China Drafting Market-Share Standards for Antitrust Review

飞雪寒冰

The Ministry of Commerce said it is drafting a standard for its antitrust review that will determine when the market share of a combined entity is uncompetitive, following many requests to clarify its decision to reject Coca-Cola’s US$2.4 billion acquisition of Huiyuan Juice Group last month.



Shang Ming, director of the ministry’s Antimonopoly Bureau, said at a conference on March 31 that in support of the evolving standard for market share, the ministry will require additional disclosure from parties to a takeover.



Shang said the Ministry of Commerce, National Development and Reform Commission and State Administration for Industry and Commerce are specifically drafting rules to define the “relevant market” for a merged entity.



The official’s remarks acknowledge the lack of a specific market share standard in existing law, which was a major issue in the Coca-Cola decision. The ministry has said that the ruling took into consideration Coca-Cola’s dominance of the carbonated beverage segment, and how it might lead it to dominate the juice market in China.



Shang said the existing Antimonopoly Law, which took effect Aug. 1, is “workable, although it only has 57 clauses,” and lacks explicit requirements for information disclosure.  



The official added that the ministry will look initially at review guidelines for the financial sector, including banks, insurers and securities firms, including which levels of turnover and market share in a combined company might be uncompetitive.