CHINA Law and Practice Contributed by: Jeff Liu, Jeanette Wang, Yulong Lai and Yun Bi, Shihui Partners
• general information relating to each party to the notified concentration (including business scope, information regarding subsidiaries or affiliates, etc); • summary of the proposed concentration (including deal amount and steps taken thus far); • commercial rationale or motivations for undertak - ing the notified concentration; • market definition (reasons explaining the definition of the relevant product and geographic market); • industry overview and market data (in relation to the relevant market); • assessment of the effect of the concentration on the relevant market; • the top five suppliers and customers in relation to each party to the concentration (required in cases under the normal review procedure); market entry analysis in relation to the relevant market (required in cases under the normal review procedure); and • other information in relation to competitors in the relevant market. On 12 October 2024, the SAMR updated the Notifica - tion Form and the public notice form for the simplified procedure, which further simplified the information to be submitted in notifications eligible for simplified review. It is possible (but not obligatory) to contact the compe - tition authorities (including the SAMR and its delegat - ed provincial authority) before submission. According to past experience, the notifiability of the transaction and the applicable review procedure are usually dis - cussed in pre-filing discussion with the authorities. 4.3 Substantive Test Article 33 of the AML sets out the factors to be con - sidered in assessing the competitive effects of a con - centration, including: • the market share of the undertakings that partici - pate in the concentration and their control over the market; • the degree of market concentration of the relevant market; • the impact of the concentration of undertakings on market access and technological advancement; • the impact of the concentration of undertakings on consumers and other relevant undertakings;
• the impact of the concentration of undertakings on the development of the national economy; and • other factors affecting market competition that the AML Enforcement Agency of the State Council deem necessary to be taken into account. In practice, the SAMR usually defines relevant mar - kets based on business relationships between under - takings, and assesses the market power and degree of market concentration based on the market share of the undertakings and the top market players in the relevant market. The SAMR may also assess the impacts of the transaction on market entry, upstream and downstream market players, technological devel - opment and consumers’ benefits, as well as the public interest and industrial policies. 4.4 Theories of Harm and Key Issues Unilateral effects and co-ordinated effects are usually examined in a horizontal concentration. In a vertical concentration, the SAMR usually assesses the vertical foreclosure effects and the co-ordinated effects. In a conglomerate merger, the SAMR assesses whether the concentration may give rise to limiting or foreclos - ing effects via tying or bundling strategy, and may give rise to any co-ordinated effects. For transactions involving innovation and the digital sector, compat - ibility and free access to platforms or key resources are also usually considered. 4.5 Efficiencies and Failing Firm Defence Efficiencies and failing firm arguments are consid - ered by SAMR. However, with no public precedent, the SAMR has not specifically discussed how efficien - cies or failing firm arguments may affect its decision. 4.6 Remedies and Commitments The following types of remedies are available and commonly implemented in China: • Structural remedies: such as divestiture of tangible assets or intangible assets, including intellectual property rights, data, or relevant rights and inter - ests; • Behavioural conditions: such as providing access to infrastructure, including networks or platforms, licensing key technologies (including patents, know-how or other intellectual property,
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