Q1

What kinds of infringement has the antitrust authority been focusing on recently? Have any industry sectors been under particular scrutiny?

A：China’s antitrust authority, the State Administration for Market Regulation (SAMR), has been intensifying its focus on merger control area, monopoly agreements and abuse of market dominance behaviours. To be specific, the anticompetitive conduct that SAMR focuses on includes illegal transactions failure to file an antitrust declaration or implement the transaction prior to obtain antitrust review approval, horizontal monopoly agreements to restrict production and price-fixing and abuse of the dominant market position by restricting a counterparty to transaction with it without justification. In the meantime, as the phenomenon of some industry associations improperly interfering in competition and organising members to engage in monopoly behaviour has gradually become prominent, SAMR has paid great attention to the behaviour of industry associations providing convenient conditions for the industry operators to reach and implement monopoly agreement.

In view of SAMR’s enforcement cases announced recently, we believe that competition concerns are mainly focused on undertakings in the field of public welfare and livelihood, including medicine, automobile industry, public utilities, etc, while paying close attention to competition issues in high-tech and digital economy. In 2024, SAMR announced a total of eight horizontal monopoly agreement cases throughout the year, covering motor vehicle inspection, building materials, public utilities, real estate valuation and automobile sales, with a total fine of about 12.687 million yuan. At the same time, a total of seven cases of abuse of market dominance were announced throughout the year, involving medicine, public utilities and financial data, with a total fine of about 88.4 million yuan.

Q2

What do recent investigations in your jurisdiction teach us?

A：Complaints and reports by consumers, transaction counterparts or competitors are of vital importance to antitrust investigation cases. In 2024, the proportion of reports in the sources of antitrust investigation cases increased significantly, becoming an important source of clues for antitrust investigation. These reports include dealers reporting that manufacturers are suspected of vertical price monopoly, dealers reporting that upstream companies abuse their dominant position by refusing to trade or setting unfairly high prices, and competitors or related individuals reporting that cases should be reported but were not reported. Not only large companies are vulnerable to antitrust reports, investigations and lawsuits due to their high market share. In practice, many small and medium-sized enterprises have also been subject to antitrust investigations due to reports of suspected monopoly agreements, and have ultimately been handed high administrative fines. In addition to the daily inspections and special investigations by law enforcement authorities, or assigned or transferred by higher-level competent authorities, the amount of antitrust investigation cases formed by authorities with other regulatory functions to transfer evidence in the process of investigating other cases is also on the rise. In the Guidelines on Antitrust Compliance for Undertakings, the leading compliance management department of undertakings is required to organise and coordinate relevant departments and personnel to cooperate with the dawn raids. The business and functional departments are also obliged to cooperate with investigators to provide the tickets, bills, records, accounting books and other information required by the regulator, and shall perform no acts that hinder the dawn raids; otherwise, both the company and its legal representative and the relevant personnel of the business department shall bear the legal responsibilities according to the Anti-Monopoly Law.

Q3

Have there been any recent developments in terms of dawn raids? Has the competition authority raided individual homes as part of any probes and have any of these searches been challenged successfully or otherwise?

A：In 2023, SAMR, together with provincial supervision departments, announced 19 administrative penalty cases and conducted on-site investigations in 16 of them (accounting for 84 per cent of the total amount of cases), an increase of 67 per cent compared with 2022. Since the end of 2024, SAMR has launched antitrust investigation into suspected violation of the Anti-Monopoly Law by giant US technology companies such as Nvidia and Google. At the same time, it is reported that SAMR is considering launching the new antitrust investigation into Intel and Apple’s App Store. To our knowledge, SAMR has not yet raided individual homes as part of an investigation. According to precedent public cases, the main places targeted by dawn raids include business premises of operators, such as business stores, offices, factories, workshops, warehouses, data rooms, IT departments, etc. Other relevant places, such as upstream suppliers, downstream customers and business outsourcing agencies of the investigated parties, may also become the locations targeted by dawn raids. If dawn raids are carried out on personal homes, the subject of the investigation are also obligated to cooperate and shall not refuse to provide relevant materials and information, or provide false materials and information, or conceal, destroy or transfer evidence. However, if the law enforcement agency violates relevant regulations during the inspection, the operator is entitled to protect the legitimate rights and interests by reporting and appealing after the inspection.

Q4

How is the leniency system developing, and which factors should clients consider before applying for leniency?

A：The Provisions on the Prohibition of Monopoly Agreements implemented in 2023 clearly expand the application scope of the subject of the leniency system, which is consistent with the revised Anti-Monopoly Law. That is, if the legal representative bears personal responsibility and the person in charge and the person directly responsible take the initiative to report the relevant situation of the monopoly agreement to the antitrust law enforcement agency and provide important evidence, the law enforcement agency may reduce the penalty by 50 per cent or exempt them from punishment.

In terms of application materials for the application of the leniency system, the Provisions on the Prohibition of Monopoly Agreements have more specific provisions on ‘reporting on monopoly agreements’ compared with the Guidelines on the Application of Leniency Program in Horizontal Monopoly Agreement Cases implemented in 2019. The information required to apply for the leniency system includes the undertakings participating in the monopoly agreement, the range of commodities involved, the content and method of reaching the agreement, the specific implementation of the agreement, and whether to apply to other overseas law enforcement agencies.

According to the two cases that were subject to the leniency in 2024, there is no significant change in the considerations for applying for leniency before filing a case. It is still necessary to proactively report the relevant circumstances of reaching a monopoly agreement and provide important evidence to assist the authorities greatly improve law enforcement efficiency.

Under current regulations, an undertaking can submit a report requesting leniency either in writing or orally. However, for the format of the report, no uniform requirements or standardised documents have been provided by the law enforcement department. To facilitate preparation of the application report and improve the transparency of leniency applications, a unified report template is of vital importance.

Q5

What means exist in your jurisdiction to speed up or streamline the authority’s decision-making (eg, settlement procedure), and what are your experiences in this regard?

A：The settlement or commitment procedure can be applied in some antitrust cases to suspend the proceeding during the investigation of the abuse of dominance or restrictive agreement. The investigated parties may propose commitments to rectify the conduct, according to article 53 of the Antitrust Law. If the commitments are accepted and well performed, the investigation can be closed without a formal finding of infringement. Therefore, the legal consequence of the settlement procedure is technically equivalent to the charged acts and constitutes no violation of the Antitrust Law. However, the investigation may still be reopened if the commitments have not been fulfilled, if the facts on which the investigation was based have changed materially, or if the decision to suspend the investigation was based on incomplete or untrue information.

The timing of a request to suspend an investigation needs to be well considered. If the law enforcement department considers that the suspected acts constitute a monopoly agreement after investigation and verification, the application to suspend the investigation cannot be accepted. How to judge the proper time to apply the settlement procedure should be based on the degree of investigation cooperation, the use of investigation resources and the attitude of the investigator. From our viewpoint, when making a commitment to suspend the investigation, the following factors can be considered: whether continuing the investigation would consume and waste a large amount of law enforcement resources; whether the adverse consequences of the act could be eliminated by rectification that is conducive to achieving the purpose of law enforcement; whether the result of ‘suspending the investigation’ would adversely affect the public interest; and whether the suspended investigation decision would be controversial.

Q6

Tell us about the authority’s most important decisions over the year. What made them so significant?

A：At the end of December 2023, the Office of the Anti-Monopoly and Anti-Unfair Competition Commission of the State Council and SAMR issued a notice on the establishment of the anti-monopoly ‘Three Notices and One Letter’ system in China's antitrust enforcement. The three notices include the interview notice, investigation notice and administrative punishment decision (to the business operator) or administrative recommendation (to the administrative organ), and the one letter is the reminder letter.

With the improvement in economic development and social governance, only adopting rigid law enforcement can no longer meet the current antitrust law enforcement practice. Through the hierarchical regulatory measures of reminding and urging, administrative interviews, filing investigations, administrative penalties or administrative suggestions, the Three Notices and One Letter system has further enriched the flexible regulatory means of anti-monopoly. It is conducive to creating a whole-chain system before, during and after the supervision, and has become an important means for the normalisation of antitrust supervision. We expect that this flexible regulatory approach will be applied more comprehensively in future antitrust enforcement practices. Meanwhile, with the further enrichment of regulatory measures, antitrust cascade supervision will become a more normal law enforcement method, which puts forward higher requirements for enterprises’ antitrust compliance and provides opportunities and guidance for enterprises to prevent and curtail risks.

Q7

Is the competition authority working with other agencies, be it nationally or internationally, in any cartel probes?

A：At the domestic level, SAMR actively cooperates with the China Securities Regulatory Commission, the National Development and Reform Commission, the Ministry of Civil Affairs, the National Energy Administration, the Ministry of Agriculture and Rural Affairs, the Civil Aviation Administration of China and other departments to strengthen coordinated supervision through joint issuance of documents and joint law enforcement. For example, in the process of supervision of listed companies by the China Securities Regulatory Commission and the exchanges, companies are required to respond and clarify suspected monopolistic acts through supervision letters (feedback letters) and other means. In recent years, many listed companies have announced monopoly investigations or related matters. In November 2024, the National Energy Administration established a cross-departmental collaborative supervision mechanism with SAMR to strengthen anti-monopoly compliance guidance by conducting joint special inspections, joint administrative guidance, and strengthening law enforcement cooperation by prompt transfer.

On the international front, SAMR has been strengthening its relationships with competition authorities around the world, including the European Commission, the US Federal Trade Commission, and others. These collaborations often involve sharing information, coordinating on global investigations and aligning on enforcement actions against multinational cartels. For instance, SAMR has been involved in joint investigations with agencies such as the European Commission and the Japan Fair Trade Commission, especially when it comes to global industries such as electronics, automotive parts and pharmaceuticals.

The China competition authority has recognised the importance of international cooperation as global cartels can often impact multiple countries, and working with foreign regulators allows for more comprehensive enforcement and deterrence. Additionally, China has become increasingly active in international fora, such as the International Competition Network, to discuss best practices and share information on cartel enforcement.

Q8

What is the level of judicial review in your jurisdiction? Were there any notable challenges to the authority’s decisions in the courts over the past year?

A：As for the authority’s role, SAMR (or its predecessor bodies) generally has the responsibility for both investigating infringements and issuing decisions. It is empowered to take decisions without needing approval from another government agency, unless the case is exceptionally complex or involves multiple sectors. Judicial review in China, especially in administrative law and competition law matters, is relatively limited. Courts in China can review administrative decisions, but the scope of that review tends to be more focused on whether procedures were followed correctly, rather than on the substance of the decisions themselves. Courts are also generally less inclined to overturn the decisions of regulatory bodies, especially if the decision is within the agency's discretion. According to incomplete statistics, the overall volume of antitrust administrative litigation is relatively low, and only after 2014 has there been a public ruling. As at 2024, there have been 15 cases, which is far from the volume of antitrust civil disputes. On the other hand, in the cases where the judgment results have been announced, the plaintiffs are all administrative counterparts who have been punished by antitrust administrative penalties, and the courts have all made judgments in support of the enforcement agencies. From the perspective of the causes of action, the plaintiffs’ claims can be roughly divided into three categories: (1) claiming that the law enforcement agency’s main evidence was insufficient or that the applicable laws and regulations were incorrect when determining the illegal behaviour; (2) claiming that the law enforcement agency’s determination of the penalty amount was inappropriate; and (3) claiming that the law enforcement agency’s enforcement procedures were illegal. In all cases, the plaintiffs raised the above three claims at the same time, hoping to overturn the administrative penalty decision as much as possible through a ‘multi-pronged approach’.

Q9

How is private cartel enforcement developing in your jurisdiction?

A：Historically, private claims related to cartels in China have been less prevalent and less developed than those in jurisdictions such as the European Union and the United States. Recently, however, there has been a marked shift towards increased private enforcement. Private claimants are becoming more proactive in pursuing damages for antitrust violations, including cartels. Meanwhile, in past practice of private litigation, plaintiffs’ winning rates are very low, and almost all plaintiffs’ losing cases relate to insufficient evidence. It can be said that ‘difficult to prove’ has consistently been a prominent bottleneck in antitrust private law enforcement. In the judicial interpretation of antitrust civil litigation that took effect on 1 July 2024, there are a series of provisions that reduce the burden of proof for the plaintiff in many aspects, including clarifying the basic facts of exemption from evidence in subsequent civil litigation, explaining the duty of proof of plaintiff and defendant under various circumstances, and ruling for shifting the burden of proof under different sorts of cases.

Private claims in China tend to be settled both in and out of court. Out-of-court settlements are increasingly common, as parties frequently prefer to reach a compromise rather than engage in protracted litigation. Nevertheless, there has been a notable rise in the number of cases proceeding to court, particularly as awareness of antitrust issues continues to expand.

Q10

What changes do you anticipate to cartel enforcement policy or antitrust rules in the coming year? What effect will this have on clients?

A：In the upcoming year, several changes to cartel enforcement policy and antitrust rules in China can be anticipated, reflecting both the evolving economic landscape and the government's strategic priorities. With the new antitrust law being implemented, and various supporting regulations that delineate provisions for illegal acts, an increase in the severity of penalties for cartel activities can be expected, including higher fines and more stringent sanctions being imposed on companies found guilty of antitrust violations. Meanwhile, antitrust legal provisions will continue to evolve, with China potentially introducing new guidelines and amending existing laws to address emerging issues in antitrust enforcement, such as the role of artificial intelligence in facilitating cartels or the impact of data-driven business models. Companies across various sectors will need to reassess their compliance programmes to mitigate the risk of hefty fines. This may involve conducting internal audits, revising contracts and ensuring that employees are well trained in antitrust regulations. Legal departments and compliance teams must remain vigilant regarding these changes and promptly integrate new requirements into their business practices. This process may include revising legal agreements, updating risk assessments and ensuring ongoing compliance with the latest rules.

Chinese regulators are expected to strengthen cooperation with international counterparts to address cross-border cartels more effectively. This may entail increased joint investigations and information-sharing agreements. Multinational companies with operations in China must be prepared for coordinated enforcement actions across jurisdictions, which is likely to require the alignment of compliance strategies across diverse markets and a proactive approach to identifying potential risks.

Q11

What was the most interesting case you worked on recently?

A：Providing investigation services for an industry association suspected of implementing a monopoly agreement entails significant complexities. This case involves a horizontal monopoly agreement, wherein demonstrating the reasonableness and legality of such an arrangement is challenging. It is necessary not only to prove the existence of exemption circumstances but also to demonstrate that the agreement will not substantially disrupt the normal market competition order and can bring corresponding benefits to consumers. To conduct a comprehensive legal and economic argument, it is crucial to accurately define the relevant market and to combine the newly issued antitrust regulations relating to industry associations at that time.

Q12

If you could change one thing about the area of cartel enforcement in your jurisdiction, what would it be?

A：Enhancing transparency and due process in investigations and enforcement actions would contribute to a more robust, fair and predictable regulatory environment, benefiting both businesses and regulators. More transparent processes would encompass detailed guidelines delineating what constitutes cartel behaviour and the criteria employed in investigations. This clarity would help businesses to better understand the parameters of legal conduct, thereby reducing the risk of unintentional violations. A transparent and well-documented approach to enforcement would ensure consistency in case management, allowing companies to anticipate regulatory responses and plan their strategies accordingly.