 The Ministry of Commerce of China (Mofcom) announced its decision to investigate Comcast’s acquisition of DreamWorks Animation SKG on September 2, 2016 after it received a complaint alleging the acquisition would adversely affect competition in the Chinese market.However, interestingly, Comcast declared on August 22, 2016 that the deal had been completed and it is clear that Comcast did not report to Mofcom for anti-monopoly review. Certain critics say that the deal barely touches China and Mofcom’s investigation is a way for China to assert its new position in the world. But is this really the case? What is extraterritorial jurisdiction? The extraterritorial jurisdiction of anti-monopoly law, which is common in such laws all around the world, means that under certain circumstances, a country is able to apply its anti-monopoly law to monopolistic activities outside the territory of the country. However, considering that the extraterritorial jurisdiction of anti-monopoly law is, in essence, the exercise of the sovereignty outside the territory of a country, in worldwide practice such application is always under certain restrictions. The US, the founder of the extraterritorial application of anti-monopoly law, takes the Effect Principle as the basic principle in its practice. According to the Effect Principle, a country is entitled to have extraterritorial jurisdiction over the activities actually taking place out of the country if such activities will have some effect over the country. Article 2 of China’s Anti-Monopoly Law provides that it is applicable to monopolistic conduct outside the territory of China that eliminates or has restrictive effects on competition in the domestic market of China. In addition, Provisions of the State Council on the Standard for Declaration of Concentration of Undertakings does not differentiate between domestic undertakings and foreign undertakings but further provides that Mofcom may initiate investigations into concentrations not meeting the prescribed reporting thresholds if facts and evidence gathered indicate that such concentration has or may have the effect of restricting or eliminating competition. This appears similar to the Effect Principle used in the US. However, compared to the practice of the US and EU that the application of the Effect Principle as the basic principle is still under restrictions (including the limits of Jurisdictional Rule of Reason and Comity), though such practice and restrictions are gradually established after decades of developments and debates, there is no more specific and manoeuvrable guideline for the assessment of “eliminates or has restrictive effects” in practice (such as to set a threshold for substantiality or a sufficient nexus) after Mofcom promulgated Interim Provisions on Assessing the Competition Impact of Concentration of Business Operators to provide a framework for such assessment. The pure application of the Effect Principle is always deemed to potentially cause conflict with the sovereignties of other countries and also damage their sovereignties and economic interests. China’s practice of extraterritorial jurisdiction Therefore, a reasonable and understandable concern would be that such lack of the more specific and manoeuvrable guideline is worrisome and, from a larger perspective, will grant huge discretionary power to Mofcom, which consequently not only damages the continuity and stability of the implementation of China’s anti-monopoly laws but creates uncertainty and confusion to those parties to a transaction with almost no impact on China whether they are required to report the transaction to Mofcom for anti-monopoly review. We believe that in such big deals as Comcast’s acquisition the parties should have engaged experts to review the necessity to report to Mofcom. The lack of guidelines as mentioned above may leave open the possibility that the parties to Comcast’s acquisition accepted the conclusion from experts that the deal is not subject to China’s anti-monopoly laws and the parties had no obligations to report to Mofcom for anti-monopoly review as the deal will have no impact on China (or otherwise, after trade-offs the parties chose to ignore the tips from experts according to which the parties may have to report for the anti-monopoly review in China but substantially subject to the interpretation and the practice of Mofcom). Nevertheless, under such circumstances, the parties to such deals are supposed to be very cautious of such action, especially taking into account that China’s market may become key to Comcast’s business, including in the theme park arena. In fact, according to the Guiding Opinions on the Declaration of the Concentration of Business Operators of China, the parties to a deal are allowed to apply for consultation with Mofcom on issues that the parries are concerned over. Therefore, the application for consultation with Mofcom might be a better choice, compared to the result of Comcast’s acquisition that Mofcom declared for its active probe into the deal and regularly Mofcom used to receive applications for anti-monopoly review that has been questioned for years for its passive enforcement of China’s anti-monopoly laws. Of course, we may have to pay some attention to Comcast’s acquisition from another perspective: according to Interim Measures for Investigating and Handling Failure to Legally Declare the Concentration of Undertakings of China, Mofcom is obligated to conduct investigations upon the receipt of the complaint in writing with facts and evidence alleging the failure to report for anti-monopoly review. Thus, it leaves open the possibility that Mofcom is taking actions to fulfill its obligations under China’s laws after its receipt of satisfied complaints. Still, whether the result will be similar to that for the three shipping giants in 2014 remains to be seen. 中国经营者集中制度下的域外管辖 什麽是域外管辖？ 中国《反垄断法》第二条规定：中华人民共和国境外的垄断行为，对境内市场竞争产生排除、限制影响的，适用本法。同时，《国务院关於经营者集中申报标准的规定》在构建中国经营者集中制度时并未区分中国境内经营者和境外经营者，且规定即使经营者集中未达到规定的申报标准，但按照规定程序收集的事实和证据表明该经营者集中具有或者可能具有排除、限制竞争效果的，中国反垄断执法机构仍应当依法进行调查。这便是典型的效果原则的借用。但是，相对於美国和欧盟等在将效果原则作为其基本原则的同时基於其多年反垄断实践又对效果原则进行了多方面限制（包括合理管辖原则（Jurisdictional rul of rason）和国际礼让原则（Comity）），商务部虽颁布了《关於评估经营者集中竞争影响的暂行规定》，但该规定仅对如何审查经营者集中提供了整体性的指引，而未能提供在实践中判定”排除、限制影响”的更具体和具有可操作性的指引（比如设置实质性或者直接影响的要求）。而单纯采用效果原则一直被认为会造成与其他国家主权管辖权的冲突，也影响其他国家的主权和经济利益。 域外管辖的中国实践 因此，一个合理且可以理解的担心是，由於缺乏判断”排除、限制影响”的更具体和具有可操作性的指引，商务部在实践中的自由裁量权极大，在影响反垄断法实施的持续性稳定性的同时，也会给相关交易方带来对於与中国几无影响的交易是否需要向中国商务部进行申报的困惑。相信在Comcast收购这种大型交易中，交易相关方已就是否需要向商务部申请反垄断审查聘请了专业人员并寻求意见。或许真如评论所说该交易与中国并无直接关系，从而使得该等专业人士在从中国反垄断审查角度进行分析后认为该交易无需向商务部进行申报（也可能是专业人士给出了提示，即取决於商务部的自由裁量，但相关方经权衡后选择忽视这种提示）。但在这种情况下，交易相关方至少应当对这种域外管辖的适用保持谨慎，尤其是中国市场未来可能将成为其业务（包括主题公园）的重点。根据《关於经营者集中申报的指导意见》，经营者可就经营者集中问题向商务部申请商谈，以获得商务部的指导意见。因此，申请商谈或许是避免这种商务部主动进行反垄断审查的一种选择，毕竟过往商务部一直被指责其总是被动接受反垄断审查申报而不主动履行其反垄断执法职责。 当然，对於商务部有关Comcast收购的表态，其实还有一个大家可能需要注意的问题。根据中国《未依法申报经营者集中调查处理暂行办法》，商务部对於采用书面形式并提供举报人和被举报人基本情况、涉嫌未依法申报经营者集中的相关事实和证据等内容的举报，有义务进行必要的核实。因此，一种可能的情形是，针对Comcast收购，商务部是在收到符合形式要求的举报后，依法履行其在法律规定下的进行反垄断程序性审查的职责。当然，至於这次表态是否是真的只是依法履行其程序性审查职责，还是会出现2014年三大航运巨头那样的结局，仍未可知。 –––––––––––––– |
Extraterritorial jurisdiction of anti-monopoly law from concentration of undertakings perspective
