On 20 September 2012, the European Commission Directorate-General for Competition and China’s National Development and Reform Commission (“NDRC”) and State Administration for Industry and Commerce (“SAIC”) signed a Memorandum of Understanding to increase their cooperation and coordination on antitrust matters between the EU and China.1 The MOU provides a framework for cooperation and coordination relating to “legislation, enforcement and technical cooperation regarding cartels, and other restrictive agreements and the abuse of dominant market positions.”2

The MOU is indeed an important additional step, following years of dialogue between the jurisdictions under the 2004 Competition Policy Dialogue between the European Commission and the Chinese Ministry of Commerce (“MOFCOM”).3 (China’s Antimonopoly Law delegates competition enforcement authority across these three agencies: MOFCOM is tasked with merger enforcement; the NDRC with enforcement of price-related anticompetitive conduct; and the SAIC with non-price related anticompetitive conduct.) MOFCOM has been engaged in its dialogue with the European Commission under the 2004 Dialogue and, presumably for this reason, did not sign the current MOU. Without MOFCOM as a signatory, the MOU not surprisingly excludes “matters relating to concentrations (or mergers)” from its coverage. The policy objectives of the MOU and the 2004 Dialogue, however, are largely the same, likely reflecting the intention to bring the NDRC and SAIC onto equal footing with their sister agency.

The MOU does, however, go notably further than the 2004 Dialogue, providing a framework for cooperation at the working level on specific cases. “Should the two Sides pursue enforcement activities concerning the same or related matters, they may exchange non-confidential information, experiences views on the matter and coordinate directly their enforcement activities, where appropriate and practicable.” While regulators are of course able to exchange non-confidential information even in the absence of such an agreement, the MOU provides the framework for them to do so and the “tone from the top” encouraging such cooperation. Like many international cooperation agreements, the MOU does not obligate the European Commission or the Chinese agencies to exchange information if it would violate local laws or regulations. In addition, the agencies are not required to exchange information if it would “be incompatible with the interests of that Side in the application of its laws.” It remains to be seen how the exception could be used in practice; for example, whether it may be employed as a policy tool.

Recognizing the increasing importance of the role China will play in antitrust enforcement and the world economy, the MOU has the potential to be an important step further toward increasing regulatory efficiency and harmonizing antitrust enforcement. The European Commission is of course not alone in taking such steps with China. The United States and China’s three antitrust agencies entered into a similar MOU on 27 July 2011.4 And the US agencies further supplemented the MOU on 29 November 2011 with specific guidance for cooperation in merger cases.5 Now more than ever, it is important for the European Union and China (and of course the United States) to continue to engage one another bilaterally and encourage active cooperation, specifically at the working level on actual cases.

Cooperation increases the likelihood of consistent and predictable outcomes, while also increasing the chances of resolving any differences early on and minimizing regulatory delay. Sharing information and experience also allows regulators to move quickly up the learning curve in their analysis of particular markets, conduct and, as relevant, in the assessment of remedies.6

While the extent of cooperation among regulators can certainly stand to improve, the MOU provides the framework and encouragement for it to do so. Such increased cooperation and communication should accrue to the benefit of businesses and enforcers alike.