MOFCOM Steps Up Enforcement of Merger Report Rules

On March 20, 2014, the Chinese Ministry of Commerce (MOFCOM) issued a statement on violations of rules on reporting mergers. The statement announced that starting on May 1, 2014, MOFCOM will publish on its website a list of all offenders who fail to report mergers in violation of the Anti-Monopoly Law, on top of existing penalties of a fine of 500,000 yuan (~$80,000) and nullification of the merger. MOFCOM also set up a dedicated fax line for all whistleblowers. These developments come at the heels of recent MOFCOM announcements that it will step up its enforcement efforts of the country’s antitrust rules.

Many observers have noted that MOFCOM is attempting a “carrot and stick” strategy to coax companies to follow more closely MOFCOM’s antitrust rules. The aforementioned developments would compose the “stick” part of MOFCOM’s strategy, while MOFCOM’s well-publicized work on the new “simplified merger review process,” designed to reduce the burden on companies that file mergers, represent the “carrot” part of MOFCOM’s strategy.

We have followed the “simplified merger review process” closely on our blog, and the relevant articles can be found at:

https://www.antitrustlawyerblog.com/mofcom-publishes-long-awaited-interim-rule-on-applicable-standards-for-simple-merger-review-cases/

and 

https://www.antitrustlawyerblog.com/mofcom-update-draft-rules-on-simplified-merger-review-procedure/

Mark Ye
202-589-1834
mye@dbmlawgroup.com