MOFCOM Strengthens Merger Control Law Enforcement

by K&L Gates LLP

On March 20, 2014, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) issued a press release announcing that, as of May 1, 2014, MOFCOM will make public on its website all decisions resulting in a finding that a company has failed to notify a reportable merger control event in breach of the Anti-Monopoly Law (effective August 1, 2008) (“AML”).

This new “name-and-shame approach” signals MOFCOM is determined to strengthen its enforcement mechanisms under the existing merger control regime and to further promote transparency. This follows the AML’s measures on investigating “concentrations” that came into effect on February 1, 2012 (the “Measures”), whereby MOFCOM is permitted to make public its decisions. Notably, MOFCOM also provided a dedicated fax number in the press release inviting “whistle-blowers” (being any corporation or individual) to report on any “suspected” breach of the AML in this regard. Under the Measures, MOFCOM is obliged to maintain the anonymity of the “whistle-blowers.”

Under the AML, a “concentration” is defined as (1) a merger of business operators, (2) the acquisition of control of a business operator by another business operator through the acquisition of equity or assets, or (3) the acquisition of control by a business operator of another business operator or the obtaining of decisive influence over another business operator by control or any other means. A joint venture between business operators in or outside of China can constitute a concentration.

A concentration must be notified to the Anti-Monopoly Bureau of MOFCOM if:

(1) the total turnover of all the parties involved in the concentration exceeds RMB10 billion (~US$1.6 billion) globally in the previous financial year, and each of at least two of the parties has sales in excess of RMB400 million (~US$65 million) in China in the previous financial year; or

(2) the aggregate sales of all parties involved in the concentration exceeds RMB2 billion (~US$320 million) in China in the previous financial year, and each of at least two of the parties has sales in excess of RMB400 million (~US$65 million) in China in the previous financial year.

Note: The thresholds apply in the case of offshore joint ventures where at least two of the joint venture parties satisfy the above criteria as applied on a “group basis”. In an acquisition scenario, the sales figures of the buyer and the target on a “group basis” will need to be assessed.

A reportable concentration must not be implemented before MOFCOM gives its clearance under the AML, which may impact the closing timetable for a Chinese or global deal. A “Phase 1” review lasts 30 days; a “Phase 2” review, if required, will last another 90 days; and a further “Phase 3” review of up to 60 days may be required under certain circumstances. The person responsible for filing is the buyer in an acquisition or any of a joint venture’s parties. Sanctions may include a fine of up to RMB500,000 (~US$80,000) and the unwinding of the concentration, if a reportable concentration is not reported in accordance with the AML. The indirect implications of being publicly “named and shamed” by MOFCOM, if any, will only become clearer with time.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© K&L Gates LLP | Attorney Advertising

Written by:

K&L Gates LLP

K&L Gates LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.