The “Notice on Further Promoting Fair Competition Review” has come into effect on May 9, 2020

In 2016, the State Council released the “Opinions of the State Council on Establishing A Fair Competition Examination System in the Building of the Market System” (Guo Fa [2016] No.34) (hereinafter referred to as the “Opinions”). The “Opinions” has been implemented for several years, and there are a few problems in practice. Therefore, on May 9, 2020, the SAMR, NDRC, MOF and MOFCOM have jointly issued the “Notice on Further Promoting Fair Competition Review” (Guo Shi Jian Fan Long Duan [2020] No.73) (hereinafter referred to as the “Notice”). The main contents include:

1. To add the object of review

The “Opinions” prescribes that the specific administrative policy measures shall be decided case by case, however, those specific administrative policy measures are required to conduct fail competition review in the “Notice”.

2. To add detailed standard of review 

The “Notice” has listed more standards: a) the Policy-Making Organs shall not require unreasonable and discriminatory conditions for market exit; b) the Policy-Making Organs shall not designate operators by disguised form by rewards or fiscal subsidies; c) the Policy-Making Organs shall not implement discriminatory policies for non-local goods; d) the Policy-Making Organs shall not affect the fair usage of manufacturing factor; and e) the Policy-Making Organs shall not implement discriminatory supervision on different operators; and so on.

3. To optimize the method of review

The “Opinions” requires the Policy-Making Organs shall conduct self-review, by which the Policy-Making Organs may not get to know their own mistakes. The “Notice” encourages the local Policy-Making Organs to establish a unified internal review system, or submit the object of review for a second-review by the specific organs after the self-review.

4. To add a third-party assessment

The “Notice” encourages the Policy-Making Organs to entrust a professional agency for assessment, and clarifies the circumstances in which a third-party assessment is given priority: (a) The policy is intended to apply exceptions; (b) The policy has a significant impact on social and public interests; (c) The involved Policy-Making Organs have huge disputes on a specified policy; and (d) The polices and measures have been reported by several units or individuals for its violations of fair competition review standards.

In addition, for the perspective of updating the working mechanism, the “Notice” has added a spot check mechanism, improved the report processing and response mechanism, and strengthened the requirements for the application of information technology.