Three key points to know about Ali, Yuewen and Fengchao being punished

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With regard to the case of Ali, Yuewen and Fengchao being punished for violating the anti-monopoly law, Wang Xianlin, member of the expert advisory group of the State Council anti monopoly Commission and director of the competition law and Policy Research Center of Shanghai Jiaotong University, said that there are three key points to be clarified.
Key point 1: these three cases are all related operators who violate the statutory declaration procedures and are subject to administrative punishment, but do not involve substantive violations
According to the provisions of the anti-monopoly law and the State Council on the declaration standards of concentration of business operators, the turnover of the three concentration of business operators involved in this case obviously exceeded the declaration threshold, but the relevant operators did not report to the State Administration of market supervision and administration according to law, and were punished. As for the substantive problems, the three administrative penalty decisions clearly indicate that the market supervision administration has assessed the impact of relevant market competition, and believes that the concentration will not have the effect of eliminating or restricting competition.
Key point 2: further clarify the scope of anti-monopoly review on concentration of business operators
One of the important reasons why these three cases are concerned is that they all involve agreement control, so they are relatively complex. The structure of agreement control can be changed into interest entity, also known as agreement control. It means that the actual operating company is not controlled by equity, but controlled by signing various agreements.
In China, the threshold of anti-monopoly declaration of concentration of business operators mainly considers the two elements of control right and turnover, and does not exclude the agreement control framework from the declaration requirements. Therefore, when the transaction involving the agreement control structure reaches the control right and turnover threshold, the enterprise should also declare the concentration of business operators.
In fact, in July 2020, the General Administration of Market Supervision approved the new joint venture between Shanghai Mingcha zhegang Management Consulting Co., Ltd. and Huansheng information technology (Shanghai) Co., Ltd. In November 2020, the General Administration of Market Supervision issued the draft of anti-monopoly guidelines in the field of platform economy, which clearly pointed out that the concentration of business operators involving the framework of agreement control belongs to the scope of anti-monopoly review of concentration of business operators. This punishment is further clear, involving the agreement control structure of enterprises should be in accordance with the law to declare concentration, illegal implementation of concentration will be subject to administrative penalties.
Key point 3: the amount and range of the fine are legal and reasonable
Although the operators involved in these three cases are all large-scale and highly concerned enterprises, the fines are only 500000 yuan each, which gives the impression that the punishment is not strong enough. However, according to the existing law, this is the maximum amount of fine that can be given to the illegal implementation of the concentration of business operators. According to the provisions of Article 48 of the anti monopoly law, if an operator violates the provisions of this law, it shall be ordered by the antimonopoly law enforcement agency of the State Council to stop the concentration, dispose of shares or assets within a time limit, transfer business within a time limit and take other necessary measures to restore it to the state before concentration, and may be fined not more than 500000 yuan.
Of course, according to the relevant provisions of the revised draft of the anti monopoly Law (Draft for public opinions) published by the General Administration of market supervision in January this year, if the concentration of business operators has illegal acts including “concentration should be carried out without declaration”, the anti-monopoly law enforcement agency shall impose a fine of less than 10% of the sales volume of the previous year. If this kind of law is to be amended in the future, it will be a big risk.