When its Anti-Monopoly Law (“AML”) went into effect in August 2008, China immediately became a significant antitrust enforcer on the world stage. On June 24, 2022, the National People’s Congress, China’s top legislature, passed the Amendment to the Anti-Monopoly Law of the PRC (the “Amendment”), the first significant changes to the AML in nearly fourteen years. The Amendment, which was signed into law by President Xi Jinping and published on June 24, will become effective on August 1. It marks a major milestone in antitrust enforcement in China.
The more significant aspects of the Amendment include:
- significantly enhanced penalties for AML violations, including the introduction of fines for individuals;
- the introduction of a discretionary “stop-the-clock” mechanism for merger reviews;
- the codification of a burden-shifting framework created by China’s courts that gives companies the opportunity to defend resale price maintenance agreements; and
- new safe harbor and burden of proof provisions for matters involving vertical agreements.
Consistent with trends in other jurisdictions around the world, the Amendment also features a special focus on key economic sectors such as the digital economy.
Following the publication of the Amendment, the State Administration for Market Regulation (“SAMR”), China’s lead antitrust enforcement authority, released six sets of draft implementing regulations for public comment. These cover subjects such as merger control and notification thresholds, anti-competitive agreements, abuse of a dominant market position, and the abuse of intellectual property rights to exclude or restrict competition. SAMR is accepting comments on these regulations until July 27, 2022.
How Covington Can Help
Covington’s global antitrust and competition practice guides clients through the often-complex web of antitrust and competition laws around the world to help them secure their most important business objectives. Our team, which includes many attorneys who have served in senior leadership roles at government enforcement agencies and in in-house positions, has decades of collective experience advising clients regarding their global antitrust and competition concerns. If you have any questions concerning the material discussed in this client alert, please contact any of the following members of our Antitrust/Competition practice: Jim O’Connell, James Marshall, and Alexander Wang.
This communication is intended to bring relevant developments to the attention of Covington & Burling LLP’s clients and other interested colleagues. It is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects mentioned herein. Please send an email to firstname.lastname@example.org if you do not wish to receive future emails or electronic alerts.
Continue Reading Significant Changes to China’s Anti-Monopoly Law to Take Effect in August