Provisions on Procedures for Investigation and Handling of Cases of Monopolistic Agreements and Cases of Abuse of Dominant Market Position by Administrations for Industry and Commerce

The State Administration for Industry and Commerce may, based on work requirements, delegate responsibility for anti-monopoly law enforcement work related to monopolistic agreements and abuse of dominant market position to the administrations for industry and commerce of relevant provinces, autonomous regions and municipalities directly under the central government (Provincial-level AICs).

Article 3: The State Administration for Industry and Commerce shall be responsible for investigating and handling the following monopolistic acts:

(1) those that have a sigificant impact nationwide; and

(2) others over which the State Administration for Industry and Commerce deems that it ought to have jurisdiction.

Responsibility for the investigation and handling of the following monopolistic acts may be delegated to Provincial-level AICs:

(1) those occurring within the relevant administrative region;

(2) those occurring across more than one province, autonomous region and/or municipality directly under the central government, but where the main place of their occurrence is in the relevant administrative region; and

(3) others for which the State Administration for Industry and Commerce deems jurisdiction may be delegated to Provincial-level AICs.

Delegation shall be on a case by case basis. A Provincial-level AIC to which authority has been delegated may not further delegate such authority to a lower-level administration for industry and commerce.

Article 4: An administration for industry and commerce shall discover monopolistic acts ex officio or by means such as reports, transfer by another authority and assignment by a higher-level authority and investigate and handle the same in accordance with the law.

Article 5: Any work unit or individual shall have the right to report suspected monopolistic acts to the administration for industry and commerce, and the administration for industry and commerce shall keep the identities of such reporters confidential.

Reports given in written form shall include the following details:

(1) the basic particulars of the reporter: if the reporter is an individual, he/she shall provide his/her name, home address, contact information, etc.; if the reporter is a business operator, it shall provide its name, address, contact information, the industry it principally engages in, the products it produces or the services it provides, etc.;

(2) the basic particulars of the party being reported: including the business operator's name, address, the industry it principally engages in, the products it produces or the services it provides, etc.;

(3) the facts relating to the suspected monopolistic act: including facts pertaining to the perpetration of the monopolistic act in violation of laws, regulations and rules by the party being reported and the time and place such act was perpetrated;

(4) relevant evidence: including documentary evidence, physical evidence, witness statements, audio and video information, computer data, assessment conclusions, etc.; the relevant evidence shall be signed by the person providing the same and the source of such evidence shall be indicated; and

(5) whether a report has been given to another administrative authority or an action instituted in a people's court in respect of the same facts.

Article 6: The State Administration for Industry and Commerce and Provincial-level AICs shall be responsible for accepting reporting materials. If an administration for industry and commerce below the provincial level receives such materials, it shall forward the same to the Provincial-level AIC within five working days.

After receipt of reporting materials, the accepting authority shall make a record thereof and review their contents.

If reporting materials are incomplete, the reporter shall be notified to provide the missing materials in a timely manner.

In the case of a written report provided anonymously, if it contains specific facts concerning a violation of the law and provides relevant evidence, the accepting authority shall make a record thereof and review its contents.

Article 7: A Provincial-level AIC shall review reports on suspected monopolistic acts mainly occurring within its administrative region, and report to the State Administration for Industry and Commerce the results of its review and its opinions on whether a case is to be opened.

If reporting materials are complete and a report concerns a suspected monopolistic act that involves two or more provincial-level administrative regions, the Provincial-level AIC shall forward the reporting materials to the State Administration for Industry and Commerce in a timely manner.

Article 8: The State Administration for Industry and Commerce shall make a decision on the opening of a case and the investigation and handling thereof based on the results of the review of the contents of a report. The State Administration for Industry and Commerce may itself open a case and investigate and handle the same or, alternatively, it may, in accordance with Article 3 hereof, delegate the opening of the case and the investigation and handling thereof to the relevant Provincial-level AIC.

Article 9: With respect to a case that it itself has decided to open and handle, the State Administration for Industry and Commerce may conduct the investigation itself or have the same conducted by the administration for industry and commerce of the relevant provincial level, city with independent development plans or sub-provincial level municipality.

With respect to a case that it has been delegated to open and handle, the Provincial-level AIC shall arrange the work relating to the investigation of such case in accordance herewith.

Article 10: Following the written report of the person in charge of the authority with the authority to investigate and handle monopoly cases, and after approval, the administration for industry and commerce may, in conducting the investigation of a suspected monopolistic act, take the following investigation measures:

(1) entering the business premises or other relevant premises of the business operator being investigated to conduct an inspection;

(2) questioning the business operator being investigated, materially interested parties and other relevant work units and individuals and requiring them to give an explanation of relevant matters;

(3) reviewing and taking copies of relevant documents, agreements, accounting books, business correspondence, electronic data and other such documents and information of the business operator being investigated, materially interested parties and other relevant work units and individuals;

(4) placing under seal or seizing relevant evidence; and

(5) making inquiries concerning the business operator's bank accounts.

Article 11: When investigating a case, the law enforcement personnel of the administration for industry and commerce may not number less than two and they shall present their credentials.

Article 12: When investigating a suspected monopolistic act, an administration for industry and commerce may require the business operator being investigated, materially interested parties and other relevant work units and individuals (Investigation Subjects) to provide the following written materials within a specified period of time:

(1) the basic particulars of the Investigation Subject, including organisational form, name, contact person and contact information, and a photocopy of the duplicate of its business license or registration certificate of an association legal person and legal person organisation code; if the business operator is an individual, he/she shall provide a photocopy of his/her ID card and his/her contact information;

(2) if the Investigation Subject is a business operator, it shall additionally provide an account of its production and other business, details of its annual sales turnover, tax payment details, information on business transactions and co-operation agreements with transaction counterparties, details of overseas investments, etc. during or for the most recent three years, and if it is a listed company, it shall additionally provide information on the returns on its shares;

(3) if the Investigation Subject is an industry association, it shall provide the industry organisation charter, relevant industry policy basis, the industry's production and other business plans and details of the implementation thereof, details of meetings and activities, and documents relating to the suspected monopolistic act, etc.;

(4) the explanations given in response to relevant questions posed by the administration for industry and commerce; and

(5) other written materials that the administration for industry and commerce deems necessary.

The administration for industry and commerce and its working personnel shall bear an obligation of confidentiality in respect of the trade secrets to which they are privy in the course of the law enforcement process.

Article 13: A business operator being investigated and materially interested parties shall have the right to state their opinions. The administration for industry and commerce shall verify the facts, grounds and evidence presented by the business operator being investigated and the materially interested parties.

Article 14: The refusal to provide, incomplete provision of, or failure to provide by the specified deadline, relevant materials and information, the provision of fraudulent materials and information, the concealment, destruction or diversion of evidence, or the refusal of, or interference with, an investigation shall be handled in accordance with Article 52 of the Anti-monopoly Law.

Article 15: A business operator that is suspected of committing a monopolistic act may, during an investigation, submit an application to suspend such investigation and undertake to take specific measures to eliminate the effect within the time limit approved by the administration for industry and commerce.

Article 16: An application for suspension of an investigation shall be submitted in writing and be signed and sealed by the legal representative, other person in charge of the organisation or the individual. The written application shall contain the following particulars:

(1) the facts of the suspected violation of the law and the effect that it could have;

(2) the specific measures to be taken to eliminate the effect; and

(3) the schedule for realisation of the undertaking and a warranty statement.

Article 17: The administration for industry and commerce may, pursuant to the application by the business operator being investigated and after taking into consideration specific matters such as the nature of the act, its duration, its consequences and its social impact, decide to suspend the investigation and render a written decision to suspend the investigation. The written decision to suspend the investigation shall specify the facts pertaining to the suspected violation of the law by the business operator being investigated, the specific contents of the undertaking, the specific measures and deadline to eliminate the effect, the legal consequences of failure to perform or of partial performance of the undertaking, etc.

Article 18: If a decision to suspend the investigation is rendered, the business operator shall submit to the administration for industry and commerce a written report on the progress in its performance of the undertaking by the specified deadline.

Article 19: The administration for industry and commerce shall monitor the business operator's performance of its undertaking. If the business operator is determined to have performed its undertaking, a decision may be made to terminate the investigation and a written decision to terminate the investigation shall be rendered. The written decision to terminate the investigation shall specify the facts pertaining to the suspected violation of the law by the business operator being investigated, the specific contents of the undertaking, the specific measures to eliminate the effect, the specific steps and time taken to perform the undertaking, etc.

The investigation shall be resumed if:

(1) the business operator fails to perform its undertaking;

(2) a material change in the facts on which the decision to suspend the investigation was based occurs; or

(3) the decision to suspend the investigation was rendered on the basis of incomplete, incorrect or misleading information provided by the business operator.

Article 20: If a business operator pro-actively reports matters relating to a monopolistic agreement that has been reached and provides important evidence, the administration for industry and commerce may, in view of the circumstances, reduce the penalties on such business operator or exempt it from penalties.

The provisions of the foregoing paragraph shall not apply to the organiser of the monopolistic agreement.

Important evidence shall be evidence that is capable of initiating an investigation or that plays a key role in determining an act of monopolistic agreement.

Article 21: If a business operator is able to show that any of the circumstances set forth in Article 15 of the Anti-monopoly Law apply to the agreement reached, the administration for industry and commerce may exempt the relevant act.

Article 22: If the administration for industry and commerce, after investigation and verification of a suspected monopolistic act, determines that a monopolistic act is constituted, it shall render in accordance with the law a decision to impose administrative penalties.

Article 23: Before rendering a decision on administrative penalties in a major monopoly case, the State Administration for Industry and Commerce shall report the matter to the Anti-monopoly Commission of the State Council.

An authorised Provincial-level AIC shall render a decision to suspend an investigation, terminate an investigation or impose administrative penalties in accordance with the law, but shall report the matter to the State Administration for Industry and Commerce before rendering such decision. Within 10 working days after rendering the decision, the Provincial-level AIC shall submit the relevant information, relevant written decision and the final case investigation report to the State Administration for Industry and Commerce for the record.

Article 24: With respect to reports to which the State Administration for Industry and Commerce, after consideration, determines that the Anti-monopoly Law does not apply but that may be handled with the application of other industry and commerce laws or regulations, the State Administration for Industry and Commerce shall transfer the same in a timely manner to the relevant administration for industry and commerce for handling in accordance with the law. If the report falls under the jurisdiction of another administrative authority, it shall transfer the same to the other competent authority in accordance with the law.

Administrations for industry and commerce below the provincial level may, in accordance with other laws and regulations, conduct monitoring inspections of competition restricting acts carried out in their jurisdictions by public enterprises, or other business operators that enjoy an exclusive position, in accordance with the law.

Article 25: An administration for industry and commerce may make public monopoly cases that have been investigated and handled in accordance with the law.

Article 26: Where these Provisions are silent on the procedures for the investigation, hearing and punishment of monopolistic acts, matters shall be handled in accordance with relevant provisions of the PRC Administrative Penalty Law, the Provisions for the Procedure for the Imposition of Administrative Penalties by Administrations for Industry and Commerce and the Rules for the Hearing of Administrative Penalty Cases by Administrations for Industry and Commerce. However, with respect to provisions on time limits, the Provisions for the Procedure for the Imposition of Administrative Penalties by Administrations for Industry and Commerce and the Rules for the Hearing of Administrative Penalty Cases by Administrations for Industry and Commerce shall not apply.

Article 27: If a party is dissatisfied with a decision, such as one to impose administrative penalties etc., rendered by an administration for industry and commerce in accordance herewith, it may apply for administrative review or institute an administrative action in accordance with the law.

Article 28: Administrations for industry and commerce shall, in the course of their anti-monopoly law enforcement work, strengthen information communication and law enforcement co-operation with other anti-monopoly law enforcement authorities and relevant departments.

Article 29: If a member of the working personnel of an administration for industry and commerce violates these Provisions by abusing his/her authority, being derelict in his/her duties, practising favouritism by committing fraud or disclosing trade secrets to which he/she was privy in the course of a law enforcement process, and the same is insufficient to constitute a criminal offence, administrative sanctions shall be imposed in accordance with the law; if he/she is suspected of having committed a criminal offence, the case shall be transferred to the judicial authorities for handling.

Article 30: These Provisions shall not govern the investigation and handling of pricing monopolistic acts related to monopolistic agreements or abuse of dominant market position.

Article 31: The State Administration for Industry and Commerce is in charge of interpreting these Provisions.

Article 32: These Provisions shall be effective as of July 1 2009.