CHINA Trends and Developments Contributed by: Wei Yingling, JunHe LLP
• Less than 15%: The transaction is presumed to have no anti-competitive effect, unless there is evidence to prove the opposite. • Between 15% and 25%: SAMR will gener - ally not deem that the transaction will have or may have an anti-competitive effect, but specific competition analysis is needed for each case. • Between 25% and 50%: SAMR will pay spe - cial attention to such concentration. • For a transaction that would result in a com - bined market share between 35% and 50% post-closing, SAMR will be inclined to con - sider the transaction will have or may have an anti-competitive effect. • Beyond 50%: SAMR will presume that the transaction will have or may have an anti- competitive effect, unless the undertakings can prove the opposite. In terms of market concentration, the Hori - zontal Guideline provides that the Herfindahl- Hirschman Index (HHI) shall be the quantitative criterion. In particular, a market will be deemed as: • a lightly concentrated market if the HHI index is lower than 1,000; • a moderately concentrated market if the HHI index is between 1,000 and 1,800; and • a highly concentrated market if the HHI index is higher than 1,800. Based on the above, the Horizontal Guideline sets out four ranges of the HHI index post- transaction and ΔHHI (the HHI increment) post- transaction and their respective levels of anti- competitive impact as below: • If the HHI is lower than 1,000 or the ΔHHI is lower than 100, the transaction will be pre - sumed to have no anti-competitive effect.
• If the HHI is between 1,000 and 1,800 while the ΔHHI is higher than 100, SAMR will be inclined to consider that the transaction will have or may have anti-competitive effect. • If the HHI is higher than 1,800 while the ΔHHI is between 100 and 200, SAMR will be more inclined to consider that the transaction will have or may have an anti-competitive effect. • If the HHI is higher than 1,800 and the ΔHHI is higher than 200, SAMR will presume the transaction will have or may have an anti- competitive effect, unless the undertakings can prove the opposite. While the market share and market concentration criteria do not independently determine whether a transaction has or may have anti-competitive effects, such criteria provide clear guidance for undertakings to preliminarily assess how likely a concentration may give rise to competition con - cern from SAMR, and whether it is necessary to put more weight on the competition analysis to address such concern. Framework of competition analysis The competition analysis framework under the Horizontal Guideline basically views a concen - tration from two perspectives: anti-competitive factors on one hand, and offsetting factors on the other hand. Anti-competitive elements: unilateral effects and/or co-ordinated effects Unilateral effects and co-ordinated effects are the two major anti-competitive effects under the general competition rationales, and the Horizon - tal Guideline provides guidance regarding the factors that may cause such effects. The situations where unilateral effects are iden - tified mainly consist of significant increases in market share and concentration, elimination of
106 CHAMBERS.COM
Powered by FlippingBook