EU Commission signs best practices cooperation framework for mergers with China

EU Commission signs best practices cooperation framework for mergers with China

EU Commissioner Margrethe Vestager, in charge of competition policy, commented: “A growing number of international transactions need to get the green light in several jurisdictions. The cooperation framework agreed today between the Commission and China’s merger review authority Mofcom, Ministry of Commerce People’s Republic of China reflects our commitment to a stronger cooperation between our two competition authorities”

The practical guidance document signed October 15, 2015 creates a dedicated framework to strengthen cooperation and coordination between the Commission and China’s merger review authority, Mofcom.

Cooperation between competition authorities increases the efficiency of investigations and reduces the burden on the merging parties, in particular when authorities are able to share information and to discuss timetables at key stages of investigations with each other and with the merging companies.

The guidance will facilitate communication throughout the entire merger review procedure on issues of procedure and substance, including the definition of relevant markets, theories of harm, competitive impact assessments and remedies.

The signing of the guidance document reflects the ambition of enhanced cooperation on competition matters between the EU and China.

Enforcement of the Anti-Monopoly Law in China is shared by three agencies. Mofcom is responsible for merger review, the National Development and Reform Commission (NDRC) enforces the rules against price-related infringements and the State Administration of Industry and Commerce (SAIC) is responsible for non-price related infringements.

The Commission’s competition department already concluded Terms of References on the EU-China Competition Policy Dialogue with Mofcom in 2004. It will continue to cooperate with the Mofcom on the basis of the 2004 agreement. In 2012, the Commission’s competition department signed a Memorandum of Understanding with the NDRC and SAIC which creates a dedicated framework to strengthen cooperation and coordination.

The Commission enforces competition rules for the EU as a whole notably concerning the review of mergers and acquisitions involving companies with a turnover above certain thresholds (defined in Article 1 of the Merger Regulation in force since 1990) and the fight against cartels and abuses of dominant market positions (respectively Articles 101 and 102 of the Treaty on the Functioning of the EU).

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