Understanding the PRC anti-monopoly regime

1. What have been the key changes in legislation affecting competition over the past 12 months and how did they affect the competition regime

During the past year, the most important legislation in terms of regulating business operator concentrations has been the Tentative Provisions on the Criteria Applicable to Simple Cases of Concentrations of Business Operators and the complementary regulations, the Guiding Opinions on the Filing for Simple Cases of Concentrations of Business Operators, as well as the amended Guiding Opinions on the Filing for Concentrations of Business Operators. In terms of administrative law enforcement, the State Administration for Industry and Commerce (SAIC) has recently issued the Provisions for the Prohibition of the Abuse of Intellectual Property to Eliminate or Restrict Competition by Administrations for Industry and Commerce (Draft for Comments) so as to specify acts of abusing intellectual property to eliminate or restrict competition, better guide anti-monopoly administrative law enforcement and enhance the predictability of business operators' own business activities.

(1) Issuance of provisions relating to filings for simple cases of business operator concentrations

Since the implementation of the Anti-monopoly Law in 2008, the number of business operator concentration cases reviewed by the Ministry of Commerce (MOFCOM) has seen a large increase from year to year. According to its figures, as at the end of 2013, MOFCOM had received a total of 866 business operator concentration filings, opening 797 cases and concluding 740 cases. The contradictory relationship between the limited human resources of the anti-monopoly department and the rapidly growing number of filing cases has grown ever more acute. Furthermore, among the close to 800 cases mentioned above, “the great majority do not harm competition, and those that are genuinely problematic only account for a small number.” Against such a background, MOFCOM, from 2012, began to study and prepare to issue provisions for filings for simple business operator concentration cases so as to enhance law enforcement efficiency and reduce the burden on enterprises. To date, there have already been several cases for which the simple case filing has been announced.

(2) Amendment of the guiding opinions on business operator concentration filings

On June 6 2014, MOFCOM issued the most recently amended Guiding Opinions on the Filing for Concentrations of Business Operators. These summarise law enforcement experience in the five or so years since the implementation of the Anti-monopoly Law, give an explanation concerning the determination of control, clarify whether newly established joint ventures are required to make a filing, specify the means of dealing with certain special matters when calculating turnover and address numerous other issues that are currently not expressly provided for in law, thereby providing greater guidance to filing parties on the filing procedure.

(3) Administration for Industry and Commerce issues draft for comment of regulations prohibiting the abuse of intellectual property to eliminate or restrict competition

On June 11, the SAIC issued an announcement seeking public comments on the Provisions for the Prohibition of the Abuse of Intellectual Property to Eliminate or Restrict Competition by Administrations for Industry and Commerce (Draft for Comments). Firstly, the Draft clarifies the relationship between anti-monopoly law and the protection of intellectual property and expressly sets forth several instances of abuse of intellectual property to eliminate or restrict competition, including such specific abuses commonly seen in practice as refusing to license intellectual property that serves as necessary facilities, placing restrictions on trading, tie-in sales, setting of unreasonable trading conditions, discriminatory treatment, etc. Furthermore, they specify whether four specific ways of exercising intellectual property rights constitute relevant monopolistic acts, e.g. patent pools, the exercise of patent rights in the formulation and implementation of standards, collective copyright management organisations and the indiscriminate issuance of letters of warning of intellectual property infringement. Lastly, the Draft sets forth the analysis principles and framework for anti-monopoly law enforcement in the field of intellectual property by administrations for industry and commerce. The foregoing provisions clarify the methods of law enforcement of administrations for industry and commerce, and while increasing the practicability of law enforcement, they are also conducive to increasing the transparency of law enforcement, provide reference to business operators for self assessments and are conducive to encouraging business operators to promote and spread technology.

2. In particular, how do the Simple Cases Provisions published by MOFCOM on February 11 contribute to progress of the regime

The appearance of the simple filing procedure for business operator concentrations has simplified to a certain extent the materials that need to be submitted for the filing for a business operator concentration, e.g. the filing party is not required to provide supply and demand information on the relevant products or submit the business licences and foreign investment approval certificates of all of its affiliates in China. To this extent, the burden of document collection on the filing party is reduced as is the number of documents that MOFCOM is required to review, thereby increasing the efficiency of the filing for business operator concentrations. However, it should also be noted that there is a certain degree of uncertainty attached to the filing for simple cases of business operator concentrations. Firstly, the Guiding Opinions do not place a time limit on the review of transactions by MOFCOM. Secondly, the Guiding Opinions set forth a system of refiling for cases that ought not to have been deemed simple cases, which could result in the time spent in some cases filed in accordance with the simple procedure exceeding that for cases directly filed in accordance with the regular procedure.

3. What developments do you expect to see in the next 12 months and how will any of these developments change the competition landscape

Firstly, we anticipate that in the coming 12 months, the simple procedure will be opted for by a greater number of business operator concentration transactions. This will mean greater efficiency in the reviewing of business operator concentrations.

Furthermore, the activity level in anti-monopoly administrative law enforcement will remain unchanged, with vertical monopolistic agreements, cartels and acts relating to the abuse of intellectual prop­erty probably remaining the focus of law enforcement. With respect to MOFCOM, it may intensify its investigation and handling of cases where a filing should have been carried out but wasn't.

4. Over the past 12 months, do you believe the Anti-monopoly Law has been applied fairly to both domestic and foreign businesses

Objectively speaking, the implementation of China's Anti-monopoly Law continues in the style of last year, essentially achieving “equality of domestic and foreign.” For example, the Anti-monopoly Bureau of MOFCOM recently rendered a decision to impose penalties on China's famous dairy enterprise, Mengniu Group, for its failure to carry out a filing, in accordance with the law, concerning its acquisition of Yashili. In August 2013, the Shanghai Municipal Pricing Bureau rendered a decision imposing penalties regarding the pricing monopoly involving the Shanghai Gold & Jewellery Trade Association and certain gold jewellery and ornament stores. In December 2013, the SAIC authorised the Guangdong Provincial Administration for Industry and Commerce to investigate and impose penalties on Huizhou Dayabay Yiyuan Purified Water Limited for abusing its dominant market position.

5. What are some of the highlights of the year in regard to AML cases How do these help in understanding how the AML applies and develops

From some of the key cases investigated and handled by the major anti-monopoly law enforcement agencies in the past year it can be seen that the various law enforcement agencies are placing greater importance on instances of abusing intellectual property to eliminate or restrict competition. If it can be said that, in the first few years after the issuance of the Anti-monopoly Law, China's anti-monopoly law enforcement agencies were in a learning phase, particularly in clarifying the complex relationship between the protection of intellectual property and anti-monopoly law enforcement, China's anti-monopoly law enforcement agencies have, in recent years, through continuous judicial practice and the exchange of expertise with foreign law enforcement agencies, progressively gained the confidence that they can duly handle cases involving the abuse of intellectual property to eliminate or restrict competition. The intellectual property and anti-monopoly cases in the past year that are relatively significant and drew the attention of the industry include the following:

(1) MOFCOM's conditional approval of Merck's acquisition of AZ Electronic Materials, requiring that when Merck licenses liquid crystal patents, it does so on the basis of non-exclusive and non-sublicensing terms. All terms will adhere to commercially reasonable and non-discriminatory principles.

(2) MOFCOM's conditional approval of Microsoft's acquisition of the Nokia Devices and Services business, requiring Microsoft, in respect of its standard-essential patents, to continue to observe its commitments given to standard setting organisations in licensing its standard-essential patents on a fair, reasonable and non-discriminatory basis, not to seek injunctions or exclusion orders against the smart handsets manufactured by smart handset makers in China and not require licensees to license back their patents to Microsoft.

(3) With respect to the NDRC, based on tips provided by the relevant industry associations and enterprises, it conducted anti-monopoly investigations of Qualcomm and InterDigital (IDC), the two companies being accused of charging overly high patent royalties to Chinese enterprises, discriminatory pricing when charging patent royalties and setting unreasonable trading conditions. Now, as IDC has given the NDRC a series of undertakings concerning its intellectual property licensing, the NDRC has suspended the investigation procedure; but it is continuing its investigation of Qualcomm.

(4) The SAIC also recently disclosed that it is currently investigating its first ever Anti-monopoly Law enforcement related intellectual property case.

In addition to the various law enforcement agencies paying increasingly greater attention to intellectual property related cases in the last year, from MOFCOM's conditional approval of Thermo­Fisher Scientific's acquisition of Life Technologies it can be seen that the cooperation between the Chinese and anti-monopoly enforce­ment agencies and foreign anti-monopoly law enforcement agencies is growing closer. In the above mentioned case, MOFCOM coop­erated with the European Commission and the anti-monopoly law enforcement agencies of other jurisdictions in jointly considering and formulating relevant remedy schemes, being regarded as a milestone on the road to law enforcement cooperation between international anti-monopoly law enforcement agencies.

6. What is being done so that the AML enforcement authorities can keep up with their rapidly-increasing workload

As mentioned above, MOFCOM, in an effort to prevent limited human and physical resources from being poured into business operator concentration cases that have a minimal or insignificant effect on the domestic market, issued the Tentative Provisions on the Criteria Applicable to Simple Cases of Concentrations of Business Operators and the complementary regulations, the Guiding Opinions on the Filing for Simple Cases of Concentrations of Business Operators, so as to enhance work efficiency.

Due to the difference in the nature of its work, the NDRC has sought to resolve this problem by increasing the number of law enforce­ment officers and mobilising the coordination and cooperation of the provincial-level pricing bureau.

As for the SAIC, it has gone for the approach of authorising provincial-level administrations for industry and commerce to conduct anti-monopoly investigations while the central authorities are respon­sible for coordination and arrangement.

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

Do not ignore the impact that a China review of a business operator concentration could have on the transaction.

As in the great majority of jurisdictions, business operator concen­tration reviews in China take the form of advance filing. That is to say, that transactions that require a filing may not be carried out until a review approval decision has been secured. As the time required for regular case reviews in China is relatively long, and there are numerous uncertainties involved in simple case reviews, we have repeatedly seen transactions being postponed due to the business operator concentra­tion failing to pass the China review, causing a certain degree of impact on the companies. At the stage of carrying out the feasibility assessment of an acquisition transaction, it is recommended that an enterprise consider the review requirements for business operator concentrations in the various jurisdictions, including China.

8. MOFCOM closely scrutinises M&A transactions, especially those that threaten competition. What does it focus on during merger review and how do its practices compare with other competition regulators

MOFCOM will first pay particular attention to mergers between enterprises that have a relatively large market share. When considering the impact on market competition, it will, like the competition law enforcement agencies of other countries, consider the horizontal and vertical overlaps between enterprises in the relevant product market and the impact on other enterprises wishing to enter the relevant market, while additionally considering the special circumstances of the China market. Last year, in certain cases where unconditional approvals were secured in other jurisdictions, MOFCOM imposed restrictive conditions in China, e.g. Merck's acquisition of AZ Electronic Materials and Microsoft's acquisition of the Nokia Devices and Services business.

Accordingly, with respect to those transactions that require global filings, despite the fact that the anti-monopoly legal frameworks of various jurisdictions have a certain degree of uniformity, the special character of the China market may lead MOFCOM to render deci­sions that differ from those of the law enforcement agencies of other jurisdictions. It is therefore necessary, on the basis of the overall global plan, to prepare a dedicated plan for the filing in China.

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

During the past year, both the number and depth of reviews of the anti-price monopoly administrative investigations of the NDRC and the other anti-monopoly administrative investigations of the SAIC have seen unprecedented increases. We acted for many clients in responding to and cooperating with the investigations of the competent authorities.

Although anti-monopoly administrative investigations in China got their start relatively late, China's anti-monopoly law enforcement agen­cies do not fall behind the competent authorities of other jurisdictions in terms of investigative expertise or investigative means. Accordingly, companies should attach greater importance to anti-monopoly law compliance in China. Companies should establish sound compliance policies and timely formulate rational investigation response plans in order to control their non-compliance risks and reduce the losses arising from violations of the law.

1. 过去12个月，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？

过去一年里，在经营者集中规制方面，最重要的立法为《关于经营者集中简易案件适用标准的暂行规定》及其配套法规《关于经营者集中简易案件申报的指导意见（试行）》的发布，以及《关于经营者集中申报的指导意见》新修订版的发布。在行政执法方面，国家工商总局近日发布了《工商行政管理机关禁止滥用知识产权排除、限制竞争行为的规定（征求意见稿）》，以明确滥用知识产权排除、限制竞争的行为，更好的指导反垄断行政执法，增强经营者对自身经营活动的预期性。

(1) 关于经营者集中简易案件申报相关规定的出台

自2008年《反垄断法》实行以来，商务部审查的经营者集中案件逐年大幅上升。据商务部统计，截至2013年底，商务部共收到经营者集中申报866件，其中立案797件，审结740件。反垄断部门有限的人力资源与快速增长的申报案件数量之间的矛盾关系越来越剧烈。而在上述近八百个案件中，“绝大多数案件对竞争没有损害，真正有问题的只是少数案件”。在这种背景情况下， 为提高执法效率，减轻企业负担，商务部从2012年开始，便研究并准备出台经营者集中简易案件申报的规定。目前，已经有多起案件进行了简易案件申报公示。

(2) 关于经营者集中申报的指导意见的修订

2014年6月6日，商务部发布了最新修订的《关于经营者集中申报的指导意见》。该意见总结《反垄断法》实施五年多来的执法经验，对控制权的认定作出了解释，明确了新设合营企业是否需要申报，规定了在营业额计算中一些特殊情况的处理方式，还对于许多其他目前无法律明文规定的问题作出了规定，在申报程序上给申报方带来了更多指引。

(3) 工商机关发布禁止滥用知识产权排除、限制竞争行为规定的征求意见稿

国家工商总局于6月11日发布公告，就《工商行政管理机关禁止滥用知识产权排除、限制竞争行为的规定（征求意见稿）》向社会公开征求意见。该征求意见稿首先明确了反垄断法与知识产权保护之间的关系，明确规定了几种滥用知识产权排除、限制竞争的行为，其中包括拒绝许可作为必要设施的知识产权、限定交易行为、搭售、附加不合理交易条件、实行差别待遇等实践中较为常见的几种具体滥用行为。另外，还规定了四种特定类型的行使知识产权行为是否构成相关垄断行为，如专利联营、标准制定和实施中的行使专利权行为、著作权集体管理组织以及滥发知识产权侵权警告函等。最后，征求意见稿中，还规定了工商机关在知识产权领域反垄断执法的分析原则和框架。以上规定，明确了工商机关的执法方法，增加了执法的可操作性的同时，也有利于提高执法透明度，为经营者自我评估提供参考，有利于鼓励经营者进行技术推广和传播。

2. 商务部于2月8日发布的简易案件规定本身对竞争法制度的发展有什么贡献？

经营者集中申报简易程序的出台在一定程度上简化了经营者集中申报所要提交材料，如申报方无需提交相关产品的供需情况，也无需提交其在中国的所有关联公司的营业执照和外商投资批准证书等。这在一定程度上，减轻了申报方资料收集的负担，也减少了商务部所需审阅的文件数量，提高经营者集中申报效率。但是，我们也应该注意到，在经营者集中简易案件申报存在一定的不确定性。首先，该指导意见并没有对商务部对交易的审查过程做出时间上的限制。其次，该指导意见规定了不应认定为简易案件的案件重新申报制度，可能会导致某些按照简易程序申报的案件在程序上要比直接按非简易案件花费更多的时间。

3.在未来12个月内，您预计将有什么新发展？这些新发展如何影响竞争环境？

首先，在未来的十二个月里，我们预计会有更多的经营者集中交易选择适用简易案件申报程序。经营者集中审查工作能够更有效率地进行。

另外，反垄断行政执法工作会保持目前的活跃状态，纵向垄断协议、卡特尔和与知识产权滥用相关的行为很可能仍将是执法的重点。商务部方面，可能会对于经营者集中应报未报的情况加大查处力度。

4. 从过去12个月来看，您认为《反垄断法》是否对中国和外资企业同等看待？

客观来讲，中国《反垄断法》的执行延续去年的作风，基本做到了“中外平等”。比如，近日，由于中国著名乳企蒙牛集团未对其收购雅士利的交易依法进行申报，商务部反垄断局对蒙牛集团做出了处罚决定。2013年8月，上海市物价局对上海黄金饰品行业协会及部分金店的价格垄断行为做出了处罚决定；2013年12月，国家工商行政管理总局授权广东省工商行政管理局调查并处罚的惠州大亚湾溢源净水有限公司滥用市场支配地位案等。

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》的适用和发展？

在过去一年里，从《反垄断法》各大执法机关所查处的几个重要案子中可以看出，各执法机关对滥用知识产权排除、限制竞争的情形越来越重视。如果说在《反垄断法》刚刚出台的几年里，中国反垄断法执法机关还处于一个学习的阶段，尤其是对于知识产权保护和反垄断法执法的复杂关系的厘清，那么近年来，通过不断地司法实践以及与国外执法机构经验交流，中国反垄断法执法机构越来越有信心能够处理好滥用知识产权排除、限制竞争的案件。过去一年里，比较重要的、引起业界关注的知识产权与反垄断案件有：

(1) 商务部附条件批准默克公司收购安智电子材料公司，要求当默克许可液晶专利时，基于非排他性的、不得转许可的条款实施。所有条款均将遵守商业上合理的、非歧视性的原则。

(2) 商务部附加限制性条件批准微软收购诺基亚设备和服务业务，要求微软对其持有的标准必要专利，持续遵守其向标准制定组织作出的承诺，在公平、合理和无歧视条件下许可其标准必要专利；不寻求针对中国境内智能手机制造企业所制造的智能手机的禁令或排除令；不得要求被许可人回授其专利等。

(3) 发改委方面，根据有关行业协会和企业的举报，其对美国高通公司和美国交互数字公司（即InterDigital，下称IDC）进行了反垄断调查，两家公司被指控对中国企业收取过高的专利许可费、在收取专利许可费时歧视性定价以及附加不合理交易条件。目前，由于IDC向发改委做出了一系列有关其知识产权许可的承诺，对其的调查程序已经中止；而发改委针对高通的调查仍在继续当中。

(4) 工商总局也于近日透露工商总局《反垄断法》执法史上第一起与知识产权有关的案子正在调查当中。

近一年来，各执法机关除了对上述与知识产权有关的案子的关注度越来越高，从商务部附加限制性条件批准赛默飞世尔科技公司收购立菲技术公司案中也可以看出，中国反垄断执法机构与国外反垄断执法机构的合作也越来越密切。在该案中商务部与欧盟委员会等其他司法辖区的反垄断法执法机构合作，共同研究并制定相关救济方案，被认为是国际反垄断法执法机构合作执法道路上的一座里程碑。

6. 目前，反垄断执法机关做出了什么措施，使其能应对剧增的工作量？

如上所述，商务部为了避免将有限的人力、物力投入在对国内市场几乎没有影响或影响不大的经营集中案件上，而先后出台了《关于经营者集中简易案件适用标准的暂行规定》及其配套法规《关于经营者集中简易案件申报的指导意见（试行）》，以提高工作效率。

发改委，由于工作性质的不同，而意图通过增加执法人员数量、调动省级物价局协调配合的方式来解决这一难题。

而工商总局则选择更多地通过授权省级工商局进行反垄断调查、中央统筹安排的方式。

7. 对于拟进行引致反垄断审查的并购交易的外国企业，您有什么具体建议？

不要忽略中国经营者集中审查对于交易的影响。

如大多数司法辖区一样，中国的经营者集中审查采取事先申报的形式。也就是说，需要进行申报的交易在取得审查批准决定以前，是不得实施的。由于中国非简易案件审查的时间比较长，而简易案件审查有存在诸多不确定性，因此我们看到有许多交易由于中国经营者集中审查没有通过而屡屡延期，对于公司造成了一定程度的影响。企业在进行并购交易可行性评价的阶段，最好就能够将包括中国在内的各司法辖区经营者集中审查要求考虑在内。

8. 商务部严格监管并购交易，尤其是那些对竞争带来威胁的。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？

商务部首先会尤其关注市场份额较高的企业之间的合并情况。在考虑对市场竞争的影响的时候，除了会与其他国家竞争执法机构一样，考虑在相关产品市场上，企业之间的横向重迭与纵向重迭，以及对其他企业进入相关市场的影响等情况，商务部还会考虑中国市场的特殊情况。去年部分在其他司法辖区获得了无条件批准的案件被商务部附加了限制性条件，例如默克公司收购安智电子材料公司案，微软收购诺基亚的设备与服务部门案等。

因此，对于那些需要进行全球申报的交易，尽管各司法辖区的反垄断法规框架有一定的一致性，但是中国市场的特殊性可能会导致商务部作出与其他司法辖区执法机构不同的决定。因此，在进行全球整体规划的基础上，仍然应当对于中国的申报做出有针对性的规划。

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？案件有什么独特、有否缔造先例？

在过去的一年里，不论是发改委的反价格垄断行政调查，还是工商总局的其他反垄断行政调查在数量和审查深度上都有了前所未有的提升。我们代理多家客户应对和配合主管机关的调查。

中国反垄断行政调查虽然起步较晚，但是中国反垄断执法机构在调查经验和调查手段方面并不落后于其他司法辖区的主管机关。因此公司应当提高对于中国的反垄断法合规的重视程度。为了控制公司的违规风险，降低违法导致的损失，公司应当建立完善的合规政策，并应当及时制定合理的调查应对方案。