Why SAIC needs to speed up

2. What developments do you expect to see in the next 12 months?

According to Shang Ming, Directorate General of the Anti-monopoly Bureau of MOFCOM, at the BRICS International Competition Conference last year, at least two more implementing rules will be issued by MOFCOM in the near future, namely the Provisions for the Imposition of Restrictive Conditions on Concentrations of Business Operators (《关于经营者集中附加限制性条件的规定》) and Measures for Investigating and Handling Suspected Monopolistic Concentrations of Business Operators that Have not Reached the Reporting Thresholds (《未达申报标准涉嫌垄断经营者集中调查处理办法》). It has also been reported that MOFCOM is proposing to streamline anti-monopoly reviews by classifying M&A transactions on the basis of market shares, which might finally introduce an expedited procedure for antitrust reviews of the concentration of business operators in China.

3. How will any of these developments change the competition landscape?

It is still too early to assess the impact of the formal enactment of the supplemental rules above on the competition landscape in China. However, the introduction of the Provisions for the Imposition of Restrictive Conditions on Concentrations of Business Operators will provide important guidance on negotiating the restrictive conditions imposed by MOFCOM to address competition concerns in specific transactions. The final promulgation of Measures for Investigating and Handling Suspected Monopolistic Concentrations of Business Operators that Have not Reached the Reporting Thresholds will also help business operators to better comply with the AML as they will know when MOFCOM is to begin the antitrust review of M&A transaction, even if the threshold is not satisfied.

4. Over the past 12 months, have you seen the Anti-monopoly Law applied fairly to both domestic and foreign businesses?

Since the implementation of the AML on August 1 2008, it has been applied and enforced equally to foreign and domestic companies. For example, on November 10 2011, MOFCOM conditionally approved the incorporation of a proposed joint venture by GE (China) and China Shenhua Coal to Liquid and Chemical, the latter being a Chinese state-owned energy company. Another example concerns enforcement against a well-known state-owned enterprise by the National Development and Reform Commission (NDRC) in 2011. On November 9, the NDRC announced that it had begun anti-monopoly investigations into China Telecom and China Unicom, both of which are Chinese state-owned telecommunication operators. On November 14, NDRC also imposed fines of RMB 7 million ($1.1 million) on two local private pharmaceutical companies for price-related anti-competitive behaviour.

5. What are some of the highlights of the year in regard to AML cases? How do these help in understanding how the AML law is applied?

Qihoo 360 v Tencent

This was the first AML case before a Higher Court. Action against the abuse of dominance has been the most active area in AML private litigation since the Law entered into force. The Court here outlined the reasoning when ruling on the abuse of dominance: firstly, define the relevant market, including the product market, geographic market and in certain circumstances, the technology market; then determine the market dominant position according to Article 18 or Article 19 of the AML; thirdly, determine whether there is abusive conduct by the defendant; and finally, identify the damages caused by the abusive conduct. Qihoo appears to be the first plaintiff engaged in in-depth analysis, applied economic tests and presented ample evidence to define the relevant market and prove defendant's dominant position, such as with a demand-side substitutability test, market share data and expert witnesses. Whether and how the Court will accept this proof remains to be seen as the case develops.

Rainbow Medical Equipment & Supplies v Johnson & Johnson

In its first instance judgment, the Court dismissed Rainbow Medical Equipment's claim as it failed to define the relevant market, prove the market power of the defendant or show that the alleged vertical agreement was anti-competitive. This suggests that the Court is applying a rule of reason analysis to vertical agreements involving minimum resale price maintenance. This was also confirmed by the first judicial interpretation issued by the Supreme People's Court, which, unlike the previous draft version, removes the presumption of anti-competitive effects for vertical agreements concerning resale price fixing and minimum resale price restriction explicitly identified in the AML.

6. On May 4, the Supreme People's Court released the first court interpretation of the Anti-monopoly Law since it came into effect four years ago, what are the implications of these Provisions on domestic and foreign companies? Which areas of the Law do they clarify or remain unclear?

This Judicial Interpretation, which is applicable to both domestic and foreign companies, will promote the development of AML private litigation in China. It contains provisions to clarify the jurisdiction, acceptance and consolidation of cases, the allocation of burden of proof, use of expert witnesses and independent professional institutions and the statute of limitations of AML disputes. However, it remains unclear on some aspects, such as how the court is to review the facts determined by AML enforcement authorities, and whether the defendant can apply the passing-on defence to AML private actions. The Judicial Interpretation also says nothing on the triple damages rules, which has been well adopted by US courts.

PRC courts have yet to rule in favour of the plaintiff in an AML case, mostly due to a failure to meet the burden of proof. Less presumption of the illegality of the defendant, as well as adopting a compensatory damage principle, may dissuade those for whom the law was designed to protect, especially individuals, from launching lawsuits against monopolistic conduct.

7. What practical advice would you give to foreign companies about to engage in an acquisition that would trigger an AML review?

Foreign companies are advised to ensure that they comply with the PRC's AML review mechanism as follows:

• create a schedule for M&A transactions: factor in the PRC anti-monopoly review when contemplating the deal structure and formulating the schedule;

• make pre-notification contact with MOFCOM. MOFCOM can help in preparing the filing documents, defining the relevant market and identifying the potential competition concerns;

• collect information on the Chinese market. Data on the competition within a relevant market, such as market shares and competitors, is often difficult to obtain from public sources in China like the National Bureau of Statistics, so it may be necessary to engage a qualified PRC market-research firm to collect this information; and

• coordinate the AML review in China with the merger notification, if any, in other jurisdictions, such as the EU and US.

Foreign companies should also be cautious of whether the proposed acquisition could trigger a National Security review, which is deemed to be a supplementary mechanism of the AML review.

8. MOFCOM closely scrutinises M&A transactions. In your experience what does it focus on during merger review and how does its practices compare with other competition regulators?

MOFCOM tends to focus on the parties' market share after a transaction and the relevant market's concentration post-transaction. MOFCOM is familiar with the concepts of unilateral effect, coordination effect and foreclosure effects. This means that if the market's concentration is high and the business operators involved in the transaction have significant market shares, MOFCOM may believe that a transaction between them could eliminate or restrict competition in the market. MOFCOM will also focus on the possibility for new competitors to enter the market and seek opinions from such third parties like government departments, trade associations and upstream or downstream players. Decisions in numerous cases have indicated that MOFCOM referred to the decisions of other foreign competition authorities and considered the particular conditions in the Chinese market. This means that although it adopted a similar methodology for reviewing the same case as other mature jurisdictions, MOFCOM may impose different and even tougher remedies to ease competitive concerns. For worldwide acquisitions subject to merger control review in numerous jurisdictions, such as the US, EU, Japan and Korea, clearance from MOFCOM has usually been the last to be issued.

9. What has been the highlight of your competition cases over the past 12 months and why was it challenging? Does it set any precedents?

There was an antitrust review case on the incorporation of a joint venture in China. At that time the GE and Shenhua joint venture had not been announced and there were no explicit provisions under the AML or the supplemental rules stipulating where a joint venture falls within the scope of concentration of business operators. As such, at the beginning, although the foreign partner insisted on notifying MOFCOM, the Chinese partners decided against this kind of merger filing even though the threshold had been met. After explaining the practice of establishing a joint venture in China and the potential legal consequences of failing to comply, and a pre-consultation with MOFCOM, the Chinese party eventually agreed to handle the notification.

10. What key trends are you seeing develop in competition and anti-trust law and enforcement?

In response to common criticism that MOFCOM takes much longer to complete its review process than other merger control authorities, there could soon be a faster approval process in China, similar to the short form filing used in the EU. In addition, faster and more efficient procedures for merger control approval can be expected due to MOFCOM's continuing cooperation with EU and US regulators through various channels. These include the China-EU Competition Policy Dialogue and the Memorandum of Understanding on Anti-monopoly and Antitrust Cooperation signed in 2011 with the Department of Justice and Foreign Trade Commission of the US.

Both the NDRC and State Administration for Industry and Commerce (SAIC) are expected to launch more investigations in enforcement against anti-competitive conduct and impose fines that could reach up to millions of renminbi.

With the effectiveness of the judicial interpretation, more legal actions can be expected in private antitrust litigations, which will be brought before the competent court, whether technically or strategically.

11. If you had to give one piece of practical advice to foreign clients about the competition regime in China, what would it be?

Keep up-to-date on the introduction of the further implementing rules and the decisions published by the anti-monopoly enforcement authorities in the near future. Always seek legal advice from external counsel when your company encounters issues relating to the AML.

为何工商总局需加快步伐

大成律师事务所的戴健民律师提供有关中国竞争法发展的全面概述，并为外国企业就成立合资企业的有关事项提供咨询意见

1. 过去12月，竞争法方面出台了什么主要法规？这些法规对竞争法制度有什么影响？

过去12个月，商务部出台了两项实施细则：2011年9月2日公布的《关于评估经营者集中竞争影响的暂行规定》，自2011年9月5日起施行；2012年1月5日发布的《未依法申报经营者集中调查处理暂行办法》，自2012年2月1日起施行。另外，最高人民法院于2012年5月4日公布的《关于审理因垄断行为引发的民事纠纷案件应用法律若干问题的规定》，自2012年6月1日起施行。最后是商务部于2012年6月6日出台的《经营者集中反垄断审查申报表》（修订）及《填表说明》，自2012年7月7日起施行。

商务部发布的实施细则扩充了中国并购控制的机制。尽管《评估经营者集中竞争影响的暂行规定》被批评为缺乏细节，该规定试图对商务部竞争评估所采用的方法及特定经济工具提供指引，方便并购方进行自我评估及申报前期准备。《未依法申报经营者集中调查处理暂行办法》引入的调查程序较一般并购审查程序的期限更长，加上罚款及责令停止交易等处罚，均显示出商务部对拒绝或未能依法申报的经营者进行处罚的决心。而《关于审理因垄断行为引发的民事纠纷案件应用法律若干问题的规定》则明确了《反垄断法》中如举証责任等有关私人诉讼的事宜，填补《反垄断法》与民事诉讼之间的空白，也为中国反垄断司法审判的发展建立基础。最近颁布的《经营者集中反垄断审查申报表》（修订）及《填表说明》进一步阐明并购方应如何填写申报表。此举显示商务部正进一步规范申报的内容及格式，以减少正式受理案件前要求并购方提供补充资料的需要。

2. 在未来12个月内，您预计将有什么新发展？

商务部反垄断局局长尚明于去年金砖国家国际竞争大会中表示，商务部很快将出台至少两项实施细则，包括《关于经营者集中附加限制性条件的规定》及《未达申报标准涉嫌垄断经营者集中调查处理办法》。根据报道，商务部还建议根据市场份额划分并购交易，以简化反垄断审查程序，此举可能意味着未来中国经营者集中的反垄断审查将引入快速审查程序。

3. 这些新发展如何影响竞争环境？

现时评估上述实施细则的正式施行对中国竞争环境的影响言之尚早。《关于经营者集中附加限制性条件的规定》将为如何就商务部为消除特定交易的限制竞争效果所附加的限制性条件进行协商提供重要的指引。《未达申报标准涉嫌垄断经营者集中调查处理办法》的最终出台也将使经营者的《反垄断法》合规工作更为容易，因为即使并购交易未达到申报标准，经营者也清楚商务部会在什么情况下对并购交易开展反垄断审查。

4. 从过去12个月来看，您觉得《反垄断法》是否对中国和外资企业同等看待？

自《反垄断法》于2008年8月1日实施以来，法律在适用及执行方面，平等对待中国及外国企业。例如，2011年11月10日，商务部附条件批准通用电气（中国）与国有能源企业中国神华煤制油化工设立合资企业。另一个例子涉及国家发展和改革委员会（“发改委”）于2011年对知名国有企业的执法行动。同年11月9日，发改委表示已对中国电信和中国联通开展反垄断调查，两家公司均为国有电信商。另在11月14日，发改委也对两家境内私营医药公司的价格垄断行为，处以罚款7百万元人民币（1.1百万美元）。

5. 今年有什么重大反垄断案件？这些案件如何协助了解《反垄断法》的适用？

奇虎360诉腾讯垄断案

这是首起由高级人民法院审理的反垄断案。自《反垄断法》实施以来，垄断相关的私人诉讼多涉及滥用市场支配地位。高级人民法院在本案的判决中，阐述了法院审理滥用市场支配地位的思路：首先，界定相关市场，包括商品市场、地域市场，以及在某些情况下适用的技术市场；然后根据《反垄断法》第18条或第19条，认定被告的市场支配地位；第三，认定被告是否有滥用的行为；最后，识别滥用行为所造成的损害。奇虎似乎是首位为界定相关市场和証明被告的市场支配地位而进行深入分析、利用经济测试及提供充分证据的原告，包括需求替代测试、市场份额数据及专家证人等。法院是否和将如何接纳这些证据，尚有待对案件发展进行观察。

锐邦涌和科贸诉强生纵向价格垄断协议案

法院于其一审判决中，认定原告锐邦涌和科贸未能成功界定相关市场，并未能证明被告的市场支配力或其所诉的纵向协议具有限制竞争的效果，因此驳回原告的诉讼请求。这意味着法院将根据合理原则分析涉及维持最低转售价格的纵向协议，最高人民法院发布的首个司法解释也印证了这一点。该司法解释有别于之前的草案，删除了对《反垄断法》中明确规定的固定转售价格和限定转售最低价格的纵向协议具有限制竞争效果的推定。

6. 最高人民法院于5月4日，《反垄断法》实施四年后，为该法出台了首个司法解释 ─《关于审理因垄断行为引发的民事纠纷案件应用法律若干问题的规定》。规定对中国及外国企业有什么影响？规定澄清了《反垄断法》的什么事宜？什么问题仍不明确？

该司法解释适用于中国及外国企业，将促进中国反垄断私人诉讼的发展。司法解释明确了管辖权、案件受理及合并审理、各方承担的举证责任、委托专家証人和独立的专业机构、垄断纠纷的诉讼时效等事宜，但仍有不明确的地方，例如法院将如何对待反垄断执法机构认定的事实，以及被告是否可以在反垄断私人诉讼中使用转嫁抗辩。司法解释也未提及美国法院常采用的三倍损害赔偿规则。

到目前为止，中国法院尚未在任何垄断纠纷案件中判处原告胜诉，这主要是由于原告未能履行举证责任。减少对被告的违法推定，并采取补偿性的损害赔偿原则，可能降低法律原意保护的群体，尤其是个人，对涉嫌垄断行为提起诉讼的意愿。

7. 对于拟进行一项达到反垄断审查标准的并购交易的外国企业，您有什么具体建议？

外国企业应确保符合中国的反垄断审查制度：

• 为并购交易制定时间表：在交易构建及制定时间表时，应把中国反垄断审查放在考虑之列；

• 在申报前向商务部申请商谈。商务部可在制作申报文件、界定相关市场及判断潜在的竞争影响方面提供协助；

• 收集有关中国市场的信息。相关市场的竞争信息，如市场份额及竞争者等，通常难以从国家统计局等中国的公开渠道中获得，因此可能需要委托有资质的中国市场调查公司收集有关信息；

• 协调中国的反垄断审查及在其他司法管辖区的并购申报（如果有），如欧盟、美国等。

外国企业也应注意拟进行的并购交易是否达到国家安全审查的标准，这被视为是反垄断审查的补充机制。

8. 商务部严格监管并购交易。就您的经验，商务部在并购审查的过程中集中审查什么事宜？做法与其他竞争监管机构相比如何？

商务部通常着重审查并购各方在交易完成后的市场份额及相关市场的市场集中度。商务部熟悉单边效应、协调效应及封锁效应。这表示如果市场集中度高，而参与交易的经营者占有显著的市场份额，则商务部可能认为它们之间的交易会排除或限制市场竞争。商务部也会考虑新竞争者进入市场的可能性，并向其他政府机关、贸易协会及上游和下游经营者等第三方征求意见。多起案件的审查决定显示，商务部会参考其他外国竞争监管机关的决定及中国市场的特殊情况。这意味着，即使商务部就同一案件采用与其他成熟司法管辖区类似的审查方法，它也可能采取不同甚至更为严厉的救济措施，以减少交易对市场竞争的负面影响。在受到如美国、欧盟、日本及韩国等多个司法管辖区并购控制的跨国并购交易中，商务部通常是最后作出批准决定的机关。

9. 过去12个月，您处理了什么重大竞争案件？为何案件具挑战性？案件有否缔造先例？

其中一起反垄断审查案件涉及在中国注册成立一家合资企业，当时有关通用电气与中国神华的合资企业的决定还未公布，《反垄断法》及其配套规章也未明确规定一家合资企业在什么情况下属于经营者集中。因此，交易初期，在外方坚持向商务部申报且交易达到申报标准的情况下，中方依然主张回避申报程序。在向中方解释在中国成立合资企业的操作及不遵守有关程序可能导致的法律后果后，再通过和商务部事先沟通，中方最终同意申报该项交易。

10. 您认为竞争法及反垄断法及其执行将有什么重要发展？

针对商务部比其他并购审查机关需要花更长时间完成审查程序的普遍批评，中国可能很快将推出更快的审批程序，类似欧盟采用的简易申报表。另外，由于商务部继续通过多个渠道与欧盟及美国的监管机构合作，预计并购审查程序将更快速及更有效率。这些渠道包括中国与欧盟的竞争政策对话机制，以及与美国司法部及联邦贸易委员会于2011年签订的《反垄断和反托拉斯合作谅解备忘录》。

预计发改委与国家工商行政管理总局（“工商总局”）均会对限制竞争行为开展更多调查，并处以可能高达数百万元人民币的罚款。

司法解释生效后，预计将出现更多出于技术性或战略性目的，向具管辖权的法院提起的反垄断私人诉讼。

11. 如果您必须为外国客户就中国的竞争法制度提供一项具体意见，您的意见会是什么？

留意未来将颁布的实施细则，以及反垄断执法机构所公布的决定。企业面对反垄断相关问题时，应向外部律师寻求法律意见。