• China and US Move Closer on Antitrust Collaboration
  • August 31, 2011
  • Law Firm: Grandall Law Firm - Beijing Office
  • On July 27 2011 China's three anti-monopoly agencies - the Ministry of Commerce, the National Development and Reform Commission and the State Administration for Industry and Commerce - signed an antitrust and anti-monopoly memorandum of understanding with the US Federal Trade Commission and the US Department of Justice in Beijing, with the aim of promoting international communication and cooperation between the agencies.

     

    Federal Trade Commission Chairman Jon Leibowitz stated:

    "From the first suggestion to this final signed [memorandum of understanding], both

    countries has been preparing for two years. During the preparation period, we have

    established a mutual and steady trust relationship, and made the encouraging goal on

    market competition."

     

    In establishing a framework for enhanced cooperation between the Chinese and US agencies, the memorandum of understanding will allow China and the United States to move to the next stage in their collaboration on competition law and policy matters. Provision has been made for periodic high-level consultations involving all five agencies, as well as separate communications between the individual agencies.

    Specific avenues for cooperation include:

    l  exchanging key information and advice about anti-monopoly law enforcement and competition policy developments;

    l  providing training programs, workshops and other assistance to enhance agency effectiveness;

    l  sharing experiences of anti-monopoly law enforcement;

    l  providing views on anti-monopoly laws, regulations and guidelines;

    l  exchanging views on multilateral competition law and policy; and

    l  enhancing the exchange of experience among industries, government departments and the general public on competition law and policy.

     

    The memorandum of understanding does not change the law in either country; rather, it describes a bilateral agreement between China and the United States and expresses a shared goal of effective antitrust and anti-monopoly enforcement. The two countries will cooperate on training programmes, workshops, study missions and internships. Each of the agencies plans to nominate a point of contact to facilitate the liaison work.

    The Ministry of Commerce received more than 130 M&A applications in 2010; worldwide, China is the third largest competition review jurisdiction.  Once new regulations on penalties for illegal concentration are promulgated, the review of concentration filings will become evern more rigorous.  Despite the fast pace at which China's anti-monopoly legislation has been implemented, its competition culture is still developing.  For the State Council and the three anti-monopoly agencies, the priority is to establish legislation and guidelines that will provide for effective anit-monopoly regulation.  The regulator's views in this area raise serious concerns for foreign regulators and investors.  Thus, the ability to foresee and comment on trends in Chinese legislation will become increasingly vital for foreign governments in protecting their country's investments in CHina.  As the biggest investor in China outside of Hong Kong and Taiwan, it is clearly in the United States' interest to cooperate with China, so that the latter continues to be an attractive jurisdiction for foreign investment.