28 September 2022

China has significantly amended its Anti-Monopoly Law for the first time since its inception (“Amended AML”). The Amended AML came into effect on 1 August 2022 and includes new provisions such as new merger control thresholds, a significant increase in fines, a “stop-the-clock” mechanism for merger review, a safe harbour tool, and rules targeting platform economy companies.

The Amended AML has added “encouraging innovation” as a legislative goal in the General Provisions section. This is in keeping with the goals set out in the most recent Five-Year Plan (2021-2025). China’s 14th Five-Year Plan is discussed in our article titled “China’s 14th Five-Year Plan: Promoting “dual circulation” and more”.

This article sets out some key highlights of the Amended AML.

Below-threshold deals

China’s State Administration for Market Review (“SAMR”) is empowered by the Amended AML to require parties to notify it of transactions below filing thresholds if it considers the deal may raise competition concerns, even where the transaction does not meet SAMR’s mandatory notification thresholds.

SAMR is also separately seeking to increase notification thresholds as set out in the Provisions of the State Council on the Standards for Declaration of Consolidation of Business Operators. This is still in draft form and expected to be implemented before the end of the year.

Turnover threshold

A filing will be triggered if (1) the individual Chinese turnover of at least two undertakings exceeds RMB800 million in the preceding financial year and (2) the combined turnover of all undertakings exceeds RMB12 billion on a global basis and/or RMB4 billion within China.

“Market value” and “turnover ratio” thresholds

If the above turnover threshold is not met, the transaction will still be notifiable to SAMR if the following conditions are present:

  • The turnover of one of the undertakings in the concentration exceeded RMB100 billion in China in the previous financial year and the market value (or valuation) of the other undertaking in the concentration is no less than RMB800 million; and
  • Its turnover in China in the previous financial year shall account for more than one-third of its worldwide turnover.

Penalty regime overhauled

The penalties set out in the Amended AML have been significantly increased, as set out in the table below.

Table of amendments to penalties


Previous penalties

Penalties under Amended AML

Monopoly agreements

Concluded, implemented

·      Confiscation of illegal gains

·      1% to 10% of prior fiscal year revenue

·      Confiscation of illegal gains

·      1% to 10% of turnover in preceding year; where no turnover, fine of up to RMB5 million

Concluded, not implemented

·      Maximum fine of RMB500,000

·      Maximum fine of RMB3 million

Penalty for legal representative, main responsible person of undertaking where individual responsible for concluding monopoly agreement

·      N/A

·      Fine of up to RMB1 million

Aiding and abetting other undertakings in reaching a monopoly agreement (also known as hub-and-spoke agreements)

·      N/A

·      All penalties above apply

Industry association organises operators in industry

·      Maximum fine of RMB500,000

·      Deregistration if violation deemed severe

·      Maximum fine of RMB3 million


Concentrations (mergers, acquisitions, joint ventures)

With the effect of eliminating of restricting competition

·      Maximum fine of RMB500,000

·      1% to 10% of turnover in preceding year; where no annual sales, fine of up to RMB5 million

Without eliminating or restricting competition

·      Maximum fine of RMB500,000

·      Maximum fine of RMB5 million

Interfering in investigations

Obstruction of an investigation, refusal to provide required information, destruction of evidence, provision of false information

·      Individuals: Fine of RMB100,000




Amendments related to digital space

The Amended AML includes a new provision stating that “undertakings shall not use data or algorithms, technology, capital advantages, or platform rules, etc., to engage in prohibited monopolistic practices”. This provision could be interpreted as continuing the regulation of the digital space that has come about in the Data Security Law, Cybersecurity Law, and the Personal Information Protection Law.  

The provision relating to the abuse of a dominant market position has been amended to provide that undertakings with a dominant market position may not use data, algorithms, technology, or platform rules to abuse their dominant market position in the way set out in that clause (including for example selling commodities at an unfairly high price or refusing to trade with a counterparty without justifiable reasons).

The definition of “undertakings” has also been amended by the Amended AML to provide that the term as used in this law refers to “natural persons, legal persons, and unincorporated organisations that engage in the manufacture of or trade in goods or in the provision of services”.

“Stop-the-clock” mechanism

The Amended AML allows SAMR to suspend a merger review, and inform the parties in writing of this decision, in any of the following circumstances:

  • Notifying party does not submit requested information or materials in a timely manner
  • New facts or circumstances come to light that materially impact the merger review
  • Additional restrictive conditions on the merger need to be further evaluated and the parties agree

It appears that the merger review resumes - the clock is “restarted” - once the circumstances leading to the suspension are resolved.

Hub-and-spoke agreements

For the first time, hub-and-spoke agreements are specifically prohibited. The Amended AML provides that it is a violation of its provisions for companies to organise other companies to enter into anti-competitive agreements or by materially aiding and abetting the formation of such agreements. Penalties for breach of this prohibition will apply equally to the organisers, aiders and abettors.

Resale price maintenance agreements

An agreement that limits or fixes resale prices (known as resale price maintenance agreements or “RPMs”) will not be prohibited under the Amended AML if the parties can prove that it does not have the effect of restricting or eliminating competition. The Amended AML does not however provide guidance on the level of proof that will be required. RPMs are commonly prohibited in many jurisdictions, unless exempted by provisions such as Article 101(3) of the Treaty on the Functioning of the European Union which acknowledges that some restrictive agreements may generate objective economic benefits that outweigh the negative effects of the restriction of competition, and therefore exempts those agreements from these prohibitions.

Safe harbour

Article 18(3) of the Amended AML introduces a “safe harbour” clause in relation to the competitive assessment of vertical agreements. The use of the “safe harbour” tool is common in many jurisdictions and essentially provides certain competition infringements with protection from legal liability or penalty where certain conditions are met. Article 18(3) empowers SAMR to grant “safe harbour” for some vertical restraints including territorial restraints, single branding, non-compete and other exclusive arrangements. However, this new safe harbour provision does not provide specific market share thresholds but provides that undertakings must prove that their market shares in the relevant markets are below the standards “provided by the State’s antitrust authorities” as well as meet other conditions provided by the same.

Protections against abuse of administrative powers

A new article provides that administrative organs and organisations with functions of managing public affairs shall not abuse their administrative power to hinder other business operators from entering the relevant market or impose unequal treatment on other business operators or eliminate and restrict competition by means such as signing cooperation agreements and memorandums with business operators.