On February 11, 2014, the Ministry of Commerce (MOC) promulgated the Tentative Provisions on Standards Applicable to Simple Cases of Concentration of Business Operators (the Tentative Provisions), which became effective February 12, 2014.

Under the PRC Anti-Monopoly Law, the concentration of business operators that meets certain standards shall be subject to a filing and review procedure with the Anti-monopoly Bureau of MOC (the Bureau). Under the common review procedure, the Bureau shall conduct Phase I review of the filing within 30 days upon submission of application and will inform the business operator in writing as regards to whether the concentration is subject to further review; and, in the event that the Bureau decides to conduct further review (the Phase II review), such review should be completed within 90 days of such decision except that under special circumstances, the Phase II review could be extended to up to another 60 days tolling from delivery of a notice to the business operators. Therefore, under the common filing procedure, the maximum time frame from submitting the filing documents to receiving the decision from the Bureau can be as long as 180 days.

Compared to the common review procedure, the summary review procedure, as applicable to a simple case as clarified under the Tentative Provisions will shorten the time of the review to as short as 30 days or less, and accordingly lower the filing burden for business operators participating in a certain concentration.

Standards for Simple Cases

The Tentative Provisions provide that the following concentration cases qualify as simple cases (subject to the exceptions described in the next section):

• Horizontal concentration cases in which the aggregate market share of all the business operators participating in the concentration is less than 15 percent;

• Vertical concentration cases in which the market share of each business operators accounts for less than 25 percent in its respective upstream or downstream market;

• Cases in which the business operators participating in the concentration do not operate in the same relevant market nor have any vertical relationship, and each operator holds less than 25 percent in its market relevant to the transaction;

• Cases in which business operators participating in the concentration establish a joint venture outside of China, and the joint venture does not engage in any economic activities within China;

• Cases in which the business operators participating in the concentration acquire the equities or assets of overseas enterprises, and the overseas enterprises do not engage in any economic activities in China; and

• Cases in which the joint venture jointly controlled by more than two business operators is controlled through concentration by one or more of such business operators.

Exceptions

Under the Tentative Provisions, even if the above standards for simple cases are met, under certain circumstances, the concentration will not be treated as a simple case. The special circumstances include (but not limited to) (i) the difficulty in defining the relevant market for the concentration, and (ii) the potential adverse effect on market access, consumers, other operators, or the national economic development.

In addition, MOC has the discretion to revoke its decision to treat a concentration as a simple case if evidence indicates untruthful filing materials, the effect of eliminating or restricting competition, or material change in the concentration or the competition in the relevant market.