CHINA Law and Practice Contributed by: Liu Cheng, Li Yumeng, Ye Hongtao and Jiang Hanxue, King & Wood
• evidence indicating that consumers are shifting or intend to shift to purchasing other commodities due to changes in price or other competing factors; • overall characteristics and purposes of the com - modity; • price difference among commodities; and • sales channels of the commodity. Supply substitution analysis should consider factors such as: • evidence indicating the response of other under - takings in respect of the changes of competing factors such as price; • other undertakings’ production process and tech - nology; • difficulties in switching to other products; • time required for switching production; • any extra expenses and risks incurred by such product switch; • market competitiveness of the products manufac - tured after the shift; and • marketing channels. Relevant Geographic Market For the relevant geographic market definition, demand substitution analysis should consider factors such as: • evidence indicating that consumers are shifting or intend to shift to purchasing other commodities due to changes in price or other competing factors; • the transport costs and features of transport; • actual regions of most customers’ choice of goods; • the restrictions set out by the relevant laws and regulations; and • other factors such as language preferences and consumption habits of users. Supply substitution analysis should consider factors such as: • evidence indicating the response of other under - takings in other territories in respect of the changes of competing factors such as price; and • the timeliness and feasibility of the supply/sales of the relevant product by other undertakings in other territories.
There is no de minimis clause based on the parties’ total sales or market size in China. However, for a horizontal concentration in which the aggregated mar - ket share of the parties is less than 15%, or a non- horizontal concentration in which the market share of the parties in all relevant markets is less than 25%, the SAMR will normally presume the transaction does not have anti-competitive effects, unless there is evidence indicating otherwise. Besides, if a transaction is eligible for a simplified filing procedure, it generally means that the transaction is not likely to cause significant competition concerns. With respect to circumstances where the simplified filing procedure will be eligible, see 3.7 Review Pro- cess . 4.3 Reliance on Case Law While relevant precedent/case law is not binding, in practice, the SAMR may refer to its previous decisions (including the precedents of its predecessor, MOF - COM) to consider how the relevant markets should be defined. Occasionally, the SAMR may refer to case law from other jurisdictions, particularly if a transaction relates to markets that the SAMR has not previously exam - ined in detail. The decisions of the European Commis - sion are the most important in this respect. However, such decisions in other jurisdictions are for reference only, and the SAMR carries out its own assessment. 4.4 Competition Concerns As mentioned above, under the AML, a concentra - tion may be challenged on the grounds that it has or is likely to have the effect of eliminating or restricting competition. In practice, during the merger control review, the SAMR may investigate competition con - cerns that include the following: Horizontal Concerns For concentrations between undertakings active in the same markets, the SAMR will typically consider the following competition concerns: • unilateral effects, ie, whether the concentration would generate or reinforce a single undertaking’s
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