How to deal with an NDRC investigation

This year, the National Development and Reform Commission (NDRC) has launched a series of high-profile investigations into price fixing. In the past, China has been lax on enforcing monopolistic practices and in 2012 the NDRC imposed sanctions totalling a mere $3 million.

“The NDRC wants to make a greater impact in terms of enforcement through these investigations. Especially among consumers and the consumer industry as the products the Commission is looking at are all products that are important in everyone's daily life,” said Michael Han, a competition lawyer with Freshfields in Beijing.

Decisive action

This increased action has presented a challenge for businesses in China. There is a definite lack of awareness surrounding the Anti-monopoly Law and, when the NDRC begins investigations, they are often unsure how to respond.

“Companies need to fully cooperate with the investigation, given the enforcement power the agencies have. This is especially true as many companies lack awareness of the Anti-monopoly Law and do not have an effective compliance programme in place. Also, it is often not difficult for the agencies to find hard evidence of the infringement at the outset of the investigation” said Han.