China to merge antitrust into one enforcer

Ron Knox

11 March 2018

China to merge antitrust into one enforcer

China is expected to announce early this week that it will combine the duties of its three competition agencies into a single centralised authority, bringing enforcement of its eight-year-old antitrust law under one roof for the first time.

Consolidating the enforcement of China’s Anti-Monopoly Law will end a system that the international antitrust community had frequently criticised for its fractured and seemingly arbitrary division of duties among three agencies.

Since the law’s inception, China has divided its enforcement into mergers, price conduct and non-price conduct, with a separate agency carrying out each area of oversight. The Ministry of Commerce reviews mergers, while the National Development and Reform Commission oversees price conduct and the State Administration for Industry and Commerce reviews non-price conduct.

But because antitrust cases typically include conduct that affects both the price of goods and other issues outside of pricing, antitrust observers have frequently criticised the Chinese competition authorities' structure.

Chinese officials are expected to announce this week that those enforcement powers will coalesce under one agency, two sources familiar with the plan said. It is unclear which agency will take over those duties, although the sources said they are unlikely to fall to Mofcom.

One source said the Chinese government is also expected to announce the creation of a new ministry charged with overseeing the market economy, and that this agency will have some antitrust oversight duties.

The announcement could come as soon as Tuesday.

William Kovacic, who worked closely with Chinese officials when they were establishing their antitrust enforcement system, has previously said China was aware its three-agency system was not ideal and predicted that the structure would not survive the Anti-Monopoly Law’s first decade.

“I would be surprised if five years from now China has the same configuration it does now, because after this prototyping and testing of what they have, I think there’s an awareness that that’s not supportable in the long-term,” Kovacic said at a 2015 conference.

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