Competition law developments in East Asia - July 2016
Below is an excerpt from our monthly Competition Report. More detailed commentary on these issues and other recent competition law developments in the Asian region is to be found in this month’s edition of our report available on a free subscription basis (see further below).
China merger control comes of age
This month the Antimonopoly Bureau of China’s Ministry of Commerce announced that it had cleared close to 100 transactions during the second quarter, bringing the total at the half-year mark to 174. At the current pace, total transactions subject to the merger control regime will exceed 300 as it did last year, which renders the level of merger control activities in China to be around par with other administrative review regimes like those of the EU and Japan.
The quarter also marked the second year since the introduction of a simple cases procedure, which has been an undeniable success. More than three fourths of all cases are now handled under the procedure, providing a less burdensome process to merging parties. As at 30 June, the new procedure had been applied in 456 cases. While the procedure does not offer a guarantee for a speedy review, the vast majority of transactions had been approved within one month upon acceptance of the filing. The average clearance time of all transactions stands at 29 days.
Perhaps the most significant change relates to the approach to difficult transactions. As the month came to a close, the Antimonopoly Bureau issued a public announcement regarding its conditional approval of Anheuser-Busch InBev’s acquisition of rival brewer SABMiller. The announcement explains that parties had engaged in a three-month pre-notification consultation before formally seeking approval, and that they had submitted their proposed remedy (essentially a commitment not to merge their respective activities in China and to divest the target’s activities to a third party) before the procedure had formally started. This more flexible procedural approach allows parties in difficult transactions to better coordinate multijurisdictional filings, as the merger review process in China now more closely follows the timetable and practice adopted in the EU and the US.
CCS partially settles case against lift spare parts suppliers
On 14 July, the Competition Commission of Singapore (CCS) issued a press release announcing that it had commenced an abuse of dominance investigation into the allegation that several suppliers of branded lift spare parts were refusing to supply spare parts to third-party maintenance contractors.
In Singapore, town councils are required to carry out regular lift maintenance for lifts installed in the Housing and Development Board estates. Town councils can choose to appoint the maintenance service of the original lift brand or third-party maintenance contractors, who rely on original branded spare parts suppliers to provide their service. In its press release, the CCS stated that a refusal to supply proprietary but essential lift spare parts to third-party lift maintenance contractors by dominant or sole lift spare parts suppliers prevents these third-party contractors from effectively competing with other contractors which could constitute an abuse of market dominance contrary to section 47 of the Competition Act.
In the context of this investigation, one supplier of branded lift spare parts, E M Services, provided commitments to the CCS to supply its branded products in Singapore to third-party maintenance contractors, subject to certain conditions including an undertaking by these contractors not to reverse engineer or modify the purchased lift spare parts. Although these commitments fully address the competition concerns raised by the CCS, the agency will continue to pursue its investigation in respect of other suppliers of branded lift spare parts.
Table of contents of our July 2016 report (Issue 90)
China MOFCOM makes 93 unconditional clearances during the second quarter of 2016
China AB InBev's takeover of SABMiller receives conditional approval China Dominant gas suppliers sanctioned for unfair pricing China Pharmaceutical companies sanctioned for cartel practices Japan JFTC opens second-phase review of proposed business integration between Fukuoka Financial Group and The Eighteenth Bank Japan Companies sanctioned for their involvement in rigging Tepco tender Japan JFTC consults on proposed revisions to fining policy Korea Marine equipment manufacturers sanctioned for bid-rigging Korea More bid-rigging sanctioned in tenders for non-destructive testing services
Korea Bus information system service providers sanctioned for rigging tenders Korea KFTC releases 2015 enforcement statistics Korea KFTC blocks SK Telecom’s proposed acquisition of CJ Hellovision Korea KFTC orders price-fixing activity to stop in ready-mixed concrete sector Korea KFTC proposes to further refine its leniency regime Malaysia MyCC publishes decision against e-government service provider
Singapore CCS partially settles case against lift spare parts suppliers
Singapore CCS clears Heineken's acquisition of sole control of GAPL Singapore CCS approves proposed acquisition of ICAP’s global wholesale broking business by Tullett Prebon Taiwan Blood glucose monitor supplier sanctioned for resale price maintenance
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