Antitrust in China – Review and Outlook 2025

Client Alert  |  March 18, 2025

This update provides an overview of China’s major antitrust developments during 2024 and expectations for 2025.  

Happy New Year of the Snake!

In 2024, we saw continued efforts by the Chinese authorities to build on the existing antitrust framework by supplementing new regulations and guidelines.  These refreshed rules provide valuable insights on the interpretation and application of the Anti-Monopoly Law (AML) in China.  On the merger control side, there has been a reduction in the overall volume of merger review cases given the increased notification thresholds, while technology and semiconductor mergers remain heavily scrutinized.  On non-merger enforcement, authorities are consistently pursuing industries that are close to people’s livelihood, with a focus on the public utilities sector, energy suppliers and the automobile industry.  Lastly, the Supreme People’s Court published a new judicial interpretation guide on monopoly civil dispute cases, which sheds important light on the procedural and substantive rules governing antitrust litigation in China.

The tech sector is likely to be a particular area of focus for SAMR, in particular given the trade tensions between the PRC and the United States.

I.   Legislative and Regulatory Developments

In 2024, several regulations were revised or introduced to further develop China’s antitrust framework.  Some selected highlights include:

  • Regulations on Filing Thresholds for Concentration of Undertakings (the “Merger Notification Thresholds Regulations”)
  • Guidelines on Horizontal Merger Review (the “Horizontal Merger Review Guidelines”)
  • Revised Notification Form for Anti-Monopoly Review of Simple Cases of Concentration Between Undertakings (the “Simplified Form”) and Publication Form for Simple Cases of Concentration Between Undertakings (the “Public Notice Form”)
  • Guide to the Anti-Monopoly Compliance of Undertakings (the “Undertakings’ Compliance Guide”)
  • Interim Provisions on Regulation of Unfair Competition on the Internet (the “Internet Regulation Provisions”)
  • Antitrust Guidelines on Standard-Essential Patents (SEP) (the “SEP Guidelines”)

A summary of these selected legislations is set out below.

Merger Notification Thresholds Regulations.  These State Council-issued regulations came into effect in early January 2024.  The filing thresholds are increased to reflect economic growth, such that undertakings must obtain merger clearance from SAMR if:

  1. The undertakings’ combined worldwide turnover is more than RMB 12 billion (~USD 1.66 billion)(an increase from RMB 10 billion (~USD 1.38 billion)) and the Chinese turnover of each of at least two of the undertakings involved is more than RMB 800 million (~USD 110 million) (an increase from RMB 400 million (~USD 55.2 million)); or
  1. The undertakings’ combined Chinese turnover is more than RMB 4 billion (~USD 552 million) (an increase from RMB 2 billion (~USD 276 million)) and the Chinese turnover of each of at least two of the undertakings involved is more than RMB 800 million (an increase from RMB 400 million).

Horizontal Merger Review Guidelines.  These SAMR guidelines, which came into effect in December 2024, provide insights on the general approach of SAMR in the evaluation of horizontal mergers based on market shares:

Combined Market Shares Evaluation
More than 50% Presumption of anticompetitive effects
25% to 50% Likely to have anticompetitive effects
15% – 25% Unlikely to have anticompetitive effects
Below 15% Presumption no anticompetitive effects

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The guidelines also offer an overview of the relevant tools used by SAMR in its merger review.  These include, for example, the Herfindahl–Hirschman Index (HHI) supplemented by Concentration Ratios (CRn) for assessing market concentration; and quantitative analysis methods such as Upward Pricing Pressure (UPP), Gross UPP Index (GUPPI), and Merger Simulation for analyzing unilateral effects.  Where anticompetitive effects are identified, SAMR may also look at whether any counteracting factors exist, such as constraints from potential competition, whether market entry is possible, timely, and sufficient, and buyer power.  The “failing firm theory” is also provided for the first time, where SAMR will consider whether: (1) the business operator being acquired is facing operational difficulties and will exit the market in the short term if not merged; (2) there is no alternative solution (other than the proposed merger) that would cause less damage to competition; and (3) compared to the market exit, the potential anticompetitive effects of the merger are weaker.

Further, the guidelines also explain how the authorities can obtain evidence materials from various sources apart from the concentration parties, including upstream suppliers, downstream/end customers, government departments, industry associations, and competitors.  In particular, the guidelines provide that the opinions of downstream customers on concentration are more important than the views of upstream suppliers and the merger parties.

Streamlined Simplified Filing Forms.  SAMR revised the Simplified Form and the Public Notice Form in September 2024.  These revisions simplified the procedure for transactions that are unlikely to have significant competitive effect in China by requiring parties to fill in less information and fewer details compared to before.  For example, parties are no longer required to prepare and submit a non-confidential version of the Simplified Form.  Further, the requirements for a detailed assessment of the impacts of the proposed concentration are reduced.  Similarly, the number of mandatory information items required in the Simplified Form has been reduced.

Undertakings’ Compliance Guide.  This guide, which took effect in April 2024, applies to businesses operating within China and those outside China if their activities impact the domestic market.  It outlines the structure for effective internal compliance management, including the roles of various departments and the responsibilities of the compliance governance department.  Businesses are encouraged to establish professional compliance teams, identify and assess compliance risks, and regularly update these assessments.  Additionally, an undertaking may apply for compliance incentives before and during the formal investigation and enforcement process.  Such incentives may include leniency or a reduction in the monetary penalty imposed, and even full exemptions from administrative penalties.  SAMR will decide on whether to grant such incentives based on factors such as the completeness, veracity, and effectiveness of the antitrust compliance mechanism of the business.

Internet Regulation Provisions.  These SAMR-issued provisions, which took effect in September 2024, are the first comprehensive regulations specifically aimed at preventing and deterring unfair competition online, protecting the rights of operators and consumers, and promoting the sustainable development of the digital economy.  The provisions prohibit acts such as causing confusion as to the source of products or services, false advertising, the use of misleading or false information that may damage the reputation of competitors, and using technical means (such as internet traffic hijacking) to disrupt competitors’ online business operations.  Platform operators are tasked with managing competitive behaviors, taking necessary actions against unfair practices, and maintaining records for at least three years.

SEP Guidelines.  These SAMR-issued guidelines, which took effect in November 2024, build on existing Chinese antitrust law and provisions, aiming to balance the interests of SEP holders and implementers by ensuring both intellectual property protection and fair market competition.  There is new guidance on the promotion of “ex-ante” and “in-process” supervision, requiring proactive reporting of possible antitrust issues to the authorities by parties such as SEP holders and operators.  Further, the new guidelines also require antitrust authorities to strengthen such pre-emptive and interim supervision.

Separately, the new guidance also states that in determining whether there is an abuse of SEPs to exclude or restrict competition, the authorities should give full consideration to the disclosure of information, licensing commitments, and licensing negotiations (in good faith) concerning the SEPs.  For example, SEP holders are required to declare that they agree to license other operators on a “fair, reasonable, and non-discriminatory” (FRAND) basis.  Nonetheless, the failure to engage in such “good conduct” in itself does not necessarily result in a violation of antitrust laws.

The SEP Guidelines also cover SEP patent pools, prohibiting the use of such patent pools to reach monopoly agreements.  In addition, guidance is provided on the determination of SEP-related abuse of dominant market position, where the antitrust authorities will consider whether SEP holders are charging unfairly high royalties, imposing unreasonable terms, or forcing SEP implementers to accept package licensing.  There is also guidance restricting SEP holders from abusing the remedies for infringement of patent rights.

Further Legislative Efforts.  In addition to the various finalized regulations and guidance discussed above, SAMR introduced draft regulations in 2024, including the Draft Measures for the Implementation of the Regulation on Fair Competition Reviews, and the Draft Interim Measures for the Administration of Compliance Data Reporting for Online Transactions.  SAMR is also expected to formulate penalty scales for monopolistic conduct and abuse of dominance to ensure consistent enforcement.  It appears that sustained legislative efforts can be expected in 2025.

II.   Merger Control

Merger Review

In 2024, SAMR closed 643 merger review cases in total (as compared to 797 cases in 2023).  Of these, 623 (~97%) received unconditional approval, 1 received conditional clearance, and 19 were withdrawn by the filing parties after SAMR’s acceptance of their case.

Overall, there were fewer merger cases for review, likely because of the increased merger notification thresholds (see above).  Of the cases notified, SAMR completed most reviews within 30 days (around 91% of cases were reviewed under the simplified procedure).  That said, SAMR took 512 days to complete its review in the sole conditional clearance case, which is much longer than the average review time of 309 days in 2023.  The lengthy review was attributable to SAMR’s exercising of its relatively new power to extend the review period by “stopping the clock” and reflects SAMR’s strategy to focus its resources on cases that raise substantive competitive issues.

This conditional clearance case was the JX Nippon/Tatsuta merger, which involved two Japanese entities in the semiconductor space and was conditionally cleared in June 2024.  This case is an example of SAMR’s authority to impose remedies on a deal that fell below the merger notification threshold.  Specifically, the deal was first notified in January 2023 but fell below the notification thresholds when the thresholds were raised in January 2024.  The parties requested to withdraw the filing based on the new turnover thresholds, but SAMR declined the request and continued with its review, eventually issuing a conditional clearance with a series of behavioral remedies imposed for a period of 8 years.  The remedies include:

  • When selling JX Nippon and Tatsuta products to Chinese customers, neither JX Nippon nor its distributors shall: (i) bundle products or impose unreasonable conditions; (ii) restrict separate purchases or discriminate against customers who do so; or (iii) obstruct partners from choosing third-party products;
  • JX Nippon shall supply blackened rolled copper foil and isotropic conductive adhesive films on FRAND terms; and
  • JX Nippon shall maintain compatibility levels with third-party products unless required by customers.

Another case worth highlighting is the Synopsys/Ansys acquisition between two US software companies, which is the largest technology sector deal in 2024.  Notably, SAMR exercised its discretionary power to call in this merger in May 2024, even though the acquisition was below the revised notification thresholds.  This call-in was suspected to be due to concerns from Chinese domestic competitors and downstream customers over the horizontal effects of electronic-design automation.  Furthermore, the merger parties are broadly active in simulation software and electronic design automation tools and have significant key strategic presence in China, including in semiconductors, automotive, and aerospace.  These are all sectors that SAMR has been historically focusing its review on and it is expected that SAMR will continue to keep a close eye on these industries.

Gun-Jumping Enforcement

Following the Chinese Anti-Monopoly Law (AML) amendments in 2022 (see our 2022 Review) and SAMR’s release of the Merger Control Compliance Guidelines in 2023 (see our 2023 Review), SAMR increased the gun-jumping fines and clarified the sanctions for gun-jumping.  These sanctions can be up to 10% of the undertaking’s revenue in the prior year for cases that have the effect of restricting competition (which can be further multiplied by two to five times for particularly serious cases) or up to RMB 5 million (~ USD 0.69 million) for cases that do not restrict competition.

In 2024, we saw the first two gun-jumping decisions published by SAMR since the 2022 AML amendments.  The first decision, published on 7 June 2024, was made against Shanghai Highly (Group) Co., Ltd and Qingdao Haier Air Conditioner Gen. Corp., Ltd, where SAMR fined each company RMB 1.5 million (~USD 0.21 million) for obtaining a joint venture business license before obtaining merger approval from SAMR.  While SAMR did approve the joint venture in the end, obtaining the business license typically indicates the implementation of the joint venture, and therefore the parties were found to have improperly “jumped the gun”.

The second gun-jumping decision, published on 5 August 2024, involved Maoming Urban and Rural Construction Investment and Development Group, where it completed the share transfer registration of the acquisition of a 51% stake in Guangdong Zhongyuan Investment during the public notice period (and therefore before SAMR clearance).  While SAMR ultimately found no exclusion or restriction of competition, it still imposed a fine of RMB 1.75 million (~USD 0.24 million) for gun-jumping.

The increased fines and clear sanctions indicate that SAMR is committed to enforcing compliance and deterring companies from bypassing regulatory approval processes.  The enforcement actions will likely encourage compliance awareness and more cautious behavior from companies involved in mergers and acquisitions.

III.   Non-Merger Enforcement

Like previous years, the enforcement decisions published by SAMR in 2024 indicate a continued focus on the usual sectors, including public utilities, energy suppliers, and construction material manufacturers.  While pharmaceutical corporations and industry associations have not been a focus this year, unlike in 2023, automobile companies are back in the spotlight.  In 2024, automobile companies had the highest number of enforcement actions brought against them.  In total, SAMR and local AMRs brought enforcement actions against over 64 automobile companies and related associations.

A key development in 2024 is the completion of Alibaba’s three-year compliance rectification program under SAMR’s supervision, which began in 2021 when SAMR fined Alibaba RMB 18.2 billion (~USD 2.51 billion) for Alibaba’s restrictive dealing practices.  Specifically, Alibaba was found to have restricted platform merchants to exclusively use the Alibaba platform by prohibiting merchants from opening stores or participating in promotional activities on other competitive platforms.  On 30 August 2024, SAMR announced that Alibaba has completion the rectification program and recognized its compliance efforts.

Similarly, Meituan also received a hefty fine of RMB 3.4 billion (~ USD 469 million) from SAMR back in 2021 for abusing its market position by implementing the “choose one from two” obligation, forcing merchants to form partnerships and distribute products exclusively with its platform.  In November 2024, Meituan announced that as part of its rectification efforts, it would invest 1 billion RMB to share profits with merchants on the platform.  The first batch of funds is expected to cover 15,000 shops to support the innovative development of catering merchants.  Interestingly, while Meituan’s rectification program should have ended in October 2024 according to the initial timeline set out in SAMR’s decision, we have yet to see any official announcement from SAMR on the completion of Meituan’s rectification program.

On 13 August 2024, the first data monopoly enforcement case by an AMR took place, where the Shanghai Municipal Administration for Market Regulation fined Ningbo Sumscope Information Technology Co Ltd (Sumscope) for monopolizing financial data products.  Sumscope, a financial information technology company, entered into an exclusive agreement with a bond broker, granting exclusive rights to use and resell the broker’s real-time bond brokerage transaction data.  Sumscope then processed and packaged this data into a product, which it sold to downstream customers.  The Shanghai AMR found that Sumscope’s refusal to provide such data to other service providers constituted a refusal to deal.  Additionally, Sumscope imposed unreasonable trading conditions by setting a minimum transaction amount of RMB 700,000 (~ USD 96,600) for its information services.  The AMR determined that Sumscope abused its market dominance and fined the company RMB 4.53 million (~ USD 0.63 million).  This enforcement highlights the authority’s focus on ensuring the efficient circulation of financial data.

IV.   Antitrust Litigation

In the antitrust litigation space, the Supreme People’s Court (the “SPC”) issued the Judicial Interpretation Concerning the Application of Law in the Trial of Monopoly Civil Dispute Cases (the “Civil Judicial Interpretation”), which took effect on 1 July 2024, replacing the previous judicial interpretation from 2012.  The Civil Judicial Interpretation introduces several key updates and clarifications to the legal framework governing antitrust litigation in China.  Some highlights include:

  • In terms of procedural rules for monopoly-related civil disputes, the Civil Judicial Interpretation has alleviated the burden of proof on plaintiffs by confirming the high probative value of antitrust administrative decisions in follow-on litigation, clarifying situations where market definition does not need to be proven, and reducing the difficulty of proving market dominance.  The judicial interpretation also implements the requirement under the AML to improve the coordination mechanism between judicial and administrative enforcement, and specifies that litigation can be “suspended” when parallel administrative enforcement is ongoing, and that the limitation period will be interrupted by administrative complaints, among other mechanisms.
  • Regarding substantive rules, the Civil Judicial Interpretation provides more comprehensive and detailed guidance for disputes involving monopoly agreements and abuse of market dominance.  For example, it clarifies the four elements of abuse of market dominance, establishes a more comprehensive framework for assessing unfair high/low prices, and adds new scenarios for identifying unreasonable terms.
  • Additionally, the judicial interpretation specifically addresses issues in the digital economy.  It offers responses to problems such as algorithmic collusion, most-favored-nation (MFN) clauses, and platforms openness issues.

The Civil Judicial Interpretation crystallizes the SPC’s judicial practices and is a welcomed addition to the existing guidelines, as it will provide greater legal certainty for market participants.

The SPC also published a total of nine representative anti-monopoly cases for the year of 2024.  These cases provide valuable guidance on the interpretation and application of AML in practice.  There are two cases particularly worth highlighting:

  • Patent on Desloratadine Citrate Disodium API Case: The SPC ruled that although the defendant held a dominant market position, this position was significantly weakened due to strong indirect competition constraints from the downstream market.  Furthermore, the defendant’s practice of exclusive dealing did not exceed the scope of legitimate exercise of patent rights and therefore did not constitute an abuse of market dominance.  Additionally, the SPC provided helpful guidance on identifying unfairly high prices, stating that a significant price increase relative to cost increase alone is insufficient to prove unfair pricing.  Instead, factors such as the internal rate of return after the price increase and the alignment between price and economic value must be comprehensively considered.
  • Industrial Lubricants Hub-and-Spoke Agreement Case: The SPC found that Shell (China) Limited coordinated and organized its authorized distributors to engage in practices such as bid-rigging and submitting high bids, effectively acting as an organizer of a horizontal monopoly agreement among the distributors.  In accordance with China’s Tort Liability Law, the SPC held that Shell (China) and the relevant distributors should be jointly liable for their actions as co-infringers, among other liabilities.  This case is the first hub-and-spoke agreement monopoly case adjudicated by Chinese courts.  Since the alleged monopolistic behavior occurred before 2017, which predates the enforcement date of the 2022 AML, the 2008 AML applies to this case.  Although the 2008 AML did not explicitly regulate hub-and-spoke agreements, the SPC was still able to address civil tort liability under the 2008 AML and the Tort Liability Law.  The 2022 AML formally incorporated hub-and-spoke agreements into its regulatory scope under Article 19.  This case not only highlights the application of the 2008 AML but also provides valuable guidance for interpreting and enforcing Article 19 of the 2022 AML in future cases.

In addition, the case of Li v. Didi also offers insightful perspectives on legal issues and practical interpretations of the AML.  This case involves a claim filed by an individual consumer against Didi, alleging that the company engaged in differential treatment towards plaintiff through big data and algorithms, constituting an abuse of market dominance.  In December 2023, the Beijing Intellectual Property Court dismissed plaintiff’s claims in the first instance judgement.  In November 2024, the SPC upheld the decision made in the first instance and rejected plaintiff’s appeal.  The SPC ruled that ride-hailing services do not constitute a separate relevant product market.  Instead, the relevant market in this case should at least include the broader transportation service market, which encompasses both ride-hailing services and traditional taxi services that can be booked online.  The court found that Didi does not hold a dominant position in this relevant market.  Furthermore, the differential treatment applied to different user accounts was deemed to have legitimate justification and did not constitute an abuse of market dominance.

Several cases highlighted in our 2023 Review remain ongoing, including the Lizhen v. Alibaba case, for which the SPC held an open trial in January 2025, and the JD.com v. Alibaba case, where Alibaba filed an appeal with the SPC.  We will continue to monitor the developments in these cases and the SPC’s rulings in 2025.

V.   Conclusion

Throughout 2024, the Chinese authorities have continued their efforts to provide comprehensive guidance on the compliance, enforcement and interpretation aspects of the AML.  Meanwhile, we anticipate increasing overlap between administrative enforcement and judicial activities, and the coordination between the two will be a key focus in the coming year.  Businesses are advised to closely monitor regulatory and enforcement developments, thoroughly assess anti-monopoly compliance risks in their business activities, and proactively formulate compliance strategies to address potential challenges.

The following Gibson Dunn lawyers prepared this update: Sébastien Evrard and Katie Cheung.

Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Antitrust and Competition practice group, or the following authors in the firm’s Hong Kong office:

Sébastien Evrard (+852 2214 3798, sevrard@gibsondunn.com)

Katie Cheung (+852 2214 3793, kcheung@gibsondunn.com)

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