Mainland China

The Anti-Monopoly Bureau of SAMR consists of 10 divisions/offices, among which 3 deal with general matters and 7 on law enforcement work. The total number of staff is 41.

Under the Provisions on Function Allocation, Organizational Structure and Staffing of the State Administration for Market Regulation, SAMR is responsible for the unified enforcement of the anti-monopoly law, its functions include: coordinating the advancement of competition policy implementation; guiding the implementation of the Fair Competition Review System; conducting reviews of the concentration of undertakings according to the law; enforcing anti-monopoly law against anti-competitive agreements, abuse of market dominance and abuse of administrative power that eliminates or restricts competition; providing guidance for enterprises in response to overseas antitrust litigations; and undertaking the daily operation of the State Council’s Anti-Monopoly Commission. The industry regulators in China are not empowered to enforce the anti-monopoly law.

Article 1 of the Anti-Monopoly Law (AML) stipulates clearly that the law is enacted “for the purpose of preventing and restraining monopolistic conducts, protecting fair market competition, enhancing economic efficiency, safeguarding the interests of consumers and the interests of the society as a whole, and promoting the healthy development of a socialist market economy”. China's anti-monopoly law enforcement agency strictly abides by the provisions of the AML when enforcing the law.

China's AML enforcement agency is committed to enforcing the law in a fair and impartial manner, so as to safeguard a level playing field for all market players. Apart from active enforcement actions to deter wrongdoers, we also focus on livelihood related matters with a view to resolving core and pressing issues concerning the national economy and people's livelihood.

In 2019, the agency will focus on areas concerning people’s livelihood, such as public utilities, Active Pharmaceutical Ingredients, construction materials and daily consumer goods. We will step up our efforts in investigating anti-competitive agreements and the abuse of market dominance, regulating abuse of administrative power, and making typical cases public. Meanwhile, we will also endeavor to review concentration of undertakings with enhanced effectiveness and efficiency.

Chapter 6 of AML sets out the rules for “investigation of alleged anti-competitive conduct”, in which Article 39 clearly stipulates the measures that the anti-monopoly law enforcement agency may take when investigating alleged anti-competitive behaviors: (1) conducting investigation on the alleged undertakings by entering their business premises or any other relevant places; (2) interviewing the alleged operators, stakeholders or any other relevant parties or individuals, demanding for details of the cases; (3) examining and copying documents such as licenses, agreements, ledgers, business correspondences of the alleged undertakings, stakeholders and any other relevant parties or individuals; (4) seizing and impounding relevant evidence; (5) inquiring details of the bank accounts of the undertakings.

Since implementation of AML, there were 2 cases involving overseas cartel conduct, namely the Japanese automotive parts case in 2014 and the RORO freight maritime shippers case in 2015, in which both the Chinese agency and law enforcement agencies in other jurisdictions have imposed penalties.

Paragraph 2 under Article 46 of AML lays down a systematic framework of the leniency policy: if the business operator, on its own initiative, reports the anti-competitive agreements to the agency with material evidence provided, the agency may, at its discretion, mitigate, or exempt the undertaking from penalties. To provide guidance on the application of the above provision to horizontal anti-competitive agreements, the Anti-Monopoly Commission of the State Council will issue the guideline on leniency policy in relation to horizontal anti-competitive agreements soon.

AML provides no criminal liabilities for an individual in breach of the law. However, Article 52 of AML stipulates: during the review and investigation conducted by the agency for enforcement of the AML, if an individual refuses to provide relevant documents or information, or provides false documents or information, or conceals, destroys, transfers evidence, or refuses to submit to or obstructs investigation in any other manner, the law enforcement agency shall order him to rectify relevant behaviors, and a fine of no more than RMB 20,000 shall be imposed on the individual; if the case is serious, a fine of between RMB 20,000 and RMB 100,000 shall be imposed on the individual; and if a crime is constituted, criminal liability shall be pursued in accordance with the law.

AML clearly defines the legal liability of individuals. Article 12 of the law prescribes, for the purpose of the law, undertakings include natural persons, legal persons, and other organizations that engage in manufacturing, selling of commodities or providing services. Article 52 mentioned above is also applicable here.

According to Article 53 of AML, where an undertaking is dissatisfied with the decision made by the agency for enforcement of the AML in accordance with the provisions of Article 28 (which prohibits or approves concentration of undertakings) or Article 29 (which conditionally approves concentration of undertakings) of the Law, it may first apply for administrative reconsideration; and if it is dissatisfied with the decision made after administrative reconsideration, it may bring an administrative litigation before the court. For decisions beyond the above scope, the undertaking may apply for an administrative reconsideration or bring an administrative litigation before the court.

Under the Administrative Procedure Law, the People's Court has the power to revoke or partially revoke six types of administrative decisions. So far, none of the administrative decisions including approval and penalties made by the AML enforcement agency have been revoked or partially revoked by the People's Court.

China's AML enforcement agency attaches great importance to economic analysis and values the use of economic tools in law enforcement. For important cases, a large number of third-party economic consulting firms will be involved to provide evidence analysis and support. About 30% of the law enforcement officers in our agency have an economic background.

China adopts a mandatory prior notification system for concentration of undertakings and uses the combined turnover of relevant undertakings as the criteria for filing. According to Article 21 of AML, when the intended concentration reaches the threshold level as set by the State Council, undertakings should declare in advance to the agency for enforcement of the AML under the State Council; they should not implement the concentration in the absence of such declaration.

Published by the State Council on 3 August 2008 and revised on 18 September 2018, Article 3 of the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings provides that, where a concentration of undertakings reaches any of the following thresholds, the undertaking(s) concerned should file a prior notification with the agency for enforcement of the AML, and no such concentration may be implemented without the clearance of prior notification: (1) the combined worldwide turnover of all the undertakings concerned in the preceding financial year is more than RMB 10 billion, and the turnover within China of each of at least two of the undertakings concerned in the preceding financial year is more than RMB 400 million; or (2) the combined turnover within China of all the undertakings concerned in the preceding financial year is more than RMB 2 billion, and the turnover within China of each of at least two of the undertakings concerned in the preceding financial year is more than RMB 400 million.

Since the implementation of AML, China’s anti-monopoly enforcement agency has made 2 decisions to prohibit concentration of undertakings, namely the case of Coca-Cola acquiring China Huiyuan Juice Group Limited in 2009 and the case concerning establishment of a network center by Maersk, Mediterranean Shipping Company and CMA CGM in 2014.

Since the implementation of China’s AML, there were a total of 39 cases in which concentration of undertakings were approved with remedy conditions. In 2018, there were 4 such cases, namely Bayer's acquisition of Monsanto, merger of Essilor and Luxitka, merger of Linde and Preske, and United Technologies Corporation’s acquisition of Rockwell Collins.

Amendment of AML is on the legislative agenda of the Standing Committee of the 13^th National People's Congress (2018-2022). SAMR is conducting the research and review work.

More information about the agency can be found on its website (available in Chinese only).