Clifford Chance

Antitrust in China and across the region: October to December 2019

27 February 2020

Key points of interest last quarter include the following:

• A couple of notable developments in relation to Chinese merger control.  First, a higher than unusual tally of nine gun-jumping decisions were taken last quarter, three of which related to acquisitions of a minority stake (<30%), including two cases involving a private equity investor. Secondly, last quarter also saw two conditional approvals, making a total of five cases in 2019 where remedies were imposed. Interestingly, one of these cases (Zhejiang Garden/Royal DSM) involved a non-full function joint venture set up to produce an intermediate product, which was cleared on condition that the parties kept their downstream businesses separate and put firewalls in place to protect the flow of sensitive information.
• In terms of enforcement, a total of five cases were published by various provincial branches of SAMR. These included most notably another resale price maintenance fine in the automobile sector, with Toyota China being fined approximately RMB 87 million (USD 12.5 million) for measures aimed at ensuring distributors of the Lexus followed the recommended retail price. Unusually, the decision expressly stated that this fine was calculated on the basis of the total turnover of Toyota China, not just the turnover from sales of the relevant Lexus models.
• Outside mainland China, the Hong Kong Competition Commission rejected an application to exempt a pharmaceutical sales survey from the competition rules on efficiency grounds. In Japan, the JFTC continued its focus on the digital sector by publishing a proposal to regulate digital platforms, guidelines on data use and a report on trade practices. It also issued a recommendation to notify below-threshold mergers where the total consideration for the acquisition exceeds JPY 40 billion (USD 368 million) and where it might affect domestic consumers. In Australia, the ACCC brought a case against Google for misuse of personal data as well as taking its first enforcement act on a concerted practice following comments made on social media by two Sydney roofing contractors. Finally, Indonesia closed a loophole in its merger rules by extending the scope of merger control to cover asset deals as well as share deals.

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