calculating turnovers excludes Hong Kong, Macau and Taiwan. Although this issue was confirmed and clarified through practice before the effectiveness of Anti-monopoly Law, this is the first time that the filing territory issue will be officially settled.

The Interim Filing Provision also provides that the turnover of an individual party shall include the transactional turnover between the filing party and its affiliate, as long as there exists direct or indirect controlling relationships between them.

Hearing Procedure

The Interim Reviewing Provision provides detailed procedures for hearings held by Anti-monopoly Bureau, including attending authorities, experts, industrial association and consumers. In the event of a negative result after the initial review, the hearing procedure gives the parties an opportunity to raise objections and submit written answers to the initial review.

Conditional Approval

The Interim Reviewing Provision provides the conditions for issuance of conditional approvals for certain filings. The new provisions describe three types of conditional approvals:

  • Structural conditions, including peeling off or selling certain assets or business of the applying parties
  • Behavior conditions, including forced opening of fundamental facilities (networks or platforms)
  • Combined conditions, including both conditions above.

The conditional approval has already been used in the INBEV acquisition of Anheuser-Busch in late 2008 (No. 95 Official Announcement of Anti-monopoly Bureau, MOFCOM), which is the first conditional approval issued since the Anti-monopoly Law became effective. The condition used in INBEV’s case was to require INBEV not to increase shares in Chinese beer manufacturers.

Initiative Pre-merger Investigation

Interim Filing Provision and Interim Provisions on Initiative Investigation suggest that Anti-monopoly Bureau intends to secure its power to commence investigations into transactions below the filing thresholds. Upon such regulation, Anti-monopoly Bureau is turning its nature from “approve upon application only” to “approve and investigate”. According to the Interim Filing Provision, it also encourages voluntary filing by parties even if the transaction does not trigger the filing thresholds. Further, Anti-monopoly Bureau has been encouraging parties to conduct pre-consultations with Anti-monopoly Bureau even if the parties believe that their transaction would not trigger the thresholds. Through encouragement of voluntary filing and pre-consultation, Anti-monopoly Bureau will obtain more information of ongoing transactions and potential deals that may need further attention or investigation. This is the signal that Chinese government is strengthening its cautiousness and attention to middle-to-low sized acquisition transactions, and joint venture projects as well.

Transitional Guidelines

Before adoption of the above-mentioned rules and guidelines, the transitional guidelines for pre-merger filing and reviewing will be the temporary rules for any companies completing deals now. Generally, the transitional guidelines have not brought in any substantial issues or new changes, as they are described as in the nature of “for reference purpose only”. However, the two transitional guidelines did confirm some procedural changes in pre-merger filing, including that the investigation period will not commence until a written case acceptance notice is issued by Anti-monopoly Bureau upon parties submission of documents. In the past, the Anti-monopoly Bureau often deems the receipt notice of documents as the commencement notice, upon which the period of reviewing counts down. In the future, as a result, only the official case acceptance notice will trigger the counting down of approval. Before the issuance of the case acceptance notice, parties may face requests from Anti-monopoly Bureau to provide additional information or materials.

Authored By:

Michael Zhang