Cartels 2023 Comparisons

The term “cartel” used in this article refers to monopolistic agreements, including both horizontal monopolistic agreements and vertical monopolistic agreements. Under PRC laws, cartel conduct may be identified pursuant to the Anti-monopoly Law (AML), revised on 24 June 2022 and implemented on 1 August 2022, and the Provisions on Prohibition of Monopolistic Agreements (the “Provisions”), formulated on 10 March 2023 and implemented on 15 April 2023.

In addition, the Pricing Law and the Bidding Law also provide for special types of cartels. 

Following the institutional reform of the State Council in 2018, the State Administration for Market Regulation (SAMR) undertook a unified anti-monopoly enforcement function by establishing the Anti-monopoly Bureau, which was responsible for specific tasks. By the end of December 2018, the SAMR had also granted authorisation for the Provincial Administration for Market Regulation to regulate and manage anti-monopoly enforcement work at the provincial level in their respective administrative regions. 

On 18 November 2021, the National Anti-monopoly Bureau was officially established to organise and implement anti-monopoly enforcement work. In addition, the former Anti-Monopoly Bureau under the SAMR was reformed into three departments, including the establishment of the Anti-monopoly Enforcement Department I, responsible for monopolistic agreements and other related matters. 

Administrative Liability

With respect to administrative liability, paragraph 1, Article 56 of the AML provides that: “With regard to any undertaking that concludes and implements a monopolistic agreement in violation of the present Law, the Anti-monopoly Law Enforcement Agency shall order it to cease the illegal act, confiscate its illegal gains, and impose on it a fine of not less than 1% but not more than 10% of its sales amount in the previous year. In the absence of sales amount in the previous year, a fine of not more than CNY5 million may be imposed. If the monopolistic agreement has not been implemented yet, a fine of not more than CNY3 million may be imposed. Where the legal representative, principal and directly accountable officers of the undertaking are personally accountable for conclusion of the monopolistic agreement, a fine of not more than CNY1 million may be imposed on them.”

In addition, paragraph 2, Article 56 of the AML provides: “Where an undertaking organises any other undertaking to conclude a monopolistic agreement or provides material assistance for any other undertaking to conclude such an agreement, the preceding paragraph shall apply.”

Moreover, Article 63 of the AML provides the multiplied penalty system: “With regard to any violation of the provisions of the present Law, if the circumstances are especially serious, the effects are especially adverse and the consequences are especially serious, the Anti-monopoly Law Enforcement Agency of the State Council may determine the specific amount of the fine at not less than two times but not more than five times of the amount of the fine prescribed in Articles 56, 57, 58 or 62 hereof.” Namely, with regard to a cartel, a maximum fine of 50% of the sales of the previous year may be imposed on the undertaking.

Civil Liability

With regard to civil liability, Article 60 of the AML stipulates that: “Undertakings who engage in monopolistic behaviour shall assume the civil liability in accordance with the law for the losses caused to others due to their monopolistic activities. Where an undertaking implementing any monopolistic act damages the public interests, the People’s Procuratorate at the level of city divided into districts or above may institute civil public interest litigation at the People’s Court in accordance with the law.”

Criminal Liability

With regard to criminal liability, Article 67 of the AML stipulates that: “Whoever violates the provisions of the present Law in a manner serious enough to constitute a criminal offence shall be subject to criminal liability in accordance with the law.” The AML does not set forth criminal and penalty provisions, whether a crime is constituted and what kind of criminal liability shall be borne shall be stipulated by the Criminal Law and its amendments. Regarding collusion among bidders, Article 223 of the Criminal Law provides that this may be a criminal offence punishable by a fixed-term of imprisonment of not more than three years or criminal detention and/or only a fine. 

The AML stipulates civil liabilities, please refer to 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards.

In addition, The latest revision to the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Arising from Monopolistic Conduct (the “Judicial Interpretation on Monopoly Disputes”) was issued by the Supreme People’s Court on 29 December 2020 and came into force on 1 January 2021. 

Article 1 and Article 2 of the Judicial Interpretation on Monopoly Disputes state that natural persons, legal persons or unincorporated organisations suffering losses caused by monopolistic conduct or having disputes arising from non-compliance – through contractual provisions or by-laws of industry associations – with the AML can file a civil lawsuit with a People’s Court directly or after the effectiveness of the decision made by the Anti-monopoly Law Enforcement Agency affirming the existence of monopolistic conduct. The People’s Court shall accept the lawsuit filed if such lawsuit satisfies other conditions for acceptance as provided by law. 

Article 17 of the AML provides that “[t]he following monopolistic agreements are prohibited from being made between undertakings which are in competition:

• those on fixing or changing prices of commodities;
• those on limiting the production or sales volume of commodities;

• those on dividing a sales market or material purchase market;
• those on restricting the purchase of new technologies or new equipment or restricting the development of new technologies or products;
• those on jointly boycotting trading; and
• other monopolistic agreements as determined by the Anti-monopoly Law Enforcement Agency of the State Council.”

Article 18 of the AML provides that “[t]he following monopolistic agreements shall not be made between undertakings and their trading counterparts:

• those on fixing the price of commodities to for resale to a third party;
• those on restricting the minimum price of commodities for resale to a third party; and
• other monopolistic agreements as determined by the Anti-monopoly Law Enforcement Agency of the State Council.”

Articles 8 through 16 of the Provisions provide more detail to Articles 17 and 18 of the AML. 

Article 69 of the AML sets out the application to particular industries, stating that the AML shall not apply to the alliance of or concerted conduct by agricultural producers and rural economic organisations in the production, processing, sales, transportation, storage and other business activities of agricultural products. 

In addition, Article 19 of the AML states that an undertaking shall not organise other undertakings to conclude monopolistic agreements or provide other undertakings with material assistance in concluding monopolistic agreements. 

Administrative Punishment

Article 36 of the Administrative Penalty Law provides that: “Where an unlawful act is not discovered within two years of its commission, an administrative penalty will not be imposed; if it involves citizens’ life and health security or financial security, and causes harmful consequences, the above-mentioned period shall be extended to five years, except as otherwise prescribed by laws.

The period prescribed in the preceding paragraph shall be counted from the date on which the unlawful act is committed, or if the act is ongoing or continuous, from the date on which the act ends.”

The two-year limitation also applies to the administrative penalties for cartel conducts imposed by the Anti-monopoly Law Enforcement Agency. 

In addition, given the ongoing nature of much cartel conduct, the limitation period shall commence from the time when such conduct ceases. 

Civil Liability

Article 188 of the Civil Code sets out three-year limitation period of action regarding applications to a People’s Court for protection of civil-law rights; the limitation period begins from the date when the obligee knows or should have known (i) that their right has been infringed and (ii) the identity of the obligor; however, no protection to a right is to be granted by the People’s Court if 20 years have elapsed since the date of the infringement, except that the People’s Court may, upon request of the obligee, extend the limitation period of action under special circumstances. 

Article 195 of the Civil Code provides that: “A limitation period of action is interrupted under any of the following circumstances, and it shall recommence from the time when the interruption or the relevant proceeding is terminated:

• the obligee requests the obligor to perform;
• the obligor agrees to perform the obligation;
• the obligee files a lawsuit applying for arbitration; or
• there exist any other circumstances that have the same effect as filing a lawsuit or applying for arbitration.”

Criminal Liability

The Criminal Law stipulates that the statute of limitations for the crime of collusive bidding is five years. The limitation period for prosecution is counted from the date when the crime is committed; if the criminal act is of a continual or continuous nature, the period shall commence from the date when the criminal act ceases. 

Article 2 of the AML provides that: “This Law is applicable to monopolistic practices as part of economic activities occurring within the People’s Republic of China. This Law is also applicable to monopolistic practices outside of the People’s Republic of China which have the effect of eliminating or restricting Chinese market competition.”

Therefore, the AML shall apply to cartel conduct taking place in a foreign jurisdiction as long as it eliminates and/or restricts competition in China’s domestic market. 

The AML does not provide for the international comity doctrine. 

In practice, a case that has been or is under investigation in other jurisdictions may be investigated by China’s Anti-monopoly Law Enforcement Agency. Although there is no relevant express provision, this does not mean that China’s Anti-monopoly Law Enforcement Agency does not take international comity into account when conducting investigations. 

Since December 2022, China has gradually mitigated its pandemic policies. At present, normal investigation procedures are also gradually being resumed in cartel cases where on-site investigations were once difficult due to the impact of the pandemic.

The Anti-monopoly Work Conference of the National Market Regulatory System and Arrangement Meeting for the Special Action of Anti-monopoly Enforcement in the Field of People’s Livelihoods (referring to matters relating to people's daily lives) was held in Qingdao, Shandong Province, China in February 2023, which stressed the need to strengthen anti-monopoly regulation and enforcement in the field of people’s livelihoods, and deployed the special action of anti-monopoly enforcement in that field. At present, many provinces and cities in China have actively carried out special anti-monopoly enforcement actions in the area of people’s livelihoods. Therefore, in 2023, China’s anti-monopoly enforcement may focus on areas related to people’s livelihoods such as public utilities and pharmaceuticals.

First, an Anti-monopoly Law Enforcement Agency may search for and discover monopolistic behaviours through:

• its ex officio action;
• receiving informants’ reports; or
• accepting transfers from other authorities or assignment from higher-level authorities.

After a necessary investigation of the suspected monopolistic agreement, the Anti-monopoly Law Enforcement Agency will decide whether or not to file a case. 

Second, after a case is filed, the Anti-monopoly Law Enforcement Agency will carry out an investigation in accordance with the law, and the party being investigated is obliged to co-operate with the investigation. 

Third, the Anti-monopoly Law Enforcement Agency will draw a preliminary conclusion based on the evidence obtained and issue a prior notice of administrative penalties to the party under investigation. The party has the right to present its opinions, defend itself and apply for a public hearing where necessary. 

Finally, after considering the facts of the case and the opinions of the party being investigated, the Anti-monopoly Law Enforcement Agency will make a final decision on the penalty and issue that decision to the investigated party. 

Dawn raids are a recognised method of anti-monopoly investigation in China, commonly used in many cases in practice, such as anti-monopoly investigations against Microsoft in 2013, Mercedes-Benz in 2014, Medtronic in 2016, and Zibo Lianhe Cement Enterprise Management Co Ltd in 2019. 

The AML does not expressly provide for dawn raids; however, China’s Anti-monopoly Law Enforcement Agency may carry out unannounced inspections entering the business premises of suspected companies or other related premises under item 1, paragraph 1 of Article 47 thereof. The provisions of the AML on anti-monopoly investigation apply to dawn raids.

A firm or individual faced with such an inquiry is obliged to co-operate in the dawn raids and must not refuse or hinder the investigation by the Anti-monopoly Law Enforcement Agency. Refusals to co-operate may be considered “refusing or hindering the anti-monopoly investigation”, and the related liability is described in 2.3 Spoilation of Information. 

When investigating suspected monopolistic practices, the Anti-monopoly Law Enforcement Agency may take the following measures:

• investigating the undertaking’s place of business and other relevant locations;
• conducting interrogations of the undertaking’s employees/officers, interested parties, and other relevant entities and individuals, requiring them to provide explanations;
• inspecting and making copies of certificates, agreements, accounts, correspondence, computer data, and other documents belonging to the undertaking, interested parties, and other relevant entities and individuals;
• seizing or freezing relevant evidence; or
• checking the undertaking’s banking account.

During the investigation, the Anti-monopoly Law Enforcement Agency may request the undertakings’ officers or employees to respond to interviews/questions during the dawn raid or surprise visit. When conducting interviews/questions, the law enforcement officers shall make transcripts with signatures of the interviewees or the persons being investigated. Unless otherwise provided for in relevant laws, the companies or interviewees are generally not permitted to obtain copies of such transcripts in practice. In addition, the Anti-monopoly Law Enforcement Agency may access computers and emails and seize relevant documents. 

Please refer to 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony for procedural requirements. 

As for restrictions on dawn raids or surprise visits, there is currently no specific provision of the AML and other relevant laws and regulations stating that law enforcement officers may enter into private homes for investigation; in practice, the Anti-monopoly Law Enforcement Agency generally do not do so. 

In practice, in response to a dawn raid, an attorney will be permitted to assist the party responding to the investigation by the Anti-monopoly Law Enforcement Agency and provide legal advice on-site after presenting a letter of proxy to the law enforcement officers. 

“Spoliation of potentially relevant information” will be deemed as “refusing or hindering the anti-monopoly investigation.”

Article 62 of the AML provides that: “With regard to the review and investigation conducted by the Anti-monopoly Law Enforcement Agency in accordance with the law, if any undertaking refuses to provide relevant materials or information; provides false materials or information; hides, destroys or transfers evidence; or otherwise refuses or obstructs the investigation, the Anti-monopoly Law Enforcement Agency shall order it to make corrections, and impose upon it a fine of not more than 1% of its sales amount in the previous year; if there is no sales amount in the previous year or it is difficult to calculate the sales amount, a fine of not more than CNY5 million shall be imposed; and in the case of an individual, a fine of not more than CNY500,000 shall be imposed on them.”

Furthermore, the multiplied penalty system under Article 63 of the AML also applies to refusing or hindering the anti-monopoly investigations.

The AML and other relevant laws and regulations do not state whether undertakings’ officers or employees have a right to engage counsels; however, in current practice, counsel will be permitted by law enforcement officers to assist undertakings’ officers/employees in responding to the investigations and to provide legal advice on-site; however, when the Anti-monopoly Law Enforcement Agency conducts interrogations of the undertaking’s employees/officers, counsel are not permitted to accompany them on-site. 

However, it shall be noted that the AML, amended in 2022, has introduced individual liability for cartel conduct – ie, the legal representatives, persons chiefly in charge and directly responsible persons of the undertakings personally liable for the cartel conducts may be fined up to CNY1 million. Therefore, individuals may need to engage attorneys to respond to an investigations into cartel conduct. However, it is unclear whether counsel will be allowed to accompany individuals in response to investigations and will need to be confirmed in future law enforcement activities.

Generally, the following principal initial steps will be taken during the initial phase of an enforcement effort:

• After accepting the engagement, an attorney may ask the party about the investigation, including the current stage of the investigation, the object(s) of the investigation, the monopolistic behaviours being focused on by the Anti-monopoly Law Enforcement Agency, and the facts of the alleged monopolistic conduct. 
• The attorney may, based on the above information, assist the party in responding to the investigation conducted by the Anti-monopoly Law Enforcement Agency, including providing the party with legal advice on-site, assisting the party in responding to inquiries, and collecting defence and evidence.

Further, if the conditions for the exemption, suspension of investigation and/or application of leniency programme are satisfied, the attorney may assist the party in applying for an exemption, suspension of investigation and/or application of leniency programme. 

China’s Anti-monopoly Law Enforcement Agency obtains documentary evidence or testimony, and other types of (eg, non-documentary) information in the course of investigating alleged cartel conduct through the following procedures:

• informants’ reporting;
• evidence obtained during the anti-monopoly investigation;  and
• evidence provided by cartel members in the application of the leniency programme. 

Regarding the application of procedural requirements, the Anti-monopoly Law Enforcement Agency shall strictly follow the investigation rules stipulated by the law during the investigation:

• to take the investigation measures specified in paragraph 1, Article 47 of the AML;
• to submit a written report to the person in charge of an Anti-monopoly Law Enforcement Agency for approval – there shall be no less than two law enforcement officers, who shall show their law enforcement certificates before the investigation; and
• transcripts shall be made during the inquiry and investigation and be signed by the person being questioned or investigated.

The Anti-monopoly Law Enforcement Agency shall also perform the obligations related to the investigation, such as legally fulfilling confidentiality obligations in relation to trade secrets, personal privacy, and personal information known in the course of law enforcement.

Undertakings, interested parties and other related entities or individuals must co-operate with the Anti-monopoly Law Enforcement Agency in their duties and may not refuse or hinder the investigation. In this regard, companies or individuals must produce documents and other evidence available to them, even if such documents and evidence are in another jurisdiction, including information stored in another jurisdiction. 

Requirements for obtaining evidence from another jurisdiction are set out in 3.3 Obtaining Information From Entities Located Outside This Jurisdiction. 

There is no attorney-client privilege in China. Undertakings may not refuse to disclose documents or other materials by relying on this privilege.

In practice, individuals and firms usually do not resist requests for information; otherwise, the Anti-monopoly Law Enforcement Agency may obtain the information through dawn raids. However, if the individual and firms have doubts about the requests for information (eg, deeming the requested information irrelevant), communication between individual/firms and the Anti-monopoly Law Enforcement Agency is permitted. 

Non-co-operation with the Anti-monopoly Law Enforcement Agency’s requests or insistence on strict fulfilment of legal conditions precedent may be deemed as refusing or hindering the anti-monopoly investigation. The legal penalties will be imposed as set out in 2.3 Spoilation of Information. 

Article 49 of the AML stipulates that: “The Anti-monopoly Law Enforcement Agency and its officers are obliged to keep confidential the trade secrets, personal privacy and personal information that have come to their knowledge in the course of law enforcement.” Pursuant to Article 66 of the AML, if any functionary of an Anti-monopoly Law Enforcement Agency discloses any trade secret, personal privacy or personal information that becomes known to them in the course of law enforcement, that functionary shall be punished in accordance with the law. In addition, according to Article 67 of the AML: “Whoever violates the provisions of the present Law in a manner serious enough to constitute a criminal offence shall be subject to criminal liability in accordance with the law.”

During the whole process of a cartel investigation, before an Anti-monopoly Law Enforcement Agency makes a decision on administrative penalties, an attorney may assist the party in raising legal and factual arguments and a reasonable defence. 

After the Anti-monopoly Law Enforcement Agency decides on administrative penalties, the attorney may assist the party in applying for administrative reconsideration and/or administrative proceedings if the party is dissatisfied with such administrative penalties. 

Leniency Programme

The leniency programme is provided for in paragraph 3, Article 56 of the AML; Articles 37, 38 and 47 of the Provisions; and the Guidelines for the Application of the Leniency Programme to Horizontal Monopolistic Agreement Cases. 

Where any undertaking concludes or organises other undertakings to conclude a monopolistic agreement or provides material assistance for other undertakings to conclude a monopolistic agreement and voluntarily reports the relevant information and provides material evidence to the Anti-monopoly Law Enforcement Agency, it may apply for a reduction of or exemption from punishment pursuant to the law.

Leniency applications and markers

Undertakings should submit an application for leniency to the Anti-monopoly Law Enforcement Agency before being notified of administrative penalties by the Anti-monopoly Law Enforcement Agency.

An undertaking may apply for a “marker” as follows:

• The first undertaking that submits a report on relevant information about the monopolistic agreement and material evidence, may apply for exemption from punishment, and the Anti-monopoly Law Enforcement Agency will issue a written acknowledgement of receipt to the undertaking stating the time of receipt and the list of received documents. 
• The undertaking that submits a report on relevant information about a monopolistic agreement and material evidence after the first undertaking may apply for mitigation of the punishment, and the Anti-monopoly Law Enforcement Agency will issue a written acknowledgement of receipt to the undertaking stating the time of receipt and the list of received documents. 
• If the registration of an undertaking that applies for exemption from punishment is cancelled, the first undertaking that applies for mitigation of punishment shall be automatically “promoted” to the applicant for exemption from punishment. 

Ultimate effect of a leniency application

An undertaking that plays a leading role in reaching a monopolistic agreement or organises or coerces other undertakings to participate in concluding and/or implementing monopolistic agreements or prevents other undertakings from ceasing the illegal acts shall not be exempted from punishment by the Anti-monopoly Law Enforcement Agency, but may have a mitigated punishment imposed. In this regard, if the party is a “ringleader” of the activity, it shall not be exempt from punishment but may be given a mitigated punishment. 

In general, the Anti-monopoly Law Enforcement Agency may only grant leniency to up to three undertakings for the same monopolistic agreement case. For a significant and complex case involving numerous undertakings that apply for leniency and provide different material evidence, the Anti-monopoly Law Enforcement Agency may consider granting leniency to more undertakings. 

The first applicant in sequence may be exempted from punishment or receive at least an 80% reduction of the applicable fine; the second applicant in sequence may receive a reduction of between 30% and 50% of the fine; the third applicant in sequence may receive a reduction of between 20% and 30% of the fine; and a reduction not more than 20% may be applicable for any subsequent applicants. In addition, the Anti-monopoly Law Enforcement Agency may also consider treating the illegal income of an undertaking with reference to the aforementioned reduction proportion. 

In addition, the legal representative, principal and directly accountable personnel of the undertaking who are personally liable for the conclusion of the monopolistic agreement can also apply for leniency, and the Anti-monopoly Law Enforcement Agency can reduce the punishment by 50% or exempt such personnel from punishment.

Exemption System

Paragraph 1, Article 20 of the AML specifies the exemption system: Article 17, paragraph 1, Article 18, and Article 19 hereof are not applicable if undertakings can prove that the agreements are concluded for:

• advancing technology, or researching and developing new products;
• improving product quality, lowering cost, increasing efficiency, unifying specifications and standards, or implementing a division of labour based on specialisation;
• improving the operational efficiency and competitiveness of small and medium-sized undertakings;
• realising public interests such as energy conservation, environmental protection, and rescue and relief efforts;
• alleviating problems related to a serious drop in sales quantity or obvious overproduction during an economic recession;
• protecting legitimate interests in foreign trade or foreign economic co-operation; or
• involving other circumstances specified by-laws or the State Council.

Where Article 17, paragraph 1, Article 18, and Article 19 do not apply under any of the circumstances listed in the first five bullet points above, the undertakings shall also prove that the agreements do not severely restrict the competition in the relevant market and enable consumers to benefit from the interests arising therefrom.

In China, the AML and relevant laws and regulations do not provide for an amnesty regime. 

According to item 2, paragraph 1, Article 47 of the AML, when investigating alleged monopolistic activities, the Anti-monopoly Law Enforcement Agency may conduct investigations into the undertaking, interested parties, and other relevant entities and individuals, requiring them to provide explanations. Therefore, the Anti-monopoly Law Enforcement Agency may seek information directly from a company employee.

As for the process and rules, please see 2.2 Dawn Raids.

According to item 3, paragraph 1, Article 47 of the AML, when investigating alleged monopolistic activities, the Anti-monopoly Law Enforcement Agency may consult and make copies of certificates, agreements, accounts, correspondence, computer data, and other documents that belong to the undertaking, interested parties, and other relevant entities and individuals. Therefore, the Anti-monopoly Law Enforcement Agency may seek documentary information directly from the target company or others.

As for the process and rules, please see 2.2 Dawn Raids.

An Anti-monopoly Law Enforcement Agency may obtain evidence from entities outside the territory of China. 

Article 27 of the Provisions on Procedures for Administrative Punishments for Market Regulation states that “documentary evidence formed outside the territory of the People’s Republic of China shall be notarised by a notary agency of the country where the documentary evidence is formed, or the procedures for certification shall be completed in accordance with the relevant treaty entered into by and between the People’s Republic of China and the country. Relationship evidence shall be notarised by a notary agency of the country where the evidence is formed and be authenticated by the embassy or consulate of the People’s Republic of China in that country, or the procedures for certification shall be completed in accordance with the relevant treaty entered into by and between the People’s Republic of China and the country.”

For evidence formed in what Article 27 of the in Provisions on Procedures for Administrative Punishments for Market Regulation refers to as “the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan of the People’s Republic of China”, the relevant certification formalities shall be completed. 

For evidence or audio-visual materials in a foreign language, the AML states that “a Chinese translation translated by a qualified translation company or individuals shall be attached and shall be sealed by the translation company or signed by translators.”

For decision-making around competition policies, the Anti-monopoly Commission of the State Council consists of individuals from 14 agencies under the State Council, who formulate policies and guidelines and co-ordinate and direct the administrative anti-monopoly enforcement work through the Anti-monopoly Commission. 

In practice, other government agencies shall pass on clues they have discovered or materials related to suspected monopolistic activities to the Anti-monopoly Law Enforcement Agency, and it may cite the evidence and materials collected by other government agencies. For example, the administrative penalty decision for the monopolistic agreement case involving Fengcheng Ready-Mixed Concrete Association and its member enterprises in 2021 indicates that the investigation was conducted “based on the clues provided by the public security organs” in the section on “case sources and investigation process”. In this case, the competent authority, the Jiangxi Provincial Administration for Market Regulation, also cited the evidence and materials collected by the public security organs, such as transcripts, as evidence of reaching and performing the monopolistic agreements. 

In addition, in the process of its investigation, the Anti-monopoly Law Enforcement Agency may seek the opinions of relevant industry authorities, such as the Ministry of Industry and Information Technology, the Ministry of Transport, the People’s Bank of China, the State Intellectual Property Office, and the China Banking and Insurance Regulatory Commission. 

Since the implementation of the AML in 2008, China has signed more than 50 co-operation agreements or memorandums of understanding with competition regulators in more than 30 countries and regions, including the USA, the EU, Singapore, and Russia. For example, on 29 December 2021, China and Singapore signed the Memorandum of Understanding on Co-operation in the Field of Competition Law; on 4 February 2022, China and Russia signed the Agreement between the Government of the People’s Republic of China and the Government of the Russian Federation on Co-operation in the Field of Countering Unfair Competition and Anti-monopoly. 

No provision of the AML sets out separate criminal liability for cartel conduct, but punishment will be given in accordance with the Criminal Law for monopolistic agreements reached by collusive bidding. Specifically, Article 223 of the Criminal Law states that bidders who act in collusion with each other in offering bidding prices and who therefore jeopardise the interests of bid inviters or other bidders, if the circumstances are serious, shall be sentenced to not more than three years of fixed-term imprisonment or criminal detention, together with fines, or shall be fined only. 

Jurisdiction over criminal cases of monopolistic agreements reached by collusive bidding is as follows:

• for hierarchical jurisdiction, the primary People’s Courts will have jurisdiction as the courts of first instance over ordinary criminal cases, in accordance with Article 20 of the Criminal Procedure Law; and
• for territorial jurisdiction, in general, the People’s Court in the place where the crime was committed , in accordance with Article 25 of the Criminal Procedure Law.

However, where it is more appropriate for the case to be tried by the People’s Court where the defendant resides, then that court may have jurisdiction over the case. 

The People’s Procuratorate shall bear the burden of proof and shall submit relevant evidence to the court. Where a defendant believes that the public security organ or the People’s Procuratorate has not submitted evidence collected during the investigation and examination before the prosecution, which proves that the criminal suspect or defendant is not guilty or has committed only a minor offence, the defendant is entitled to apply to the People’s Procuratorate or the People’s Court for submission of that evidence. The attorney may collect information pertaining to the case from witnesses or other relevant entities and individuals with their consent and also apply to the People’s Procuratorate or the People’s Court to collect and obtain evidence or apply to the People’s Court to mandate a witnesses to appear in court and give testimony. 

Article 60 of the AML stipulates the civil liability of cartels. Therefore, a person who suffers losses due to cartel conduct may request the cartel implementers to bear the corresponding civil liability. In addition, if the cartel behaviour harms the public interest, a People’s Procuratorate at the level of city divided into districts or above may institute civil public interest litigation at the People’s Court in accordance with the law.

The courts with jurisdiction for civil monopoly disputes shall be as follows:

• For hierarchical jurisdiction: intellectual property courts; intermediate people’s courts of cities where the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government are located and cities specifically designated in the state plan; and intermediate people’s courts designated by the Supreme People’s Court, as the court of first instance, in accordance with Article 3 of the Judicial Interpretation on Monopoly Disputes.
• For territorial jurisdiction: determined based on the specific circumstances of the case and pursuant to the provisions of the Civil Procedure Law and relevant judicial interpretations on the jurisdiction of tort disputes, contract disputes, in accordance with Article 4 of the Judicial Interpretation on Monopoly Disputes – ie, for a tort dispute, the plaintiff shall bring a lawsuit to the court at the place where the tort occurs or where the defendant is domiciled while for a contractual dispute, the plaintiff shall bring a lawsuit to the court where the defendant is domiciled or where the contract is performed. 

When bringing a lawsuit to the court, the plaintiff shall submit evidence to the court. Where the evidence cannot be collected (eg, because the evidence is held by the Anti-monopoly Law Enforcement Agency or a third party), the plaintiff or the defendant may apply to the court in writing to investigate and obtain evidence within a certain time limit. 

Given that a monopolistic agreement usually involves multiple undertakings, actions of the Anti-monopoly Law Enforcement Agency must be directed at all undertakings involved in the agreement. 

It is the Anti-monopoly Law Enforcement Agency’s responsibility to prove the existence of a monopolistic agreement in anti-monopoly investigations. For monopolistic agreements described in item (6), paragraph 1, Article 17 and item (3), paragraph 1, Article 18 of the AML, the Anti-monopoly Law Enforcement Agency must also demonstrate that the monopolistic agreement eliminates or restricts competition. 

In current civil practice, the plaintiff bears the burden of proof, which includes proving the existence of the monopolistic agreement, and that the agreement has the effects of eliminating or restricting competition, but the plaintiff does not need to prove the effects of eliminating or restricting competition of the monopolistic agreement referred in item (1)‒(5), paragraph 1, Article 17 of the AML, where the defendant bears the burden of proof that the agreement does not have the effects of eliminating or restricting competition. However, it should be noted that according to Article 25 of the Provisions on Several Issues Concerning the Application of Law in Hearing Civil Dispute Cases on Monopoly (Draft for Public Consultation) issued by the Supreme People’s Court on 18 November 2022, for vertical monopolistic agreements that “fix the price of reselling goods to a third party” and “limit the minimum price for reselling goods to a third party”, the defendant shall bear the burden of proof that the agreement does not have the effect of eliminating or restricting competition.

In criminal proceedings involving a monopolistic agreement reached by collusive bidding, the procuratorate bears the burden of proof of the existence of the crime.

The judge is the discoverer of facts and applies the law accordingly, both in civil proceedings before Chinese courts in relation to monopoly disputes involving a cartel and criminal proceedings for monopolistic agreements reached by collusive bidding.

The AML and its regulations do not expressly provide for the reciprocal applicability of evidence between anti-monopoly enforcement investigations and monopoly litigation. However, paragraph 2, Article 27 of the Administrative Penalty Law states that “the authority imposing an administrative penalty shall strengthen co-ordination and co-operation with the judicial authority, establish and improve a case transfer system, facilitate transfer and receipt of evidence materials, and improve the case information exchange mechanism”. Meanwhile, paragraph 2, Article 67 of the Civil Procedure Law states that “where the party and its agent are unable to collect evidence for objective reasons, or where the court believes it is necessary, the court shall investigate and collect evidence”. According to Article 94 of the Supreme People’s Court Interpretation on the Application of the Civil Procedure Law, such evidence must be kept by the relevant governmental authorities, and parties and their agents have no right to access or review it.

Based on these provisions and relevant practices, the court may order the Anti-monopoly Law Enforcement Agency to provide evidence obtained during the anti-monopoly investigation, and the Anti-monopoly Law Enforcement Agency may also request the court to provide relevant evidence gathered during monopoly litigation.

Please see 3.9 Burden of Proof.

Experts may conduct market surveys or provide economic analysis reports regarding the technical issues of the case, according to Article 13 of the Judicial Interpretation on Monopoly Disputes. A court shall review the expert’s surveys or reports by referring to the provisions of the Civil Procedure Law and relevant judicial interpretations regarding expert opinions. The scope of experts mentioned above is not limited to economists.

Please see 3.12 Rules of Evidence and 2.7 Attorney-Client Privilege.

With the same monopolistic agreement or related facts, an anti-monopoly administrative investigation may be initiated as a result of the informant’s reporting or the Anti-monopoly Law Enforcement Agency’s ex officio action. Meanwhile, the injured party may file a monopoly civil action in court as a plaintiff. Criminal proceedings may also be initiated if a crime is involved.

Penalties may be imposed directly by the Anti-monopoly Law Enforcement Agency. However, under the Measures for Hearings on Administrative Penalties of Market Regulation, which were revised on 2 July 2021 and went into effect on 15 July 2021, where an Anti-monopoly Law Enforcement Agency imposes a fine of more than CNY10,000 on a natural person or a fine of more than CNY100,000 on a legal person or other organisation, the parties have the right to request a hearing.

According to Article 53 of the AML and Articles 31–35 of the Provisions, with regard to the suspected monopolistic practices under investigation, if the undertaking agrees to undertake certain specific measures that will lead to the elimination of said practices within a time limit designated by the Anti-monopoly Law Enforcement Agency, the Anti-monopoly Law Enforcement Agency may decide to suspend the investigation. If the undertaking performs its commitment, the Anti-monopoly Law Enforcement Agency may decide to terminate the investigation.

The Anti-monopoly Law Enforcement Agency shall not accept commitments made by undertakings and suspend the investigation in the case of horizontal monopolistic agreements between competing undertakings that function to fix or change commodity prices, restrict production or sales quantity of a commodity, or segment the sales market or raw material procurement market.

The applicable standards and procedures for undertakings’ commitment applications shall be governed by the Provisions and the Guidelines for Undertakings’ Commitments in Monopoly Cases.

The Anti-monopoly Law Enforcement Agency shall resume a suspended investigation if:

• the undertaking has failed to perform its commitment;
• a major change has occurred on which the suspension of the investigation was based; or
• the suspension of the investigation was based on incomplete or inaccurate information provided by the undertaking.

If an Anti-monopoly Law Enforcement Agency ultimately determines that an undertaking concluded and implemented a monopolistic agreement and imposes penalties, the undertaking may lose the qualification to submit a tender to government projects or those of some large enterprises, as well as facing difficulties in the listing process.

In addition, according to Article 64 of the AML, if undertakings are subject to administrative penalties for violating the provisions of this Law, this will be recorded in their credit records in accordance with relevant national regulations and announced to the public. This may affect the reputation of the punished undertakings.

The undertaking may attempt to mitigate the impact of the decision by committing as required for the Anti-monopoly Law Enforcement Agency to terminate their investigations.

Consumers or other undertakings may seek civil compensation from the punished undertakings implementing monopolistic agreements based on the punishment imposed by the Anti-monopoly Law Enforcement Agency.

Please see 3.6 Procedure for Issuing Complaints/Indictments in Criminal Cases.

In non-criminal proceedings, the Anti-monopoly Law Enforcement Agency has the authority to impose penalties on undertakings, while courts have no authority to punish undertakings who enter into monopolistic agreements in civil cases. However, undertakings must assume civil liability for losses caused to others due to their monopolistic behaviours.

An “effective compliance programme” maintained by a company cannot be used as a statutory basis for mitigating administrative penalties under the AML. However, the Anti-monopoly Law Enforcement Agency has some discretion in determining the amount of punishment; the existence of an “effective compliance programme” is, therefore, considered in practice when deciding whether or not to lessen the penalties.

Furthermore, as discussed in 4.2 Procedure for Plea Bargaining or Settlement, if an undertaking under investigation promises to take specific measures to eliminate the consequences within the time limit agreed upon by the Anti-monopoly Law Enforcement Agency, the investigation may be suspended. If the Anti-monopoly Law Enforcement Agency determines that the undertaking has kept its promise, the investigation may be closed.

In September 2020, the Anti-monopoly Commission of the State Council issued the Anti-monopoly Compliance Guidelines for Undertakings, encouraging undertakings to establish an anti-monopoly compliance management system. Several provinces and cities, including Shanghai, Jiangsu and Zhejiang, also issued compliance guidelines around the same time.

At present, sanctions in government proceedings do not lead to mandatory consumer redress; however, consumers can bring their own civil actions for compensation.

If an undertaking disagrees with the Anti-monopoly Law Enforcement Agency’s administrative decision on the penalty, it can request administrative reconsideration or initiate an administrative lawsuit.

According to the Administrative Review Law, the parties can apply to the SAMR or provincial people’s governments, as the case may be, for administrative reconsideration within 60 days from the date of receiving the Decision on Administrative Punishment. If they are not satisfied with the Decision of Administrative Reconsideration, they may bring an administrative lawsuit with the People’s Court within 15 days from the date of receiving the Decision, or they may – without going through administrative reconsideration – directly launch an administrative lawsuit against the Anti-monopoly Law Enforcement Agency’s penalty decision. According to the Administrative Procedure Law, an undertaking may bring administrative litigation within six months of the penalty decision made by the Anti-monopoly Law Enforcement Agency.

According to the 2022 annual report of the IP Court issued by the Supreme People’s Court on 30 March 2023, there was a significant increase in monopoly administrative cases compared to 2021, from two cases in the previous year to 24 cases.

Article 60 of the AML provides that: “Where an undertaking implementing any monopolistic act causes any loss to others, it shall assume the civil liability in accordance with the law. Where an undertaking implementing any monopolistic act damages the public interests, the People’s Procuratorate at the level of city divided into districts or above may institute civil public interest litigation at the People’s Court in accordance with the law.”

According to Articles 1 and 2 of the Judicial Interpretation on Monopoly Disputes, if natural individuals, legal persons, or unincorporated organisations suffer damages as a result of monopolistic conduct or have disputes over the terms of contracts or the articles of association of industry associations that violate the AML, they may file civil lawsuits directly with the People’s Court, or file such lawsuit after the Anti-monopoly Law Enforcement Agency’s decisions confirming the existence of monopolistic behaviours have become effective. The People’s Court will accept the case if it meets the legal requirements for case acceptance.

The processes regulating anti-monopoly civil actions are detailed in 3.7 Procedure for Issuing Complaints/Indictments in Civil Cases.

Article 56 of the Civil Procedure Law provides that “[a] joint action in which one party consists of multiple persons may be brought by a representative elected by such persons.” And Article 57 of the Civil Procedure Law provides that “[i]f the object of the action is of the same category and a party consists of multiple persons but the number of persons is not confirmed at the time of filing of the action, the People’s Court may issue a public announcement stating the particulars of the case and the claims and notify the rights holders to register with the People’s Court within a certain period of time. Rights holders who have registered with the People’s Court may elect a representative to engage in litigation; if such representative cannot be elected, the People’s Court may discuss with the registered rights holders on such representative.”

The above provisions set out China’s representative litigation system. This system is analogous to class-action litigation in the USA but differs in terms of how the litigation representatives are elected and empowered, as well as whether court decisions are binding on all parties.

Article 58 of the Civil Procedure Law provides that “legally designated institutions and relevant organisations may initiate proceedings at the People’s Court against acts jeopardising public interest such as causing pollution to the environment or damaging the legitimate rights or interests of multiple consumers.” The China Consumers Association and its branches in various provinces, autonomous regions, and municipalities may file legal proceedings in the People’s Court against activities that harm the legitimate rights and interests of the public, according to the Law on the Protection of Consumer Rights and Interests. Furthermore, paragraph 2, Article 60 of the AML specifies that if an undertaking engages in monopolistic behaviours that infringe upon the public interest of society, the People’s Procuratorate at the level of city divided into districts or above may file a civil public interest lawsuit in the People’s Court.

Any natural person, legal person, or unincorporated organisation may file an anti-monopoly civil action if they suffer losses as a result of monopolistic practices or are involved in a dispute over the contractual terms or the articles of association of an industry association that violate the AML, according to Article 1 of the Judicial Interpretation on Monopoly Disputes.

In theory, indirect purchasers can file an action if they can show that they have suffered damages due to monopolistic behaviours. However, there has been no precedent on whether courts will accept “passing on” defences.

Paragraph 2, Article 27 of the Administrative Penalty Law states that “The authority imposing an administrative penalty shall strengthen co-ordination and co-operation with the judicial authority, establish and improve a case transfer system, facilitate transfer and receipt of evidence materials, and improve the case information exchange mechanism.”

Therefore, evidence from governmental investigations or proceedings may be admissible.

There is no published data to indicate how often civil claims involving cartels proceed to completion of litigation as opposed to dismissal or settlement.

According to the Civil Procedure Law, in the first instance of an anti-monopoly civil dispute case, the case shall be concluded within six months of the case filing date if the ordinary procedure is applicable; where the summary procedure is applicable, the case shall be completed within three months of the case filing date; if the procedure for small claims is applicable, the case shall be concluded within two months of the case filing date; in the case of an appeal, the case shall be concluded within three months of the date of being filed as a second instance case. The above time limits may be extended upon approval.

The plaintiff may demand that the defendant pay any reasonable attorneys’ fees incurred in investigating and halting the monopolistic behaviour. For example, in the case of Yangtze River Pharmaceutical Group v Hefei Medical and Pharmaceutical Co Ltd, the court determined that the defendant shall compensate the plaintiff for the attorneys’ fees paid by the plaintiff in the amount of CNY500,000.

The unsuccessful claimants may be ordered to compensate the respondent for the defence costs but shall not be obliged to pay its attorneys’ fees.

From 1 January 2019, any party that disagrees with the civil judgement of the first instance decision on a monopoly case may appeal to the Intellectual Property Tribunal of the Supreme People’s Court; any party that disagrees with an effective monopoly civil case may apply for a retrial with the Supreme People’s Court.

There is no other pertinent information.

The following guidelines are available:

• the Guidelines for Price-related Acts of Industry Associations (issued by the National Development and Reform Commission on 20 July 2017);
• the Guidelines for the Pricing Behaviour of Undertakings Dealing in Drugs and Active Pharmaceutical Ingredients in Short Supply (issued by the National Development and Reform Commission on 16 November 2017);
• the Guidelines for Undertakings’ Commitment in Monopoly Cases (issued by the Anti-monopoly Commission of the State Council on 4 January 2019);
• the Guidelines for the Application of the Leniency Programme to Horizontal Monopolistic Agreement Cases (issued by the Anti-monopoly Commission of the State Council on 4 January 2019);
• the Anti-monopoly Guidelines for the Intellectual Property Industry (issued by the Anti-monopoly Commission of the State Council on 4 January 2019);
• the Anti-monopoly Guidelines for the Automobile Industry (issued by the Anti-monopoly Commission of the State Council on 4 January 2019);
• the Anti-monopoly Compliance Guidelines for Undertakings (issued by the Anti-monopoly Commission of the State Council on 11 September 2020);
• the Anti-monopoly Guidelines for the Platform Economy Sector (issued by the Anti-monopoly Commission of the State Council on 7 February 2021);
• the Anti-monopoly Guidelines for the Active Pharmaceutical Ingredients Sector (issued by the Anti-monopoly Commission of the State Council On 15 November 2021); and
• the Anti-monopoly Compliance Guidelines for Overseas Enterprises (issued by the SAMR On 15 November 2021).