A more complete playbook: SAMR strengthens its merger review framework with new merger assessment guidance

On 16 December 2025, China’s State Administration for Market Regulation (SAMR) issued the Guidance on the Review of Non-Horizontal Concentration of Undertakings (the Non-Horizontal Guidance), establishing for the first time a formal analytical framework for assessing vertical and conglomerate transactions. It complements SAMR’s existing merger review rules, in particular the Guidance on the Review of Horizontal Concentration of Undertakings (the Horizontal Guidance) published on 20 December 2024. 

This marks a significant step forward in SAMR’s attempt to articulate a coherent merger review framework across the full spectrum of transaction types and to provide greater transparency and predictability for businesses. 

Below we focus on the aspects of the guidance most relevant in practice.

Quantitative frameworks based on market shares and concentration levels are introduced to screen potential competitive effects, which are more granular and, in certain respects, more stringent than the EU and US approach (see Annex below for a comparison of the different thresholds).

• SAMR will make a preliminary finding of likely anticompetitive effects at market shares as low as 35% for both horizontal and non-horizontal transactions, levels that would not, in themselves, raise strong concerns in the EU or US.

  In practice, these thresholds should not be overstated. Most transactions remedied by SAMR involved market shares well above these levels. But it does suggest that the parties should expect closer scrutiny and will need to put in more advocacy to convince SAMR that competition concerns are not warranted even when the market shares are still moderate. 

• At the “safe harbor” end, SAMR recognizes that a horizontal transaction is presumed not to be anticompetitive where the combined share is below 15% (compared with 25% in the EU) and sets a 25% threshold for non-horizontal transactions (versus 30% for establishing an “unlikely anticompetitive” case in the EU, subject to an Herfindahl-Hirschman Index (HHI) below 2,000).  

  For non-horizontal transactions, the “safe harbor” is rebuttable under certain circumstances, including: 

  (a) a party to the concentration likely to quickly expand, leading to significant underestimation of the potential market power of the entity post-transaction;

  (b) significant cross-shareholdings or cross-directorships, or cross-ownership among market participants;

  (c) a party to the concentration being a maverick firm likely to disrupt coordinated conduct;

  (d) indications of past or ongoing coordination;

  (e) the integration of competitively significant assets (such as key inputs, IP, infrastructure, user base or database), and 

  (f) adverse effects on market entry, innovation, consumers, or national economic development.

  They are largely aligned with the EU framework for rebutting an “unlikely anticompetitive” case, but further capture circumstances under (e) and (f), which gives SAMR greater flexibility to intervene where strategic assets or broader policy considerations are in play. 

• SAMR applies a similarly structured approach to coordinated effects in horizontal transactions, drawing on the criteria for collective dominance under the Anti-monopoly Law. Specifically, SAMR will tend to find coordinated effects where: 

  (a) the merged entity and one competitor each has a market share of above 10% and together have a combined share of at least two-thirds of the market;

  (b) the merged entity and two competitors each has a market share of above 10% and together have a combined share of at least 75% of the market; or 

  (c) the transaction would eliminate a maverick firm that may constrain coordination in the relevant market or would substantively eliminate its incentive to do so. 

  In Codelco/SQM (2025), SAMR found an increased risk of coordination noting that, amongst other factors, the merged entity and its two largest competitors had maintained a combined market share above 75% since 2021. 

In addition to the quantitative frameworks, digital markets feature prominently in both sets of guidance, particularly in the following areas:

• Bringing self-preferencing into merger control: In vertical transactions, SAMR will assess whether the merged entity would have both the ability and incentive to gain competitive advantages. This includes assessing whether it could access the competitively sensitive information of undertakings in upstream or downstream markets or favor its own competing operations in those markets. This effectively brings self-preferencing concerns forward into merger control, which may be particularly relevant for vertical transactions involving digital platforms.

  This is not SAMR’s first attempt to introduce rules targeting self-preferencing. Back in 2022, it proposed, but ultimately dropped from the final text, a rule that would have restricted dominant platforms from giving preferential display or ranking to their own products, or from using non-public data of third-party operators to support their own offerings. The Non-Horizontal Guidance now revives these concerns in a different form, suggesting that similar issues may be addressed at the merger control stage.

• Ecosystem theories of harm in conglomerate transactions: The Non-Horizontal Guidance also explicitly recognizes that conglomerate transactions in certain industries (notably platform markets) may be anticompetitive by way of ecosystem entrenchment. Globally, ecosystem theories of harm have featured prominently in several recent high-profile merger investigations in digital markets. In China, however, there is no published merger decision where SAMR relied on this theory of harm. By contrast, this theory of harm has been reflected in SAMR’s abuse of dominance penalty decisions against major platforms, where SAMR considered that the ecosystems contributed to the entrenched market power of the digital platforms.

  Given the controversy over these novel theories of harm and lack of precedents in China, these two provisions gave rise to debate during the consultation process of the guidance. Nonetheless, their retention in the final text indicates that self-preferencing and ecosystem effects are likely to remain on SAMR’s enforcement radar, particularly in digital markets. 

This guidance, while not binding, largely reflects SAMR’s decisional practice in recent years and sets the tone for SAMR’s enforcement in the future. It provides valuable insight into SAMR’s enforcement thinking and allows the transaction parties to better anticipate SAMR’s potential areas of focus. For businesses, understanding where a transaction sits within SAMR’s analytical framework and preparing advocacy accordingly will be critical to navigating China’s increasingly complex merger review process.

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Annex: Summary of SAMR’s market shares and HHI thresholds and a comparison with the thresholds adopted in the EU and the US