A Study Of Divestiture System Under Undertakings' Concentration Control

The Antimonopoly Law was issued on August 30th, 2007 and executed on August 1st, 2008. The issuance of the Antimonopoly Law is an important milepost for the construction of the market economic legal system of China, since when the framework of the competition law has been basically formed.It is aimed to prevent the weaken of the market competition, which will lead to damage the interest of consumers, because of concentration of undertakings, for the setting up of the Controlling System of Concentration of Undertakings in the Antimonopoly Law. The controlling of concentration of undertakings is not just to prohibit a concentration or allow one. Allowing concentrations with conditions is a very important measure in the Controlling System of Concentration of Undertakings. The aforesaid conditions could be structural conditions, behavioral conditions, and also could be both structural and behavioral conditions. Divestiture is one of the structural conditions.In Chapter one, the author focuses on the position of divestiture in the Controlling System of Concentration of Undertakings, the definition of divestiture, and the function of divestiture. On the basis of Chapter one, theoretical foundation and operation mechanism are deeply discussed in Chapter two. A part of assets of the undertakings involved in the concentrationis stripped and transferred to a competitor in the market, so as to restore and maintain the competition which may be reduced by the concentration. Then the practical application of divestiture system is analyzed in Chapter three, in which the applicable scope, principles and the focuses of implementation are discussedA portion of assets of the concentrated undertakings is stripped in divestiture system to recover or maintain the competition of the market; however, the divestiture cannot be applied to every case. Divestiture shall follow the principle of restoring competition, the principle of controlling implementation cost, the principle of considering of the characteristics of the relevant market and the principle of considering of the past behaviors of the undertakings besides the basic principles of the Antimonopoly Law. The focuses of implementation of divestiture are the definition of divestitures, the selection of buyers, the appointment ofthe divestiture trustees and the supervision trustees.Divestiture system of China was founded almost three years after the issuance of the Antimonopoly Law. On the basis of analyzing the divestiture system and cases in China, I think there still are deficiencieswith the divestiture system. In my opinion, the deficiencies exist in conditions with stripped assets, independence standard of related subjects, fiduciary duty of divestiture trustee and supervision trustee, the scope and the course of the divestiture system, and the information disclosure obligations of antimonopoly enforcement agencies.Divestiture is a system that has very high requirements for professional and need cooperation of experts on many aspects. Since the system has been issued, the author hopes the implementation of it could be better.