CHINA Law and Practice Contributed by: Qian Xiaoqiang, Yang Yikai and Chu Linxian, Haiwen & Partners
to deal with the preservation and potential loss of evidence in cartel cases involving messaging applications and chat platforms. According to the AML, if a company is found to have deliberately destroyed or failed to produce relevant evidence, it may face severe consequences (see 1.2 Regu- latory/Enforcement Agencies and Penalties ). SAMR has not issued specific guidelines on this matter. 7.6 “No Poach” and Labour Market Allocation Conduct Although the AML and its supporting regula - tions do not explicitly classify “no poach” agree - ments or labour market allocation as monopoly agreements, nor have there been any known enforcement actions, there are indications that these issues have been under the Competition Authorities’ radar. On 31 July 2023, the Competi - tion Authorities disclosed that it had interviewed four major hog farming companies, informing them that their agreement to sign “Mutual Non- Poaching Pact” violated the spirit of the AML, which was interpreted as China’s first antitrust enforcement action targeting “no poach” agree - ments. However, the standards for determining when a no-poach agreement constitutes cartel behav - iour have not been clearly defined, and no further legal clarification has been provided. 7.7 Leniency v Ex Officio Investigations See 3.1 Leniency . 7.8 Domestic v International Investigations Over the past five years, the majority of publicly known cartel cases in practice concern the Chi - nese market only.
However, China’s international antitrust enforce - ment might be intensified, as seen in SAMR’s recent investigations into NVIDIA, Google and DuPont. Meanwhile, China is enhancing co- operation with foreign regulators, exemplified by the first China-Japan-Korea Trilateral Antitrust Dialogue in March 2024. These developments suggest that cross-border enforcement actions may increase, particularly in technology, semi - China’s AML and its supporting regulations have not yet established explicit provisions or guid - ance on antitrust issues related to ESG, but it is understood that cartel co-ordination (collusion among competitors, standard manipulation, industry alliances, joint commitments, sustain - ability pacts, etc) under the guise of ESG would be strictly scrutinised and prohibited, and the Competition Authorities have already monitored conductors and digital platforms. 7.9 Environmental, Social and Governance (ESG) Cartels The post-pandemic inflationary pressures and supply chain disruptions have led to rising costs and intensified price competition, which may increase the likelihood of cartel agreements among undertakings. A notable cartel case involved motor vehicle inspection companies in Liupanshui City, where firms colluded to raise service prices. The Com - petition Authorities found that heightened price competition following the pandemic was a key factor that drove these businesses to reach and implement a monopoly agreement. ESG-themed cartels. 7.10 Crisis Cartels
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