Answer ... In principle, the State Administration for Market Regulation (SAMR) may open an investigation on its own initiative, in response to a complaint or upon a referral from other government agencies, provided that it reasonably believes that cartel activity is taking place.

Prior to the formal commencement of an investigation, SAMR will take all necessary steps to verify the facts and initial evidence. Internally, some necessary formalities must also be met (eg, preparation of a written report and approvals) before the enforcement proceedings are formally opened.

Answer ... Article 39 of the Anti-monopoly Law entrusts SAMR with broad investigative powers, including the power to:

• conduct on-site inspections of the business premises or other relevant places of the undertakings that are under investigation;
• make inquiries of the undertakings, interested parties and other relevant entities and individuals, and require them to provide information;
• review or make copies of relevant documents and information, including contracts, accounting books, business correspondence, electronic data and files of relevant entities or individuals;
• seize and detain relevant evidence; and
• make inquiries into the bank accounts of the undertakings.

Answer ... In general, the levels of cooperation and communication between SAMR and its counterparts in other jurisdictions remain high. This international cooperation is mainly focused on the merger control regime, in particular as regards global filings, which may be subject to conditional approvals. No international cooperation in relation to cartel enforcement has been observed thus far.

Answer ... Yes, during the investigation, SAMR may make inquiries of third parties in order to obtain further information concerning the suspected cartel.

In addition, during the hearing procedure, interested third parties may apply to participate and make statements.

Answer ... The general rights of SAMR during the investigation include the right to:

• undertake an investigation and exercise its investigative powers under the Anti-monopoly Law;
• approve or block a concentration of undertakings;
• issue a decision on the existence of cartel activity; and
• impose penalties.

Its obligations primarily relate to confidentiality. In particular, SAMR must take all necessary measures to protect the business secrets of the investigated party during the investigation.

Answer ... The rights of the target company during the investigation include the right to:

• state its opinions during the investigation, either itself or through its lawyers;
• where the target company may be subject to an administrative penalty, apply for a hearing and have its opinion been heard before the penalty decision is officially made;
• apply for leniency; and
• where the target company is subject to a penalty, seek relief either by filing administrative litigation against SAMR’s decision or by applying for administrative reconsideration of SAMR’s decision.

Target companies and individuals are also obliged to cooperate with the investigation and to submit information/material as required by SAMR.

Answer ... In China, attorney-client privilege has not yet been established.

Answer ... Usually, once the penalty has been imposed, SAMR will release the full decision on its website, with all business secrets and sensitive information redacted.