The PRC’s MOC Concentration Rules: More Transparent but still Ambiguousby Edwin Zhiguo LiIn the 19 months implementation of the Anti-monopoly Law of the People’s Republic of China[1](“AML”), the Ministry of Commerce (“MOC”), the authority in charging of the concentration, promulgated the Rules for the Undertaking Concentration Notification (“the Notification Rule”) and the Rules for the Undertaking Concentration Examination (“the Examination Rule”, together with the Notification Rule as the Concentration Rules) respectively on 21 and 24 November 2009. The promulgation of the Concentration Rules shows the intent and effort of the Anti-monopoly Bureau (the department of the MOC responsible for anti-monopoly affairs, “AMB”) for the transparency, profession and efficiency.

　　The acquisition of Huiyuan by Coca-Cola [2](Coca-cola case) is regarded as the first concentration case reviewed by the AMB since the effectiveness of the AML as of 1 August 2008. The most recent concentration case published by the AMB is the acquisition of Sanyo by Panasonic [3](Panasonic case). The effort in the direction to the transparency, profession and efficiency is reflected from the simple notice of the Coca-Cola case to the more detailed Panasonic case. The Concentration Rules are also another input of the AMB to the implementation of the AML. Both the judge (AMB) and the player (undertakings) have the rules to abide by in its respective review and notification activities. These will dramatically reduce the time cost and the uncertainty on the deal for the undertakings in the acquisition. However, there are still some problems, such as the “controlling power”, when and who can initiate the hearing, left to be solved and clarified. This article will combine the Concentration Rules to present a clear clue for the undertakings being or to be involved concentration in China or with a China dimension.

　　1. Thresholds for notificationThe thresholds for notification is very important since they are the dominating factors for the undertakings (notifying party or notifying parties) and AMB to decide whether to initiate the notification and examination procedures. We can find those thresholds in the Regulations of the State Council on Thresholds for Notification of Undertakings’ Concentration promulgated by the State Council on 3 August 2008 (“the Thresholds Regulation”), which is one of the legal bases for the Concentration Rules and stipulates the thresholds for the notification of the concentration by the undertakings as the following (“the Thresholds”):

　　(1)　The aggregate worldwide turnover of all the undertakings concerned is more than RMB10 billion in the preceding financial year, and the aggregate China-wide turnover of each of at least two undertakings concerned is more than RMB400 million in the preceding financial year.

　　(2)　The aggregate China-wide turnover of all the undertakings concerned is more than　RMB2 billion in the preceding financial year, and the aggregate China-wide turnover of each of at least two undertakings concerned is more than RMB400 million in the preceding financial year.

　　The above thresholds are applicable to almost all the industries, excluding the special industries such as banking, insurance, securities and futures etc. (“the financial industries”). With the authorization by the State Council in the Thresholds Regulation, the MOC, the People’s Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission jointly promulgated the Measures for Calculation of Turnover of the Institutions in the Financial Industries for Concentration Notification on 15 July 2009 (“the Financial Thresholds Measures”) which inputs fund management companies in the financial industries and elaborates that the banking institutions include the financial institutions attracting deposits, for example commercial banks, urban credit union and rural credit union, etc., and the policy banks.