China will enforce Antitrust laws (anti monopoly laws or competition laws) from Friday, August 1st, while India will put the same laws into place by the end of this year. Antitrust laws are expected to delay or thwart high-profile cross-border mergers and acquisitions, in the burgeoning economies, lawyers and business executives warned the Financial Times.
China and India both will implement Antitrust laws based on the European Union model, which will essentially prohibit agreements or practices that restrict free trade and competition between business entities. The law will help control monopoly practices by firms which might use predatory pricing, price gouging, refusal to deal etc. The aim of the law which is to promote fair competition by supervising mergers and acquisitions of large corporations, including some joint ventures, is a cause for concern of many multinationals in the region.
In China, deals involving companies with a combined global turnover of US$1.5bn – and where at least two of the parties each have turnover in China of US$60m – are likely to have to file for approval. China already has ambitious plans to sue Microsoft’s pricing and the dominance of its products on the Chinese market.
India’s thresholds are equally complicated, but draft guidance suggests that they could be set even lower in many cases. India’s beefed-up monopoly laws allow the new Competition Commission of India up to 210 days to assess merger filings – far longer than in the EU or US.
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