By Susan Ning, Hazel Yin and Yunlong Zhang

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in 2012, 142 cases (more than 92%) were approved unconditionally, 6 cases approved with conditions 2, and 6 cases withdrawn by the applicants.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: 




2012 (till Nov.)





Form of Concentration

Share Transfer





Joint Venture

















Relevant Industries








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

    1. NDRC

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.

 2. SAIC

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



Jun. 2012










 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.