China: The Anti-Monopoly Law of China: What We Have Seen in 2012?

Last Updated: 11 February 2013
Article by Susan Ning, Yunlong Zhang and Hazel Yin

The year 2012 marks the fifth year of the enactment and implementation of China's Anti-Monopoly Law ("AML"). Over the past year, we have witnessed substantial progress of the merger control regime and antitrust administrative investigations, in particular in the area of cartel investigations. With the promulgation of judicial interpretation of the Supreme People's Court, antitrust civil litigations are also picking up. As the Year of Dragon is coming to an end, we present this article with an overview of how the AML has been implemented in the past year, together with our observations.

I. Merger Control

The Ministry of Commerce ("MOFCOM"), the authority in charge of merger control review, maintained a similar caseload in 2012 compared to 2011 and has been gradually establishing its international reputation as one of the most important antitrust authorities.

1. Statistics

According to Mr. SHANG Ming, the Director General of the Anti-monopoly Bureau of MOFCOM, in 2012, MOFCOM received 201 notifications of concentrations, among which 186 cases were officially accepted and 154 cases were closed1. In 2011, a total of 205 filings were received, with 185 officially accepted and 171 closed. Among all cases closed in 2012, 142 cases (more than 92%) were approved unconditionally, 6 cases approved with conditions 2, and 6 cases withdrawn by the applicants. The number of conditionally approved cases thus adds up to 16 in total as of now.

At the press conference, Mr. Shang also released the number of cases classified by the form of concentration, nature and industry involved as set out in the table below:

2011 2012 (till Nov.)
Number Percentage Number Percentage
Form of Concentration Share Transfer 101 62% 71 55%
Joint Venture 49 30% 46 36%
Nature Horizontal 97 60% 80 65%
Vertical 13 8% - -
Mix 42 26% - -
Relevant Industries Manufacturing* 107 - 74 -
IT 13 - - -
Retail 12 - - -

Note: Manufacturing industry here includes a wide array of industries, such as petroleum, chemical, machinery manufacturing, automobile, shipping, aviation and mining.

2. Legislation

In February 2012, MOFCOM enacted a new rule setting out the procedures for investigating and penalizing companies who fail to honor their notification obligations. Since then, MOFCOM has received three tip-offs and confirmed two of them. Since the two transactions were not implemented, MOFCOM urged the parties to duly submit the filings. MOFCOM also detected a transaction that failed to be filed during the pre-filing consultation process and has been investigating it3.

In July 2012, MOFCOM adopted a revised notification form to replace the old form introduced in January 2009. The new form contains useful clarifications, such as how to determine an "undertaking concerned in a concentration", and what information a non-confidential version shall include. It also attracted public concerns that the burdens of applicants in producing information, in particular internal documents, may be aggravated.

Two new regulations are in the pipeline, one regarding merger remedies and the other regarding establishment of a fast track review mechanism. The new regulation on merger remedies is expected to replace the current regulation on divestiture and to provide a systematic framework on the proposal of remedies, the evaluation, implementation, supervision, and amendment of remedies and the related legal liabilities that apply to both structural and behavioral remedies. According to Mr. Shang, the draft regulation would soon be submitted to the Department of Treaty and Law of MOFCOM for review and is expected to be promulgated in 20134.

The measure on the introduction of a fast track procedure is also long awaited. Currently, due to the short of staff, most cases will not be closed until Phase II. The fast track would likely implicate reduced information requirement and simplified opinion-solicitation process. It is expected that market share and HHI index will be applied as the major filters for determining if a case may be cleared through such simplified procedures5. Compared to the regulation on merger remedies, it is less clear when this measure will be promulgated.

3. Efforts to improve transparency

In November, 2012, MOFCOM took one concrete move forward to increase its transparency by committing to publishing unconditionally approved notifications on a quarterly basis6. Till now, MOFCOM has made two releases with all unconditionally approved cases till the end of 2012, totaling 517 cases.

Our observations

Although MOFCOM received and officially accepted similar number of cases in 2012 compared to 2011, the number of cleared cases shrank. In general, the review period is still quite lengthy. But we did witness an increasing number of cases cleared by end of Phase 1 or within the first 10 days of Phase 2, potentially suggesting that the fast track mechanism has been on trial. Official implementation of the fast track mechanism is all the more important as it will provide more foreseeability to companies seeking antitrust approval from MOFCOM. Besides, with the new form being used for half a year, our experience shows that in practice, MOFCOM's approach is still flexible and the parties'burden is not significantly increased.

With the increase of the number of conditional clearance cases, which very often involve conduct remedies, the past year has also witnessed MOFCOM spending a lot of efforts on supervision of the enforcement of conduct remedies. MOFCOM has also started to investigate transactions that fail to be notified with the procedural rule officially enacted. We expect that MOFCOM may publicize its investigations or decisions in 2013.

II. Administrative Enforcement

The two authorities in charge of enforcing the conduct code, i.e., the National Development and Reform Commission ("NDRC") and the State Administration for Industry and Commerce ("SAIC") are also very active in the past year7.


The NDRC has been reinforcing its enforcement power since 2010. According to Ms. LI Qing, Deputy Director General of the Price Supervision and Anti-Monopoly Bureau of NDRC, the total number of officials in the Price Supervision and Anti-monopoly Bureau will be increased to 46 and local price authorities are also intensifying antitrust enforcement efforts with 150 additional officials allocated to 8 provincial level Price Bureaus, including those in Beijing, Liaoning, Shanghai, Jiangsu, Hubei, Guangdong, Chongqing and Shanxi8. Most recently on February 1, 2013, Jiangsu province launched the Anti-price Monopoly Bureau under the Provincial Price Bureau, with the authorization from the NDRC to investigate and handle regional price-related antitrust cases within the province and across the neighboring Anhui and Shandong provinces9.

Till the end of 2012, a total of 49 price-related cases have been investigated by the NDRC since the AML went into effect, and 20 of them were closed with administrative penalties rendered. The investigations have covered a broad range of industries, including pharmacy, paper-making, LCD panel, cement, insurance, shipping agency, etc10.

  • NDRC penalized sea sand dredging companies for price-fixing cartel

In October, 2012, the Price Bureau of Guangdong Province ("GDPB") announced its investigation in a price-fixing cartel among 20 sea sand dredging companies, which formed an association to coordinate the amount of "resource exploitation fee". The GDPB imposed a total of RMB 759,247 (approximately USD 120,515) of fines on three companies and granted a reduction of 50% of the fines imposed on one of the penalized organizers that voluntarily provided key evidence under the leniency program11.

  • NDRC penalized LCD manufacturers for price-fixing cartel

More recently on January 4, 2013, the NDRC published China's first antitrust enforcement action against international cartels, where a total amount of RMB 353 million (approximately USD 56 million, consisting of restitution of the past overcharge of RMB 172 million to domestic TV enterprises, confiscation of unlawful gains of RMB 36.75 million and fines of RMB 144 million) was imposed on 6 international LCD panel manufacturers, including Samsung, LG, Chi Mei, AU Optronics, Chunghwa Picture Tubes and Hann Star. The six companies were penalized for fixing the price of LCD panels from 2001 to 2006. In addition to the monetary sanctions, the 6 LCD manufacturers also promised to take corrective measures, including providing Chinese TV makers with high-end products on a non-discriminatory basis, and extending the warranty period of the panels to 36 months12.

It is noteworthy that the LCD case was penalized under the Price Law instead of the AML, because the activities in question occurred before the AML became effective.


According to Ms. REN Airong, the Director General of the Antimonopoly and Anti-unfair Competition Enforcement Bureau of SAIC, since the enactment of AML, the SAIC has authorized 10 provincial AICs to investigate 17 cases, including 16 cartel cases (3 of them involving oral agreements) and 1 abuse of dominance case. Eight cases have been closed whereas in 2012 alone, the SAIC rendered administrative penalties on 6 cases13.

  • SAIC penalized Hunan insurance companies for monopolizing the new auto insurance market

In 2012, the SAIC authorized Hunan AIC to investigate the monopoly agreement entered into by insurance companies in Hunan Province to segment the market and fix the price. The insurance companies reached an authorization agreement with one insurance broker to handle all of the new auto insurance businesses and to coordinate the price and divide the market among each other. The Hunan AIC imposed a fine of RMB 1.7 million on the relevant companies in accordance with the AML14.

  • SAIC penalized second-hand auto dealers for market segmentation agreement

Another investigation relates to the market segmentation and price coordination agreement entered into by second-hand auto dealers in Anyang City, Henan Province. Henan AIC investigated the cartel agreement and imposed a fine of RMB 265,000 on the related companies, and confiscated unlawful gains of RMB 1.47 million15.

Our observations

Both the NDRC and the SAIC have become increasingly active since 2012 in combating cartel activities. Whereas in the past, their investigations were mainly against domestic companies, the LCD case clearly indicates that international cartels are also on the radar.

Another distinctive feature of cartel activities in China is that very often the cartels are organized or facilitated by industry associations16. Business operators should be particularly aware of such risks and establish internal protocols in the participation of industry associations.

Both agencies are also making efforts to improve transparency by publicizing information on their investigations through various channels and from time to time. This indeed is a welcoming improvement and we hope that more details can be released in the future to reduce legal uncertainties.

III. Antitrust Private Actions

In 2012, China's Supreme People's Court issued the judicial interpretation on antitrust private actions. The judicial interpretation contains 16 articles. Despite the lack of details, it provides clarity on certain fundamental issues such as standing of plaintiffs, jurisdiction, burden of proof, evidentiary rules, expert witness, the judicial process, form of civil liabilities and the statute of limitations.

According to Mr. JIN Kemu, the Deputy Chief Justice of the Intellectual Property Division of the Supreme People's Court, till the end of 2011, 61 antitrust private actions were accepted by courts over the country and 53 of them have been closed. The number of all cases accepted by courts rose significantly since 2012 as shown in the below table17 :

Aug. 2008-2009 2010 2011 Jun. 2012
Accepted 10 33 18 46
Closed 6 23 24 -

In 2012, the following two cases attracted the most attention:

  • Qihoo v.s. Tencent

In April, 2012, the Guangdong Higher People's Court held the first court hearing for the abuse of dominance action filed by Qihoo (the operator of 360 safety software) against Tencent (the operator of QQ instant messaging software) under the AML. Qihoo accused Tencent for abusing its dominance in the market of online instant communications services and claimed damages of RMB 150,000,000. The court hearing lasted for more than 8 hours, and attracted an audience of almost 400 people. This case has not yet been decided as of now.

  • Rainbow v.s. Johnson & Johnson

In May, 2012, the Shanghai First Intermediate People's Court rendered the judgment on the vertical monopoly agreement action filed by Beijing Rainbow (a medical equipment company in Beijing) against Johnson & Johnson ("J&J"). Beijing Rainbow alleged that J&J engaged in resale prices maintenance which led to the elimination or restriction of competition in the relevant market and claimed damages of RMB 14.4 million (USD 2.3 million). The court found that the distribution agreement did fix prices, but that alone was not enough and that the plaintiff failed to prove that competition has been restricted. On such basis, the court rendered the judgement in favour of J&J. Beijing Rainbow appealed to the Shanghai Higher People's Court and the decision is still pending.

Our observations

The judicial interpretation has provided valuable guidance on antitrust private actions and underlies the rapid increase of antitrust private actions in China. Abuse of dominance actions still represent the majority of such cases although it is still rare for a plaintiff to win on such a claim. Compared to the past when very often the cases were filed by individuals for nominal compensation, antitrust private actions today have become more mature and are being employed by companies as a part of their competition strategies.

The antitrust law in China has been on the fast lane since its adoption. We look forward to further contributing to such development and bringing the most updated insights in the Year of Snake.


1Mr. Shang released the information at the "Progress of Anti-monopoly Work in 2012? press conference held on December 27, 2012 in Beijing. The data was dated as of December 26, 2012. The complete text of the press conference is available at (in Chinese). The Antitrust & Competition team of King & Wood Mallesons handled 34 (22%) of the 154 closed cases.

2The six cases are Henkel/Tiande (joint venture), Western Digital/Hitachi, Google/Motorola, United Technologies/Goodrich, Wal-Mart/Yihaodian, and ARM/Giesecke & Devrient/Gemalto (joint venture).

3See the complete report of the "Progress of Anti-monopoly Work in 2012? press conference, available at (in Chinese).



6Note that MOFCOM is only legally obligated to disclose prohibited or conditionally approved cases.

7The NDRC is responsible for oversight of price-related monopoly agreements, abuse of dominance, and administrative monopolies, whereas the remaining conducts are within the purview of SAIC.

8Ms. Li disclosed the information at the China Competition Policy and Law Annual Conference 2012 held on December 18, 2012 in Beijing.

9See (in Chinese).

10The official press release is available at (in Chinese).

11The NDRC press release on the sea sand case is available at (in Chinese).

12The NDRC press release on the LCD case is available at; and (in Chinese).

13Ms. Ren disclosed the information at the China Competition Policy and Law Annual Conference 2012 held on December 18, 2012 in Beijing.

14For the original news releases on SAIC's website, please refer to

15For the original news releases on SAIC's website, please refer to

16According to Ms. Ren of the SAIC, industry associations organized all of the 16 cartels that SAIC investigated thus far.

17Mr. Jin disclosed the information at the China Competition Policy and Law Annual Conference 2012 held on December 18, 2012 in Beijing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.