China signals changes, tougher enforcement of Antimonopoly Law

October 27, 2021

BEIJING - The Chinese Government has released a draft of far-reaching changes to Antimonopoly Law, signalling tougher enforcement. In  Client Alert, lawyers Baker McKenzie say the proposed reforms follow earlier draft changes published in January 2020.

Key features include:

Tougher penalties, including administrative fines for individuals, potential criminal liability, and significantly higher fines for procedural violations (e.g., potentially over RMB 5 million/USD 784,000 for a failure to notify a merger).
Introduction of a 'stop-the-clock' mechanism for merger reviews.
Giving the State Administration for Market Regulation (SAMR) the legal authority to create safe harbours for certain types of non-hardcore conduct.
Possible exemptions/defences to the SAMR's previous hardline stance against resale price maintenance (RPM).
Codifying certain categories of illegal conduct for online platforms, building on the SAMR's prior work in this area.
A new public interest litigation mechanism, that may be initiated by People's Procuratorates against violations.

Baker McKenzie says the draft rules were published on October 23, 2021 for public comments1, and are subject to further revisions. The final version is expected to be issued in 2022.

BM says it is imperative that domestic and internal businesses operating in China continue to treat antitrust compliance as a top priority, and monitor these reforms closely. (ATI).