CHINA Trends and Developments Contributed by: Wei Yingling, JunHe LLP
Rules of the Benchmark For illicit concentrations without anti-competitive effects where penalties could not be waived, cal - culation of the fine shall follow three steps: (1) determine the base fine; (2) adjust the base fine; and (3) determine the final fine. Each step will include a comprehensive test based on multiple factors. Base fine, lighter circumstances and heavier circumstances For illicit concentrations without anti-competitive effects, the base fine is set at CNY2.5 million. The base fine will be reduced to CNY1 mil - lion if there is any circumstance warranting a lighter punishment (lighter circumstance), and increased to CNY4 million if there is any cir - cumstance warranting a heavier punishment (heavier circumstance), as specified below. It will be under SAMR’s discretion to determine when there are both lighter and heavier circumstances. (1) Lighter circumstances: • taking the initiative to report the violation before SAMR obtains such information; • taking measures on its own initiative to elimi - nate or mitigate the consequences of the illicit concentration; • being coerced or induced by others on illicit concentrations. (2) Heavier circumstances: • instigating, coercing or inducing other under - takings; • committing illicit concentration again within one year from the date of receiving an admin - istrative penalty for the last illicit concentra - tion; • hindering or refusing to co-operate with enforcement officers in the performance of
transparency of the review and facilitate commu - nication between the undertakings and SAMR. The non-horizontal merger review guideline is expected to be released this year In addition to the Horizontal Guideline, SAMR has been working on a guideline for non-hori - zontal concentrations (“Non-Horizontal Guide - line”) and published the exposure draft on 27 June 2025. The draft Non-Horizontal Guideline has a similar structure to the Horizontal Guideline, and largely refers to provisions and rationales stipulated in the Horizontal Guideline if they are equally appli - cable to non-horizontal concentrations. Besides that, the draft Non-Horizontal Guideline includes rationales in competition analysis that are spe - cific to non-horizontal concentrations (eg, verti - cal foreclosure effect and bundling effect). Considering the timeline of the Horizontal Guide - line, it is expected that the formal guideline will be published within this year or early next year. Recent Enforcement Trend in Gun-Jumping Cases On 25 March 2025, SAMR released the Discre - tionary Criteria for Administrative Penalties for the Illegal Implementation of Concentrations of Undertakings (Trial) (“Benchmark”) dated 19 February 2025. The Benchmark unveils the underlying principles, calculation methods and specific factors that SAMR will consider when imposing administrative sanctions (though the main text is mostly focused on calculating the fine) on the illegal implementation of concentra - tions of undertakings (”illicit concentrations”). The Benchmark took effect immediately and covers violations after 1 August 2022.
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