At the end of December 2012, three of China’s anti-monopoly regulators, the National Development and Reform Commission (NDRC), the State Administration for Industry and Commerce (SAIC) and the Ministry of Commerce (MOFCOM), made public their enforcement achievements, with the NDRC disclosing, for the first time, its case volumes.
The move to publish enforcement details in China follows vows by NDRC and SAIC to increase the transparency of their enforcement actions, in accordance with commitments made in August 2012 at the International Symposium on Controversial Issues regarding Chinese AML Enforcement. This practice mirrors that of other regulators, including the Australian Competition & Consumer Commission (ACCC), who publicises its achievements and case volumes through its annual reports, quarterly update magazine, public speeches and via public registers like the mergers register and price notifications register.
NDRC, which is responsible for regulating price-related monopoly conduct, reported that a total of 49 such cases have been investigated by them since China’s Anti-Monopoly Law (AML) was introduced in 2008.
SAIC, which is responsible for regulating non-price related monopoly conduct, reported that to date it has authorised the investigation of 16 cartel cases and 1 abuse of dominance case by regional SAIC offices. In addition, SAIC has decided 8 cases, 6 of them being closed in 2012.
MOFCOM reported that it considered a total of 186 merger clearances in 2012. Of these, 154 have been cleared with 6 of these cleared subject to certain conditions – figures which are similar to those reported by MOFCOM in 2011. MOFCOM reported that just over half of its 2012 cases related to equity acquisitions and 36% related to joint ventures. By way of comparison, the ACCC’s 2011-12 annual report states that it considered 340 matters for compliance with section 50 only 1 was publicly opposed and 60 were not opposed and no conditions were sought.
Several commentators have noted not only NDRC’s and SAIC’s increased focus on transparency, but also an increase in the scale and frequency of their activities. For instance, on 4 January 2013, NDRC announced a penalty of RMB 353 million (approx. US$56 million) to be imposed against 6 LCD panel manufacturers for price-fixing cartel activity, the authority’s first global cartel ruling. On 19 February, NDRC announced an even greater penalty of RMB 449 million (approx. US$72 million) to be imposed against 2 distilleries, Kweichow Moutai and competitor Wuliangye Yibin, for resale price maintenance. The total penalty is the largest ever imposed in China for anti-trust violations of the law to date.
King & Wood Mallesons’ China Law Insight has more details on these enforcement disclosures, available here and on regulator transparency, available here.
Hannah Foster and Hanna Gyton
