China's State Administration for Market Regulation. Photo: VCG

The State Administration for Market Regulation (SAMR) on Tuesday released a revised draft of its Guidelines for Overseas Antitrust Compliance for Enterprises for public comment, aiming to help Chinese companies better understand the latest extraterritorial antitrust trends and guard against related legal risks.

Focusing on five main areas, the revision is aimed at reflecting the latest regulatory trends and developments abroad. The draft summarized and added changes in antitrust legislation and enforcement, including embedding overseas antitrust enforcers' attention to the digital economy into chapters on monopoly agreements, abuse of market dominance and concentrations of undertakings.

Notably, the revision clarified the latest merger filing thresholds in jurisdictions such as the EU, the US and Germany, and reminded companies to pay attention to foreign investment security review and foreign subsidy review regimes.  

Comments are due by September 29. The previous guideline was released in 2021.

Over the past five years, major jurisdictions worldwide have reformed their antitrust systems and enforcement, upgraded regulations, stepped up enforcement, tightened regulation of digital platforms and tightened cross-border merger and acquisition (M&A) reviews. The existing guidelines do not reflect enforcement trends in new areas such as the digital economy in merger reviews, the SAMR said. 

"Forming a new version aligned with international frontiers and covering a more comprehensive range of risk scenarios is a necessary response to the new normal of extraterritorial regulation."

The top Chinese market regulator noted that China's foreign trade scale is expanding and Chinese companies are accelerating their "going global" drive but some key industries and companies have encountered overseas antitrust investigations or lawsuits, increasing the challenges and risks of "going global." 

Updating the guidelines in response to real demand and the concerns of companies operating at scale, digitally and globally will help make the guidance more targeted and promote compliant overseas expansion, the SAMR said.

Chinese analysts said that the draft revision is an update that aligns more closely with current antitrust enforcement trends amid the rapid expansion of the digital economy and the rising tide of global trade protectionism. It will make it easier for Chinese companies to identify risks when investing, acquiring or operating abroad, they noted.

Compared with the existing guideline, the updated provisions are more targeted and practical, which will help enterprises better identify and mitigate risks in advance during international operations, Hu Qimu, a professor at the Maritime Silk Road Institute of Huaqiao University, told the Global Times on Tuesday.

Notably, the EU and the US, China's second- and third-largest trading partners, are also the regions where Chinese companies face the most antitrust investigations and litigation, making them high-risk areas for overseas antitrust compliance. 

By focusing revisions on these key markets, the policy is expected to better match real business scenarios, improve the efficiency of risk identification, and reduce uncertainty in M&A compliance, Hu said.

As some jurisdictions are coming up with increasingly stringent antitrust reviews and M&A reviews, the draft updated version is a practical and timely response.

Jian Junbo, deputy director of the Center for China-Europe Relations at Fudan University's Institute of International Studies, told the Global Times on Tuesday that the EU is placing increasing emphasis on competition issues, with antitrust enforcement and merger reviews becoming ever more stringent, making related guidance highly relevant and timely for companies expanding overseas. 

Companies planning mergers, acquisitions, or investments in Europe must give these rules close attention to avoid potential compliance risks and associated losses. From this perspective, such guidance serves as a form of "prevention before problems arise," offering clear practical value and necessity, Jian noted.

The draft revision reflected a proactive response to the risks facing companies engaged in international operations, while also signaling a broader policy shift from simply encouraging firms to "go global" to promoting "high-quality global expansion," Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Tuesday.

In recent years, the number of cases involving Chinese companies facing antitrust investigations and lawsuits abroad has risen steadily.

Against this backdrop, the draft has a clear positive role in encouraging Chinese firms to strengthen overseas antitrust compliance awareness and improve risk prevention capabilities, Li said, adding that further supporting measures will be needed for companies to achieve practical compliance capability.

The revised draft of the guidelines further refines rules for relevant jurisdictions, selecting representative jurisdictions with active antitrust enforcement, large amounts of Chinese investment and M&A, and distinctive antitrust legal systems. It turns the current guideline's general reference to "some jurisdictions" into enumerated details.

It also improved channels for rights protection, remedies and compliance advisory services by adding a dedicated chapter and typical cases to strengthen interpretation of the law through cases. The draft revision also added a risk identification checklist so that companies could do a self-check, be reminded of key points for building a compliance management system and prepare response procedures for events such as antitrust litigation.