The State Council released the "Provisions of the State Council on Thresholds for the Declaration of Concentrations of Undertakings" (Revised in 2024) (《国务院关于经营者集中申报标准的规定（2024年修订）》) (the “2024 Thresholds”) on Jan. 26, 2024, effective immediately. The revision is the first revision since China enacted the Anti-Monopoly Law (the “AML”) in 2008 and limits coverage of the AML to larger-sized transactions.
Below are summarized highlights of the 2024 Thresholds:
1. Higher Turnover Thresholds for Mandatory Merger Review.
The 2024 Thresholds introduce higher turnover thresholds for merger review filing. Specifically, Article 3 requires mandatory pre-closing merger review, where:
i. (a) The combined worldwide turnover of all undertakings to the concentration exceeds RMB 12 billion (approx. US$1.7 billion) (increased from RMB 10 billion) or (b) the combined turnover in China of all undertakings to the concentration exceeds RMB 4 billion (approx. US$5.7 million) (increased from RMB 2 billion); and
ii. In either of the above scenarios, at least two of the undertakings to the concentration have turnover in China that exceed RMB 800 million (approx. US$113.5 million) (increased from RMB 400 million).
The penalties for violating the AML, as amended by the 2024 Thresholds, have remained unchanged. For deals that are subject to mandatory pre-closing merger review, failure to file carries substantial penalties. In particular, for transactions that are found to have potential monopoly effects, fines of up to 10% of the undertaking’s revenue from the preceding year can be imposed for failure-to-file. If the transaction is found to have no monopoly effect, the fine for failure-to-file will be capped at RMB 5 million.
