The European Commission and the Ministry of Commerce of the People's Republic of China have signed a best practices agreement for collaboration in the review of mergers and acquisitions. The agreement aims to provide "practical guidance" to further strengthen cooperation and to facilitate closer communication between parties about procedural and substantive issues.
Although it remains to be seen to what extent the new framework will affect the level of cooperation, the intentions of the European Commission and MOFCOM are expected to lead to the merger review processes becoming more uniform. This may also result in more consistency in outcomes. We will keep you informed of further developments.
The agreement, which was signed on 15 October 2015, aims to provide "practical guidance" to increase the level of coordination and interaction between the European competition authority and its Chinese counterpart. According to the agreement, both competition authorities have a common interest in merger review outcomes that are efficient, consistent and non-conflicting.
China's merger control regime has become an increasingly important consideration for global transactions, and the country is today considered one of the world's major merger control enforcers. In recent years, MOFCOM has increased its enforcement of the obligation, under China's Anti-Monopoly Law, to report notifiable transactions and has started publishing the fines it has imposed on parties infringing this obligation.
The European Commission and MOFCOM signed their first cooperation agreement in 2004 and have expanded their cooperation in recent years. As part of their efforts to further strengthen cooperation, both parties have now agreed to communicate more closely about procedural and substantive issues, such as the definition of relevant markets, the assessment of the competitive impact and the design of remedies. In addition, the new guidance provides for the opportunity to coordinate information requests to the parties involved in the transaction and the designation of a liaison officer who facilitates case cooperation.
The extent to which the new framework will lead to greater cooperation between the competition authorities in Europe and China remains unclear, as details of the framework agreement's implementation are not yet known. However, we expect that the intentions of the European Commission and MOFCOM as reflected in the framework agreement will eventually lead to more coordinated and uniform merger review processes and potentially also result in more consistency in outcomes.
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