Following the implementation of the Anti-monopoly Law, with the approval of the State Council, the Ministry of Commerce established the Anti-monopoly Bureau.

As a result the Ministry of Commerce (MOFCOM), the National Development and Reform Commission (NDRC), and the State Administration for Industry and Commerce (SAIC) each established their respective organ, the Anti-monopoly Investigation Bureau, the Price Supervision Office, and the Anti-monopoly and Anti-unfair Competition Bureau to ensure enforcement of the Anti-monopoly Law.

Insiders believe that the structure of three authoritative bodies jointly enforcing the Anti-monopoly Law is now in place. This provides an important law enforcement mechanism for cracking down on monopolistic practices, safeguarding fair market competition and improving the market economy.

Newly established Anti-monopoly Bureau

The Anti-monopoly Bureau’s responsibilities are to examine concentrations of business operators, to provide information to Chinese enterprises on how to manage foreign anti-monopoly policies, and to enhance international exchanges and cooperation in the field of bilateral competition policies. It is also responsible for the day-to-day workings of the Anti-monopoly Committee of the State Council.

A MOFCOM official revealed that the Anti-monopoly Investigation Bureau will examine concentrations of business operators in mergers and acquisitions. Specifically, it will evaluate the degree of concentration and the benefits or damage to competition of such concentrations.

MOFCOM in charge of foreign investment approvals

“Concentrations of business operators” remains an ongoing concern. Jones Day Beijing Office (USA) has taken on scores of cases related to Chinese Anti-monopoly Law. All these cases have been put forward by transnational corporations, and their concern is about the regulation of “concentrations of business operators” in the Anti-monopoly Law.

The Anti-monopoly Law has been in effect for 20 days now. But this journalist has learned that many businesses still do not have a clear understanding of the kind of practices that may be considered to be a ‘concentration of business operators’. Huang Yong, one of the drafters of the Anti-monopoly Law told the reporter that the legislation does specify the criteria necessary to define a concentration of business operators.

The reporter has also learned that since August 1, mergers and acquisitions by foreign investors are now fully under Anti-monopoly Investigation Bureau regulation, without any NDRC involvement. For the last five years MOFCOM and SAIC have shared responsibility for mergers and acquisition by foreign investors. In the international anti-monopoly field, only China has two or more departments at the same level dealing with applications for mergers and acquisitions by foreign investors.

Concern about three joint enforcement bodies

The Anti-monopoly Law simplifies the procedure for approval of mergers and acquisitions by foreign investors. However, with the experience of one month’s operation, its tri-partite enforcement structure has raised a number of questions and concerns.

The new Anti-monopoly Law rules that MOFCOM, NDRC, SAIC share responsibility for enforcement of the Law.

“There are sure to be some conflicts in the enforcement of the Anti-monopoly Law,” Huang Yong told the reporter.

But for some experts, this law enforcement pattern is the best approach in the short term. “The ideal solution is to set up an independent authoritative law enforcement institution. But under the current administrative structure, this kind of institution is not yet feasible. In terms of the administrative structure, the best and most practical approach is to have the three institutions jointly enforce the Anti-monopoly Law,” Sheng Jiemin, Director of Peking University Law School told the reporter.

Zhang Yansheng, Director of the International Economic Research Institute under the NDRC, is also positive about the Anti-monopoly Law. He told the reporter that enforcement of the Anti-monopoly Law was a big step forward in improving the market economic system. The enforcement of this law will be an effective guarantee of fairness. But its crucial role is to create a sound law enforcement environment so as to create a fairer, more standardized and orderly market competition environment for the market, for businesses and for consumers. The authorization of the three institutions to enforce the Anti-monopoly Law provides an important law enforcement guarantee for cracking down on monopolistic practices, safeguarding fair market competition and improving the market economy.

(China.org.cn by Zhang Ming’ai, September 4, 2008)