China plans to consolidate its three merger and antitrust agencies into a single body. What does this mean for dealmakers?
The ongoing evolution of China’s state ministries may have significant implications for dealmakers.
As part of a bureaucratic overhaul, a new antitrust regulator, the State Administration for Market Supervision (SAMS), is being introduced, essentially consolidating the three competition authorities China has today: The Anti-Monopoly Bureau of the Ministry of Commerce (MOFCOM), the Price Supervision/Inspection and Anti-Monopoly Bureau of the National Development and Reform Commission (NDRC), and the Anti-Monopoly and Anti-Unfair Competition Bureau of the State Administration of Industry and Commerce (SAIC).
Each existing Chinese authority has its own remit and responsibilities. MOFCOM oversees all mergers in the country, NDRC reviews anti-monopoly pricing conduct, and SAIC is responsible for any other anti-competitive conduct not related to pricing.
In practice, this separation of duties among the competition authorities has sometimes proved confounding. For example, if a company were to engage in anti-competitive behavior that involves both price-fixing and withholding patents, it could come under two separate investigations from the NDRC and SAIC, and face double punishments, all for a single violation.