CHINA Trends and Developments Contributed by: Wei Yingling, JunHe LLP
• Unilateral effect – the unilateral effect of non- horizontal mergers is mainly assessed based on the ability, incentive and effect to conduct fore - closure. Besides foreclosure, the opportunity to obtain competitively sensitive information (CSI) of competitors through the existing supplier-customer relationship (eg, by merging with Supplier A, Com - pany B may obtain confidential information about A’s other customers that compete with B) may also cause a unilateral effect on the relevant market. • Co-ordinated effect – non-horizontal mergers may change the competitive characteristics of the rel - evant markets, resulting in the combined entity and upstream/downstream/related competitors who did not co-ordinate prior to the transaction tend - ing to reach explicit or tacit co-ordinated conduct, or to make co-ordination achieved prior to the transaction easier, more stable and more effective. According to the Non-Horizontal Guidelines, while the theory of harm of non-horizontal mergers is dif - ferent from horizontal mergers, the analysis in the Horizontal Guidelines could be of reference • Offsetting and defence factors – offsetting factors such as market entry and buyer power, as well as defence factors such as efficiency, are also consid - ered in the assessment of non-horizontal mergers. According to the Non-Horizontal Guidelines, the analytical methods and standards in the Horizontal Guidelines could be of reference. Special considerations in the digital and natural monopoly sectors Moreover, the Non-Horizontal Guidelines establish special considerations for the digital and natural monopoly sectors. For digital sector mergers, market definition, market share calculation, and market control analysis may account for platform economy characteristics, with the SAMR referencing the Anti-Monopoly Guidelines on Platform Economy. The Non-Horizontal Guidelines also recognise that certain conglomerate mergers may facilitate ecosystem expansion, diversify product portfolios, generate economies of scope and network effects, and enhance user stickiness. In such cases, the SAMR may assess whether the ecosystem has the ability and incentive to suppress competition based on objective evidence.
For mergers involving natural monopoly operators, where such operators expand into upstream or down - stream competitive segments through vertical merg - ers, the SAMR will apply stricter scrutiny to prevent the leveraging of natural monopoly power for anti- competitive conduct in those competitive markets. A Merger Review Regime With More Teeth Call-in powers in critical sectors: Synopsys/Ansys; Keysight/Spirent; Qualcomm/Autotalks Unsurprisingly, geopolitical tensions continue to have an undeniable effect on the merger review of high-pro - file deals in sensitive sectors such as chips, software, semiconductors, etc. The SAMR published its clear - ance decision with remedies for Synopsys’s acquisi - tion of Ansys in July 2025 as well as that of Keysight’s acquisition of Spirent in September 2025. Neither of the two deals met the turnover thresholds prescribed by law, but both were subject to the SAMR’s substan - tial review. According to the clearance decisions, the SAMR proactively called in the Synopsys/Ansys deal, requesting the parties to submit filing due to its poten - tial competition concern (the first case ever where the SAMR has used its call-in power and imposed rem - edies), while the Keysight/Spirent filing was voluntar - ily submitted by the parties under long-form filing. In Synopsys/Ansys, the SAMR found horizontal concern in several EDA software markets, and conglomerate concern based on Ansys’s EDA software and Synop - sys’s EDA software and design IP, imposing behav - ioural remedies related to supply security, bundling concern and interoperability, as well as divestiture. In Keysight/Spirent, the SAMR found horizontal concern in high-speed Ethernet testing and network security testing product markets, accepting global divestiture of Spirent’s high-speed Ethernet testing and network security businesses, and imposing another remedy which was kept confidential from the public. Such heightened scrutiny can also be seen in niche markets, such as Vehicle-to-Everything. After receiving complaints, the SAMR assessed the deal and request - ed Qualcomm to make the filing in March 2024, based on potential competition concerns, despite the fact that the deal fell below the turnover thresholds. Qual - comm subsequently informed the SAMR that the deal was abandoned, however, it then announced comple - tion of the transaction in June 2025. In response, the
114 CHAMBERS.COM
Powered by FlippingBook