U.S. and China strengthen antitrust cooperation efforts

Competition authorities sign a formal agreement to bring greater transparency.

Since China’s Anti-Monopoly Law (AML) took effect in 2008, its Ministry of Commerce (MOFCOM), one of the country’s three competition agencies, has taken the lead on merger control, reviewing more than 250 proposed transactions. MOFCOM has cleared most of them, seven with conditions, but it has blocked only one.

MOFCOM’s March 2009 prohibition of The Coca-Cola Co.’s closely watched proposed acquisition of Huiyuan Juice Group Ltd., China’s largest juice company, ignited a furor. Some members of the foreign investment community saw the rejection as a sign of protectionism on China’s part, of the country’s merger control agency bowing to political pressure.

In the MOU, the countries’ competition authorities recognize it is “in their common interest” to work together on keeping each other informed on significant policy and enforcement developments; enhancing agency capabilities through activities such as training programs, workshops, study missions and internships; exchanging experiences on competition law enforcement; seeking information or advice; providing comments on proposed changes to laws, regulations, rules and guidelines; exchanging views on multilateral competition law and policy; and exchanging experiences on awareness-raising.

“You look at the practical provisions of the MOU … and these are general objectives,” says Lucas Niedolistek, a DLA Piper lawyer practicing in Hong Kong. “It could be a great and significant starting point … but this is just a framework agreement, so a lot will depend on how, on a daily basis, these authorities cooperate.”

Sidebar: Unifying Goals

It’s likely that the U.S. and Chinese competition authorities will take longer to reach consensus on issues under their Memorandum of Understanding than in agreements with countries that have only one antitrust agency. The U.S. has two antitrust agencies at the national level—the Federal Trade Commission and the Justice Department. China is unique in that three separate agencies split antitrust enforcement responsibilities at the national level: The State Administration for Industry and Commerce, the National Development and Reform Commission and the Ministry of Commerce.

Associate Editor

Melissa Maleske

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