In late 2022, the State Administration of Market Supervision and Administration (hereinafter referred to as the "General Administration") launched a pilot work of entrusting some local bureaus to review the concentration of business operators. Currently, the pilot project has been carried out for about half a year. This article intends to take the Beijing Municipal Market Supervision and Administration Bureau as an example to analyze the work of the pilot commissioned review for reference.

1、 Acceptance scope of entrusted pilot cases

On July 15, 2022, the State Administration of Industry and Commerce officially issued the "Announcement on Pilot Commissioned Anti monopoly Review of Some Concentration Cases" (hereinafter referred to as "the Announcement"), and decided to entrust the market supervision and administration departments of five provinces (municipalities directly under the Central Government), including Beijing, Shanghai, Guangdong, Chongqing, and Shaanxi, to conduct anti monopoly review of some concentration cases that meet the standards during the period from August 1, 2022 to July 31, 2025.

According to the requirements in the first item of the "Entrustment Matters" of the Announcement, the General Administration will entrust the pilot provincial market supervision department to review cases that meet one of the following standards and are subject to the simplified procedures for concentration of business operators:

（1） At least one applicant's domicile is located in the relevant area where the department is entrusted to contact (hereinafter referred to as the relevant area);

（2） An operator obtains control of another operator through acquisition of equity, assets, or contracts, and the domicile of the other operator is located in the relevant area;

（3） The operator establishes a new joint venture with its domicile in the relevant area;

（4） The regional market related to the concentration of business operators is a regional market, and the relevant regional market is wholly or mainly located in the relevant region;

（5） Other cases entrusted by the General Administration of Market Supervision.

2、 Pilot provincial market supervision departments and their responsible regions

According to the provisions of the Announcement, the provincial market supervision departments currently entrusted for review and their respective responsible areas are as follows:

3、 Overall situation of the current entrusted review by Beijing Bureau

In coordination with the Announcement of the State Administration of Industry and Commerce, the Beijing Municipal Bureau of Industry and Commerce also released the Announcement of the Beijing Municipal Market Supervision and Administration on Implementing Anti monopoly Review of Some Concentration of Business Operators Cases on its official website on July 27, 2022, reiterating the acceptance scope and review procedures of entrusted review cases.

According to the statistics on the number of "simple case publicity for concentration of business operators" and "unconditional approval of simple case publicity for concentration of business operators" disclosed on the official website of the Beijing Municipal Bureau, as of February 1, 2023, there were 25 cases filed by the Beijing Municipal Bureau, of which 21 reported cases had been unconditionally approved.

4、 Specific Statistics of Case Acceptance Standards of Beijing Bureau

According to the "Publicity of Simple Cases of Concentration of Business Operators" disclosed on the official website of the Beijing Municipal Bureau, it can be seen that the acceptance criteria met by each publicized case are as follows:

The chart is shown as follows:

The following characteristics can be seen from the above statistics:

1) Of the 25 cases disclosed, 21 cases met the criteria for the applicant's location in the Beijing Bureau, accounting for an absolutely high proportion;

2) Secondly, there are 10 cases that meet the criteria for the acquiree to be located in the jurisdiction of Beijing Bureau, of which 3 cases are satisfied as the only criteria;

3) In addition, all new joint venture cases meet the criteria for the applicant to be located in the jurisdiction of the Beijing Bureau. Two of the cases met the criteria for the newly established joint venture to have its domicile located in the jurisdiction of the Beijing Bureau. Other newly established joint venture cases do not disclose the domicile of the newly established enterprise. However, another perspective also indicates that there are no cases where the newly established joint venture is located in the jurisdiction of the Beijing Bureau as the sole criterion;

4) There have been no cases where the regional market is located in the jurisdiction of the Beijing Bureau as a judgment standard;

5) "The applicant, the acquiree, and the centralized regional markets in the case of Taimeng Asia Fourth Limited Partnership acquiring the equity of Shandong Fengxiang Co., Ltd." are not under the jurisdiction of the Beijing Bureau, so they are temporarily classified as "other cases entrusted by the General Administration of Market Supervision".

5、 Summary

1. The most common standard is entrustment based on the applicant's domicile

As can be seen from the above statistics, there is no doubt that according to standard (1), the most commonly used criterion for delegation classification is the location of the applicant's domicile in the local bureau jurisdiction. We believe that this arrangement clearly has its rationality at the level of declaration work. According to China's current antitrust reporting rules, centralized trading entities that have obtained control usually act as filers and lead the reporting process. Each local bureau is responsible for administering cases in its own province, city, or adjacent areas. The declarant is located in these areas, making it easier to communicate with the review authority.

However, the statistical results still indicate that in a few cases, the application case will not be entrusted based on the applicant's domicile, but rather on the criterion (2) of the buyer's domicile. The most typical reason for this situation is that the applicant itself may be a foreign enterprise, and its domicile does not belong to any local jurisdiction. For example, in the case of "Lear (Mauritius) Co., Ltd. and Hyundai Tandis Co., Ltd. acquiring the equity of Beijing Lear Hyundai Tandis Automotive Systems Co., Ltd." entrusted to the Beijing Bureau, both acquirers are foreign enterprises located outside China.

The General Administration still has great flexibility in deciding to entrust jurisdiction to cases

It should be emphasized that which local bureau is responsible for the review of simple declaration cases is not the choice of the declaration subject itself (which is different from bringing a lawsuit in court), but rather the unified declaration by the declaration subject to the General Administration, which decides to entrust a certain local bureau to be responsible for the review. Therefore, the flexibility of the General Administration in selecting local bureaus under its jurisdiction is significant.

The five standards in the Announcement cover a wide range of regions and have covered various regions that can be involved in centralized trading. Therefore, traders participating in centralized trading should also consider different possibilities when predicting the entrusted local bureau. Moreover, the fifth criterion in the Announcement, "Other cases entrusted by the General Administration of Market Supervision", is a cover clause, allowing the General Administration to entrust jurisdiction to a local bureau that does not have a direct contact area. In the "Taimeng Asia Fourth Limited Partnership's Acquisition of the Equity of Shandong Fengxiang Co., Ltd." case led by Beijing Bureau, the acquirer Taimeng Asia Fourth Limited Partnership is a foreign enterprise established in the British Cayman Islands. The acquired Fangshan Dongfengxiang is a company located in Liaocheng, Shandong Province (under the jurisdiction of Shanghai Bureau), and the relevant geographical market for the transaction is within China. From the perspective of the information of various entities, it seems more appropriate to have the Shanghai Bureau under its jurisdiction, but the General Administration ultimately entrusted the Beijing Bureau with the review.

In addition, even if the conditions for entrustment are met, the General Administration may still conduct its own review. In the "New Joint Venture Case between Beijing Sankuai Online Technology Co., Ltd. and Beijing Xinhangcheng Fund Management Co., Ltd." announced by the General Administration on January 17, 2023, the various operators, new joint ventures, and related geographical markets involved in the concentration are located in Beijing, but the General Administration has not entrusted the Beijing Bureau, but is personally responsible for the review.

In addition, referring to the website information, it can be seen that since the commissioning of the pilot project, among the cases reviewed by the General Administration in person, both parties to the transaction and newly established joint ventures are located overseas, still accounting for a large proportion, indicating that the General Administration is focusing more on reviewing overseas transaction cases, which is a trend. However, at the same time, the General Administration will still personally review domestic transaction cases. As mentioned above, Beijing Sankuai Online Technology Co., Ltd. and Beijing Xinhangcheng Fund Management Co., Ltd. established a new joint venture.

To sum up, as this article only analyzes the Beijing Bureau, it is inevitable that it will be leaked. But a glimpse of the leopard shows. Therefore, a centralized trading entity can make a preliminary judgment on which local bureau may be responsible for the antitrust review work based on the domestic region involved in the transaction, especially the region where the applicant is located. However, it is still necessary to know that the General Administration has a great deal of discretion in the entrusted arrangements.
Statement: This article does not constitute legal advice. If you have legal questions, please contact the author.