Business Alert - China
The Ministry of Commerce (MOFCOM) is preparing to set up an anti-monopoly investigation bureau ahead of the implementation of the Anti-Monopoly Law on 1 August 2008. The new bureau will act as an enforcement authority tasked with examining the concentration of business operators in mergers and acquisitions of domestic enterprises by foreign investors.
The bureau will be located on the same premises of MOFCOM. However, its official name and personnel structure are yet to be finalised. In tandem with the establishment of the new bureau, the National Development and Reform Commission and State Administration for Industry and Commerce will also set up new departments to examine "monopoly prices" and the "abuse of dominant market position" under the new law.
MOFCOM will adopt new procedures in line with the new law in examining the concentration of business operators after 1 August. When the concentration under a proposed merger reaches a reporting threshold in terms of business turnover, the business operators must notify MOFCOM and will enter a 30-day first-phase examination period. The examination will be carried out in accordance with the criteria prescribed in Article 27 of the Anti-Monopoly Law.
The Anti-Monopoly Law was passed in August 2007. However, controversial state-owned monopolies were exempted to ensure the smooth passage of this law. As the date of implementation draws near, who is going to be the first defendant after the new law takes effect has become an issue of common concern in business circles.
Mainland media reported in mid-June that State Intellectual Property Office officials were joining hands with research institutions in conducting an anti-trust probe into Microsoft's business practices in China and may organise affected enterprises to instigate anti-trust proceedings against Microsoft after the Anti-Monopoly Law goes into force on 1 August. However, this news was subsequently denied by the departments concerned.