Original title: The threshold for mergers and acquisitions of giants with revenues exceeding 100 billion has been raised to 6 anti-monopoly supporting regulations for comments
With the promulgation of the new anti-monopoly law, on June 27, the State Administration for Market Regulation released six drafts of supporting regulations for the anti-monopoly law and drafting instructions.These include the "Regulations of the State Council on the Declaration Standards for Concentration of Undertakings (Draft for Comments)" and "Regulations on the Examination of Concentrations of Undertakings (Draft for Comments)".
The review of the concentration of business operators is the prior control of the concentration of business operators such as business mergers and acquisitions by anti-monopoly law enforcement agencies.In practice, the "hunt-and-kill" mergers and acquisitions of some giant companies have caused widespread controversy. The anti-monopoly review system for concentration of operators aims to maintain a reasonable market structure, prevent excessive concentration of market power, and suppress the problem of eliminating and restricting competition in the bud.
According to the two drafts released this time, the standard for declaration of concentration of business operators is planned to be improved. For enterprises with a turnover of more than 100 billion yuan in China to carry out concentration of business operators, those that meet certain conditions will be included in the scope of review; additional restrictive conditions will be enriched. Including data stripping into structural conditions, including maintaining independence, modifying platform rules or algorithms, and not reducing interoperability into behavioral conditions.
Revise the declaration standard to reduce the institutional transaction cost of enterprises
This revision of the Anti-Monopoly Law has made significant changes to the review system for concentration of undertakings, and incorporated the provisions previously scattered in other regulations and policy documents into the Anti-Monopoly Law.
The standard for declaration of concentration of undertakings is the threshold of the anti-monopoly review system for concentration of undertakings.The declaration standards need to match the level of economic development and market competition in the country or region, and strike a balance between eliminating potential competition problems and reducing the burden on enterprises.
The State Administration for Market Regulation has drafted the "Regulations of the State Council on the Declaration Standards for Concentration of Undertakings (Revision Draft for Comment)". The main contents of the revision are as follows: First, to improve the turnover standard, and to increase the total turnover in the world, the total turnover in China and the total turnover in China. The requirement for unilateral turnover in China has been raised from the current 10 billion, 2 billion and 400 million yuan to 12 billion yuan, 4 billion yuan and 800 million yuan respectively. Concentrations of operators below this standard do not need to be declared in principle. It improves the scientificity and accuracy of the review of the concentration of operators, and reduces the institutional transaction cost of enterprises.After the turnover standard is raised, it will effectively reduce the number of small and medium-sized merger and acquisition declarations, which will help create a market-oriented, law-based and international business environment. Various market players, especially small and medium-sized enterprises, will have a broader space for development.
The second is to optimize the application standards. For enterprises with a turnover of more than 100 billion yuan in China to carry out concentration of operators, those that meet certain conditions will be included in the scope of review.In addition to business, the market value (valuation) of the acquiree is introduced to reflect its market potential, and special provisions are made on the criteria for the identification of acquirers to protect the innovation vitality of market players.
According to the reporting and review of cases, large enterprises generally have stronger market power. Compared with small and medium-sized operators, their concentration behavior has or may have the effect of eliminating or restricting competition.At the same time, it is also in line with the international trend to pay attention to the mergers and acquisitions of large enterprises.The threshold for declaration of concentration by large enterprises is stipulated, and competition analysis is carried out according to law. For concentrations that have or may have the effect of eliminating or restricting competition, the concentration review system can effectively prevent the occurrence of monopolistic market structures in advance, and reduce the impact of concentration on competition. adverse effects and enhance the accuracy and effectiveness of antitrust governance.
The third is to support the revision of the Anti-Monopoly Law, and make corresponding provisions for the concentration that fails to meet the reporting standards but meets the relevant circumstances of the Anti-Monopoly Law.
Wei Shilin, deputy director of the Competition Law Professional Committee of the Beijing Intellectual Property Law Research Association, said, "With the continuous development of the national economy, raising the turnover standard can reduce the burden on enterprises on the one hand, and the concentration of operators below this standard does not need to be declared in principle; Law enforcement agencies can also improve the efficiency of law enforcement and better focus law enforcement resources on key cases. After optimizing the reporting standards, law enforcement agencies can more accurately screen out companies that should be reported and need to be focused on, and are more targeted.”
Data Stripping Incorporates Structural Conditions
According to the announcement of the State Administration for Market Regulation, in support of the new Anti-Monopoly Law, the State Administration for Market Regulation revised the Interim Regulations on the Review of the Concentration of Undertakings and formed the Regulations on the Examination of the Concentration of Undertakings (Draft for Comment).
The new Anti-Monopoly Law puts forward higher requirements for further improving the review system for concentration of undertakings, including improving the classification and grading review system for concentration of undertakings, adding a system for stopping the clock for concentration of undertakings, improving the review and investigation of concentrations of undertakings that do not meet the reporting standards, Strengthen the legal responsibility for the illegal implementation of the concentration of business operators.The "Regulations on the Review of Concentration of Undertakings (Draft for Comment)", as a supporting regulation, implements the relevant requirements of the new Anti-Monopoly Law through revisions, in order to provide market players with a fair, transparent and predictable institutional environment.The amendments mainly involve six aspects: the suspension system of the review period for the concentration of undertakings, the review and investigation of the concentration of undertakings that do not meet the reporting standards, the illegal implementation of the investigation of the concentration of undertakings, the substantive standards and procedural regulations, the improvement of the quality and efficiency of the review, and the legal responsibility. .
About the suspension system of the time limit for the examination of concentration of business operators.According to the relevant provisions of the new Anti-Monopoly Law, the Provisions on the Review of Business Operator Concentration (Draft for Comment) is intended to formulate detailed rules such as start-up conditions, resumption conditions and applicable procedures for the three situations in which the period for suspending the calculation of the review period for the concentration of business operators is applicable.Wei Shilin said, "The stop-bell system puts forward higher time control requirements for corporate mergers and acquisitions, and for law enforcement agencies, there is a clearer law enforcement basis for guidance, and it can be more flexible in specific work."
In the new "Anti-Monopoly Law", the introduction of the classification and grading review system for the concentration of business operators has attracted much attention.The "Regulations on the Examination of Concentration of Business Operators (Draft for Comment)" also mentioned that it intends to strengthen the law enforcement in important areas such as the national economy and people's livelihood, and regularly evaluate the review effect.Han Wei, executive director of the Competition Law Research Center of the University of Chinese Academy of Social Sciences, said in a previous interview, "Classification and classification is a way of thinking that has attracted much attention in the field of platform economic governance in recent years. It is relatively rare to introduce this formulation from an angle. Classification and grading highlight certain characteristics of transaction subjects or transactions in the concentration of operators. Based on these characteristics, auxiliary rules can be designed more targeted, analysis methods can be adjusted, and law enforcement resources can be allocated to improve law enforcement. Quality and case handling efficiency.”
Deng Zhisong, senior partner of Dentons Law Firm, said, "Since the beginning of this year, the State Anti-Monopoly Bureau has asked us to indicate whether a platform company is involved when submitting the declaration of concentration of business operators, which shows that the National Anti-Monopoly Bureau has begun to investigate the concentration of business operators. Carry out classification and key review. In addition to platform companies, companies involved in finance, media, technology, people's livelihood and other fields may also be classified into separate categories, and may be classified, graded, and key reviewed according to the size of the company's revenue or other indicators."
It is worth noting that the "Regulations on the Review of Concentration of Business Operators (Draft for Comment)" intends to enrich the types of additional restrictive conditions, incorporate data stripping into structural conditions, maintain independence, revise platform rules or algorithms, and not reduce interoperability, etc. Incorporate behavioral conditions.
Additional restrictive conditions for concentration of business operators, also known as relief for concentration of business operators, means that in the anti-monopoly review of concentration of business operators, the concentration that has or may have the effect of eliminating or restricting market competition, by means of additional restrictive conditions, reduces its impact. market share or restrict the conduct of the parties involved in the concentration, thereby reducing or eliminating the anti-competitive effects of the concentration.The "Interim Regulations on the Review of Concentration of Business Operators", which came into effect on December 1, 2020, stipulates the way to attach restrictive conditions to the concentration of business operators: first, to divest tangible assets, intellectual property and other intangible assets or related rights and interests and other structural conditions; second It is a behavioral condition such as opening its network or platform and other infrastructure, licensing key technologies (including patents, know-how or other intellectual property rights), terminating exclusive agreements and other behavioral conditions. The third is a comprehensive condition combining structural conditions and behavioral conditions.The divested business should generally have all the elements for effective competition in the relevant market, including tangible assets, intangible assets, equity, key personnel, and rights such as customer agreements or supply agreements.The object of divestiture can be the subsidiary, branch or business department of the participating concentration operator.
Wei Shilin said that data stripping is a new remedy based on the competition mode and characteristics of the platform economy. Law enforcement agencies can take more targeted measures against different types of enterprises to promote the standardized, orderly, sustainable and healthy development of the platform economy.
