A great leap forward

On July 7 2009, the Anti-monopoly Commission of the State Council published the long-awaited final Guidelines on the Definition of Relevant Market (国务院反垄断委员会关于相关市场界定的指南). These are the first guidelines adopted by the Anti-monopoly Commission according to the PRC Anti-monopoly Law (AML) (中华人民共和国反垄断法). Compared with the first draft of the Guidelines circulated by the Ministry of Commerce (Mofcom) for public comments on January 5 2009, the finalised Guidelines have the same structure but contain some amendments, such as providing more details for the application of the Hypothetical Monopolist Test. Basically, the Guidelines will provide more certainty to companies in complying with the AML, such as carrying out mergers and acquisitions, or implementing pricing policies and arranging distribution networks which may affect the Chinese market.

Role and relevance of market definition

As explicitly advocated in the Guidelines, the definition of the relevant market is the “starting point” in any proceeding and is an important step in the actual enforcement of the AML. In the Coca-Cola/Huiyuan Juice case, a Mofcom spokesman stated that, in order to prove the market dominance of Coca-Cola, the first step was to define the relevant market. Meanwhile, under the draft Regulation on Prohibition of Abuse of Dominant Market Position released by the State Administration of Industry and Commerce (SAIC) in April, it has stressed that the determination and presumption of the market dominance should be carried out on the basis of market definition. Hence, following international antitrust practice, the process of market definition serves as prerequisite to the analyses of any anti-competitive behaviour and thus market definition is a means to an end, not an end in itself.