Cartels 2025

CHINA Law and Practice Contributed by: Qian Xiaoqiang, Yang Yikai and Chu Linxian, Haiwen & Partners

• Provisions on Prohibiting Abuse of Intellectual Property Rights to Eliminate or Restrict Com - petition (2023); • The Notice of the Anti-monopoly Commission and the SAMR on Establishing a System of “Three Documents and One Letter” for Anti- monopoly (2023); • Guidelines on Anti-monopoly Compliance for Undertakings (2024); • Interpretation of the SPC on Several Issues concerning the Application of Law in the Trial of Monopoly related Civil Dispute Cases (2024); and • Anti-monopoly Guidelines of the Anti-monop - oly and Anti-unfair Competition Commission of the State Council for the Pharmaceutical Field (2025). 2. Early Stages of Cartel Enforcement 2.1 Initial Investigation In practice, cartel investigations can be triggered in one of the following ways. • Customers, competitors and upstream/down - stream parties can act as whistle-blowers (Article 46 of the AML provides that any entity may report alleged monopolistic conduct to the Competition Authorities). • The Competition Authorities may open an investigation on their own initiative. • Other governmental authorities may pass on related information to the Competition Authorities. • A participant in a cartel arrangement may voluntarily confess their involvement to the Competition Authorities to seek leniency. Following the establishment of the “Three Docu- ments and One Letter” system for anti-monopoly

enforcement in December 2023, before officially accepting a case, the authorities can now issue a Reminder Letter to the target undertaking and such undertaking must then provide a written report detailing the remedial actions taken in response. If the remedial actions outlined in the Reminder Letter are not implemented on time, are insuffi - cient, or if the suspected cartel activity has led to public outcry or negative impacts, the authorities can issue a Notice of Regulatory Talk. The enter - prise must then submit a written report on the corrective measures taken. Failure to adequately address the issues within the stipulated time - frame, insufficient rectification, or recurrence of the issue after initial correction will lead the authorities to formally accept the case and initi - ate a full investigation. 2.2 Dawn Raids/Search Warrants Article 47 of the AML grants the Competition Authorities relatively broad investigative powers, including entering and conducting inspections at the business premises and other relevant loca - tions of target undertakings (commonly referred to as dawn raids or surprise visits). Dawn raids are commonly employed in cartel-related cases, particularly those that are high-profile and com - plex or where the evidence is not easy to obtain. Obtaining the approval from the principal of the Competition Authorities would be sufficient to initiate dawn raids. Throughout the investigation process (including dawn raids), the Competition Authorities may undertake various investigation measures (see 2.5 Obtaining Evidence/Testimony ). The under - taking and its employees, or other entity/person related to the case, are required to co-operate and respond to inquiries from the Competition Authorities, to be interviewed and to submit/

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