No. 12 Decree [2009] of the Ministry of Commerce P.R.C. on Measures for the Undertaking Concentration Examination

No. 12 Decree of MOFCOM 2009

The Measures for the Undertaking Concentration Examination, which was deliberated and adopted in the No.26 executive meeting of the Ministry of Commerce on Jul.15, 2009, is hereby promulgated. It comes into force on Jan.1, 2010.

Minister: Chen Deming

Nov.24, 2009

Measures for the Undertaking Concentration Examination

Article 1 For the purpose of regulating the antimonopoly examination of undertaking concentration and clarifying the procedures for antimonopoly examination of undertaking concentration, the Measures are formulated in accordance with the Antimonopoly Law of the People’s Republic of China (hereinafter referred to as the Antimonopoly Law).

Article 2 The Ministry of Commerce (hereinafter referred to as MOFCOM) shall be the antimonopoly examination and law enforcement agent for undertaking concentration, responsible for specific law enforcement works concerning acceptance and examination of undertaking concentration declarations.

Article 3 After the MOFCOM accepts an application and before it makes any examination decision, if the declarer requests to withdraw its undertaking concentration declaration, it shall file an application in written form and make explanations. Except for the situation of abandonment of such concentration transaction, the withdrawal of declaration shall be subject to the consent of the MOFCOM.

  If an undertaking concentration declaration has been withdrawn, the examination procedures shall be terminated. The consent of the MOFCOM on withdrawal of such declaration shall not be deemed as approval of such concentration.

Article 4 During the examination process, the MOFCOM shall encourage a declarer to proactively submit any document and material helpful for the MOFCOM to make examination of and decisions on undertaking concentration as early as possible.

Article 5 During the examination process, the undertakings participating in concentration may make written statements and arguments concerning the relevant declaration issues by letter or fax, and the MOFCOM shall listen to the statements and arguments of the party concerned.

Article 6 During the examination process, the MOFCOM may take counsel with units or individuals including the relevant governmental departments, industrial associations, undertakings and consumers.

Article 7 During the examination process, the MOFCOM may hold hearings initiatively or as response to the request of the relevant parties, making investigations, collecting evidences and listening to the opinions of the relevant parties. When holding a hearing, the MOFCOM shall notify the participators of the hearing in written form in advance. If a participator of the hearing intends to produce a written opinion, it/he shall submit the opinion to the MOFCOM before the hearing.

  When holding a hearing, the MOFCOM may notify the undertakings participating in concentration and their competitors and enterprises in the upper and lower-stream industries as well as representatives from other relevant enterprises to attend the hearing, and may invite, as appropriate, relevant experts and representatives of industrial associations and relevant governmental departments as well as consumers.

  Participators of a hearing shall attend the hearing in time and follow the procedures of the hearing and arrangement of the chairman of the hearing.

  If a participator of a hearing wishes to make a separate statement for the purpose of keeping confidential business secrets, a separate hearing may be arranged. If such separate hearing is arranged, the contents of the hearing shall be treated according to the relevant confidential provisions.

Article 8 A hearing shall be held in accordance with the following procedures:

(1)    The chairman of the hearing announces commencement and reads out the disciplines to be followed in the hearing;

(2)    The participators of the hearing are checked;

(3)    Participators make statements on issues raised in the hearing;

(4)    The chairman of the hearing consults the relevant participators with respect to issues raised in the hearing; and

(5)    The chairman of the hearing announces end of the hearing.

Article 9 At the primary examination stage, the MOFCOM shall make a decision on whether to execute further examinations within the time limit as provided in Article 25 of the Antimonopoly Law. If the MOFCOM makes the decision that no further examination will be executed, it shall notify the declarer in written form; while if it holds it is necessary to make further examinations, it shall make the decision on further examination and notify the declarer in written form.

  If the MOFCOM makes the decision that no further examination will be executed or fails to make any decision within the prescribed time limit, the undertakings participating in concentration may execute the concentration.

Article 10 At the further examination stage, if the MOFCOM holds the undertaking concentration will or may lead to preclude or restrict competition, it shall notify the undertakings participating in concentration about its opposite opinion, and provide a reasonable time limit allowing the undertakings participating in concentration to submit their defenses in written form.

  The written defenses of the undertakings participating in concentration shall include the relevant facts and reasons, and the relevant evidences shall be produced. The failure of the undertakings participating in concentration to provide their defenses within the time limit shall be deemed as no demurrer to the opposite opinion.

Article 11 During the examination process, in order to eliminate or reduce the effects of precluding and restricting competition that will or may be resulted from such undertaking concentration, the undertakings participating in concentration may provide restrictive conditions by adjusting the concentration transaction plan.

  According to the specific conditions of the undertaking concentration transaction, such restrictive conditions may include the following types:

(1)     Structural conditions including stripping of partial assets or business of the undertakings participating in concentration;

(2)     Behavioral conditions including granting access to such infrastructures as network or platform, licensing of key technologies (including patents, proprietary techniques or other intellectual property rights) and termination of exclusive agreements by the undertakings participating in concentration; or

(3)     Hybrid conditions that combine structural conditions and behavioral conditions.

Article 12 The restrictive conditions proposed by undertakings participating in concentration shall be able to eliminate or reduce the effects of precluding and restricting competition that will or may be resulted from undertaking concentration and shall be feasible. The text of the restrictive conditions shall be clear and definite enough to evaluate their effectiveness and feasibility.

Article 13 During the examination process, in order to eliminate or reduce the effects of precluding and restricting competition that will or may be resulted from such undertaking concentration, both the MOFCOM and the undertakings participating in concentration may make opinions and advices on amendment of the restrictive conditions.

Article 14 The MOFCOM shall make a decision on whether to prohibit an undertaking concentration or not within the time limit as prescribed in Article 26 of the Antimonopoly Law and notify the declarer in written form. With respect to undertaking concentration not to be prohibited, the MOFCOM may decide whether to impose restrictive conditions to reduce the impacts of concentration on competition or not. Before the MOFCOM makes a decision whether to conduct further examinations, undertakings participating in concentration shall not execute concentration.

  If the MOFCOM makes the decision not to prohibit such undertaking concentration or fails to may any decision, the undertakings participating in concentration may execute concentration.

Article 15 As for the undertaking concentration approved with additional conditions, the MOFCOM shall make examination and supervision of the behaviors of the undertakings participating in concentration with respect to implementation of such restrictive conditions. The undertakings participating in concentration shall report its implementation of such restrictive conditions to the MOFCOM according to the prescribed schedule.

  If any undertaking participating in concentration fails to perform its obligations in accordance with the restrictive conditions, the MOFCOM may order it to make correction within a time limit; and if the undertaking fails to make correction within the prescribed time limit, the MOFCOM may handle the issue in accordance with the relevant provisions of the Antimonopoly Law.

Article 16 The MOFCOM, a declarer and other units and individuals shall assume the obligation of keeping confidential business secrets known to them during examination of undertaking concentration as well as other information that shall be kept secret.

Article 17 The Measures herein comes into force on Jan.1, 2010.