CHINA Law and Practice Contributed by: Liu Cheng, Li Yumeng, Ye Hongtao and Jiang Hanxue, King & Wood
suspend the review process if the parties submit the information requested in time. 3.10 Accelerated Procedure The notification form for the simplified procedure is shorter than the normal one and requires less informa - tion. The simplified procedure is applicable under the following circumstances: • where all of the undertakings involved in the trans - action have a collective market share of less than 15% in the same relevant market; • where the undertakings involved in the transac - tion have a vertical relationship, and each of them has or collectively they have a market share of less than 25% in the vertical market; • where the undertakings involved in the transac - tion do not have a vertical relationship, and each of them has less than a 25% share in all related markets; • where the undertaking involved in the transaction establishes a joint venture outside of China, and the joint venture does not engage in economic activity in China; • where the undertaking involved in the transaction acquires the equity or assets of a foreign enter - prise, and the foreign enterprise does not engage in economic activity in China; or • where a joint venture that is jointly controlled by two or more undertakings becomes controlled by one or more of them through the transaction. As provided by Article 34 of the AML, the SAMR will prohibit a concentration of undertakings if such con - centration has or may have the effect of eliminating or restricting competition, unless the undertakings involved in the concentration are able to prove that the positive impact of the said concentration on competi - tion significantly outweighs the adverse effect thereof, or such concentration is in the public interest. Article 33 of the AML set out the factors to be con - sidered by the SAMR in assessing the competitive effects of a merger: 4. Substance of the Review 4.1 Substantive Test
• market shares and market control power of the merging parties in the relevant market; • concentration levels of the relevant market; • impact of the concentration on market entry and technological development; • impact of the concentration on consumers and other relevant undertakings; • impact of the concentration on national economic development; and • other factors that should be considered. The Provisions on Concentration Review provide further guidance on the factors set out by the AML in assessing the competitive effects of a merger, as outlined below. Market Control Power When assessing the market control power of the merging parties, the following factors should be taken into account: • merging parties’ market share in the relevant mar - ket; • the substitutability of products or services; • the capability, financial and technical conditions to control the sales or raw material procurement market; • the capability to control and process data; • market structure of the relevant market; • production capability of other undertakings; • purchase capability of downstream customers and When assessing the concentration levels of the rel - evant market, the number of undertakings in the rel - evant market and their market share must be con - sidered. For horizontal mergers, the Horizontal Merger Review Guidelines provide the assessment framework based on the Herfindahl-Hirschman Index (HHI), as outlined below: • If post-concentration HHI < 1000, or ΔHHI < 100, the SAMR will normally consider that there are no anti-competitive effects. the capability to switch suppliers; and • market entry of potential competitors. Concentration Level of Relevant Market
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