China’s Anti-Monopoly Law is not a compliance component that can be addressed through “after-the-fact remediation” in cross-border transactions, but rather a strategic variable that must be “pre-planned” at the outset. The 2022 amendment to the Anti-Monopoly Law of the People’s Republic of China (“AML”) opened the curtain on institutional upgrading; the historic upward adjustment of the notification thresholds and the promulgation of the Regulation on Fair Competition Review in 2024 marked a comprehensive restructuring of the regulatory framework; and the refinement of the “safe harbor” rules, the issuance of the Guidelines for the Review of Non-Horizontal Concentrations, and the enforcement signal released by the 7.5% fine percentage in the Ctrip case during 2025–2026 collectively heralded the advent of a new enforcement era characterized by denser rules, heavier penalties, and stronger extraterritorial effect. Against this backdrop, the applicability of Chinese law to wholly offshore transactions, the boundaries of notification obligations (including active investigations below the thresholds), the specific red lines for digital platforms, pharmaceutical and IP-intensive industries, and whether VIE structures enjoy any exemption have become the most frequently encountered practical challenges for multinational enterprises. This article, based on a review of the current rules and the latest enforcement practices, provides a systematic analytical framework and practical guidance for the above issues.
Anti-Monopoly Law
AML was adopted on 30 August 2007 by the 29th Session of the Standing Committee of the Tenth National People’s Congress (“NPC”) and took effect on 1 August 2008. It was amended for the first time on 24 June 2022 by the 35th Session of the Standing Committee of the Thirteenth NPC, with the amendments taking effect on 1 August 2022.
The AML, as amended in 2022, provides detailed definitions of the three core categories of monopolistic conduct—monopoly agreements, abuse of dominant market position, and concentration of undertakings—and specifically prohibits the use of data, algorithms, or platform rules to exclude or restrict competition. In addition, the AML rigorously constrains abuses of administrative power and requires government agencies to conduct fair competition reviews when formulating policies. The law establishes a penalty framework that includes substantial fines and public credit record disclosures.
The supporting rule system under the Anti-Monopoly Law, comprising administrative regulations, departmental rules, and guidelines, has expanded rapidly in recent years. The key instruments include: 1. The Provisions on the Review of Concentrations of Undertakings (2023) [https://www.gov.cn/zhengce/202305/content_6858355.htm]; 2. The Provisions on Prohibition of Abuse of Dominant Market Position (2023) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2023/art_fd238d3ec1284cb58a2e640255711ff6.html]; 3. The Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (2023) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2023/art_e155397fbe5c4c05ad3c1838c1322ad2.html]; 4. The Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings (2024 Revision) [https://www.gov.cn/zhengce/zhengceku/202401/content_6928388.htm]; 5. The Provisions on Prohibition of Monopoly Agreements (2025 Amendment) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2025/art_b480022de6d1440482d50319118efb66.html]; 6. Regulations on Fair Competition Review (2024) and Implementing Rules for the Regulations on Fair Competition Review (2025) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2025/art_2084c3ba225943c2a670d27e85fb00be.html];7. The Guidelines for Undertakings on Anti-Monopoly Compliance (2024) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/jzzcxds/art/2024/art_2d4b1705febf41c38856dda554e84857.html]; 8. Sector-specific anti-monopoly guidelines for the platform economy, active pharmaceutical ingredients, pharmaceuticals, automobiles, and intellectual property;9. The Antitrust Guidelines on Standard Essential Patents (2024) [https://www.sac.gov.cn/xxgk/zcjd/art/2024/art_7d6f0766331d4b91bd01a7549ef60d01.html];10. The Guidelines on the Review of Horizontal Concentrations of Undertakings (2024) [https://www.gov.cn/zhengce/zhengceku/202412/content_6993767.htm];11. The Guidelines on the Review of Non-Horizontal Concentrations of Undertakings (2025) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfes/art/2025/art_8789118a09884b0788bc8ddc54382019.html ;12. The Specification for Notification of Concentrations of Undertakings (2025) [https://mr.samr.gov.cn/portal/stdDetail/300287]; and13. Antitrust Compliance Guidelines for Internet Platforms (2026) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfys/art/2026/art_ad10c5301fcb426cb839153ca9f5a274.html].
I. Monopoly Agreements
Monopoly agreements are agreements, decisions, or other concerted practices that eliminate or restrict competition, and are divided into horizontal monopoly agreements and vertical monopoly agreements. The AML prohibits horizontal monopoly agreements (price fixing, output restrictions, market division, technology restrictions, and joint boycotts) as well as vertical monopoly agreements (resale price maintenance and minimum resale price maintenance).
The 2022 amendments introduced two significant new institutions: the “hub-and-spoke” conspiracy provision and the “safe harbor” rule for vertical monopoly agreements. Article 19 of the AML prohibits organizing other undertakings to enter into monopoly agreements or providing substantial assistance to do so. This provision directly closes off the conduct of the “hub” in hub-and-spoke conspiracies, prohibiting both the central “organization” of agreements and behind-the-scenes “substantial assistance” (such as transmitting competitively sensitive information or providing coordinating algorithms). In the intellectual property context, Article 6(2) of the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition further prohibits “using the exercise of intellectual property rights to organize other undertakings to enter into monopoly agreements or to provide substantial assistance to other undertakings in entering into monopoly agreements.”
The legal basis for the “safe harbor” rule is Article 18(3) of the AML, which provides that an undertaking that “can prove that its market share in the relevant market is below the standard prescribed by the anti-monopoly enforcement authority under the State Council and meets other conditions prescribed by the anti-monopoly enforcement authority under the State Council shall not be prohibited”. Under Article 17 of the Provisions on Prohibition of Monopoly Agreements as amended in 2025, the safe harbor thresholds are bifurcated. For agreements fixing resale prices to third parties and agreements setting minimum resale prices to third parties, both the undertaking and its trading counterparty must, during the term of the agreement, have annual market shares in the relevant market below 5% and annual turnover of the goods covered by the agreement below RMB 100 million (approximately US$14.82 million). For other vertical monopoly agreements as determined by the enforcement authority, the undertaking and its trading counterparty must each have annual market shares in the relevant market below 15%.
II. Abuse of Dominant Market Position
A dominant market position means a market position in which an undertaking is able to control the prices, quantities, or other trading conditions of goods, or is able to impede or affect the ability of other undertakings to enter the relevant market. The elements of an abuse of dominant market position generally include: the undertaking holds a dominant position in the relevant market; it has implemented abusive conduct that excludes or restricts competition; and such conduct lacks legitimate justifications. The prohibited forms of abuse expressly identified include unfair pricing, predatory pricing, refusal to deal, restricted dealing, tying or imposition of unreasonable trading conditions, and discriminatory treatment.
Article 23 of the AML identifies the factors to be considered in determining whether an undertaking holds a dominant position, including: the undertaking’s market share and the state of competition in the relevant market; the undertaking’s ability to control the upstream or downstream markets for sales or raw material procurement; the undertaking’s financial and technological resources (such as asset scale, R&D capabilities, and intellectual property); the degree of dependence of other undertakings on the undertaking in transactions; and the difficulty for other undertakings to enter the relevant market (technological barriers, user switching costs, etc.).
Article 24 further provides that an undertaking may be presumed to hold a dominant market position if it meets the following market share thresholds:1. A single undertaking: its market share in the relevant market reaches one-half (50%).2. Two undertakings: their combined market share reaches two-thirds (approximately 66.7%).3. Three undertakings: their combined market share reaches three-quarters (75%).
In response to the digital economy and high-tech competition, the 2022 AML introduced, for the first time in the General Provisions and the chapter on abuse of dominant market position, provisions targeting novel digital monopolistic means such as “data, algorithms, and platform rules”, strictly prohibiting undertakings from using data and algorithms, technology, and platform rules to implement unfair high pricing, refusal to deal, self-preferencing, or “choose one of two” restricted dealing arrangements. Under the Provisions on Prohibition of Abuse of Dominant Market Position and the Guidelines on the Review of Non-Horizontal Concentrations of Undertakings, when determining dominance on a platform, additional factors are considered, including network effects, lock-in effects, lock-in barriers, the ability to control traffic, and the ability to possess and process relevant data.
In the area of standard essential patents (SEPs) and patent pools, Article 17 of the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition prohibits patent pool entities from using the pool to restrict members from granting independent licenses outside the pool, or from forcing the combined licensing of competing patents, non-essential patents, or patents that have expired. Where the SEP holder has a dominant market position and the relevant conduct has the effect of eliminating or restricting competition, such conduct may be found to constitute an abuse of dominant market position. Under the Antitrust Guidelines on Standard Essential Patents, an SEP holder that violates its fair, reasonable, and non-discriminatory (FRAND) commitment by abusing remedies such as seeking injunctive relief without first engaging in good-faith negotiations, thereby forcing the licensee to accept unfairly high prices or unreasonable terms, will be deemed to have abused its dominant market position.
III. Concentration of Undertakings
Concentration of undertakings includes mergers of undertakings, acquisition of control over other undertakings through the acquisition of equity or assets, and acquisition of control over other undertakings or the ability to exercise decisive influence over other undertakings through contracts or other means. China operates a mandatory prior notification system for concentrations of undertakings, meaning that transactions meeting the filing thresholds may not be “gun-jumped” or implemented prior to clearance. Under the Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings effective January 2024, a concentration must be filed if the combined worldwide turnover of all participating undertakings exceeds RMB 12 billion (approximately US$1.778 billion) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million), or if the combined turnover in China of all participating undertakings exceeds RMB 4 billion (approximately US$593 million) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million). Even if a transaction does not meet these thresholds, if there is evidence that it has or may have the effect of eliminating or restricting competition, the enforcement authority still has the power to require the undertakings to file and initiate an investigation.
In conducting substantive review, cases are assessed primarily by distinguishing between horizontal concentrations (mergers of competitors) and non-horizontal concentrations (vertical or conglomerate mergers). The core of the assessment is whether the transaction would produce unilateral or coordinated effects that harm competition. Generally, in horizontal concentrations or upstream/downstream/related markets, if the participating undertakings’ combined market share in the relevant market exceeds 50%, the enforcement authority will directly presume an exclusionary or restrictive effect on competition; whereas in horizontal concentrations with a share below 15%, or non-horizontal concentrations where shares are all below 25%, the transaction typically enjoys a safe harbor presumption of no competitive harm.
Upon conclusion of the review, the enforcement authority will issue a decision of unconditional approval, prohibition, or conditional approval (imposing structural remedies such as asset divestitures, or behavioral remedies such as key technology licensing or maintaining independent operations to mitigate competitive risks).
Effective 1 August 2025, the State Administration for Market Regulation (“SAMR”) formally delegated review of certain simple-case concentrations of undertakings to five provincial-level market regulatory authorities: Beijing, Shanghai, Guangdong, Chongqing, and Shaanxi. In 2026, the system was further refined: certain non-simple cases were added to the delegated review scope (such as cases where the combined relevant market share falls between 15% and 25%), and Liaoning, Zhejiang, and Sichuan were added as delegated provincial-level authorities for simple cases, effective 1 August 2026.
Undertakings that gun-jump in violation of the prior notification requirement face severe legal consequences: if the transaction is determined to have exclusionary or restrictive effects on competition, a fine of up to 10% of the undertaking’s turnover from the preceding fiscal year may be imposed, and the undertaking may be ordered to divest shares or assets within a specified period to restore the pre-concentration state; even if no restrictive effect on competition is found, a fine of up to RMB 5 million (approximately US$741,000) may still be imposed, and in cases of particularly serious circumstances, the fine may be multiplied by two to five times.
On 27 May 2026, the SAMR published its administrative penalty decision regarding the illegal implementation of a concentration of undertakings in connection with Luxshare Precision Industry Co., Ltd.’s (“Luxshare”) acquisition of certain businesses of Wingtech Technology Co., Ltd. (“Wingtech”). Luxshare completed the acquisition of Wingtech’s said businesses without having filed a notification in accordance with the law, but voluntarily reported the illegal facts to the SAMR. Upon assessment, the transaction was found not to have the effect of excluding or restricting competition. Taking into account Luxshare’s voluntary reporting, cooperation with the investigation, and enhancement of its compliance management system, the SAMR imposed a fine of RMB 900,000 (approximately US$133,400). This case sends an important enforcement signal: voluntary reporting combined with robust compliance building may result in a significant mitigation of penalties.
Frequently Asked Questions on China’s Competition Law
I. Does China’s Anti-Monopoly Law Apply to Overseas Transactions? Does a Merger That Is Entirely Closed Abroad Require a Filing in China? Is a Transaction Below the Filing Thresholds Truly Safe?
China’s competition law applies to overseas transactions. Article 2 of the AML expressly provides: “This Law is applicable to monopolistic practices in economic activities within the territory of the People’s Republic of China, and it is applicable to monopolistic practices outside the territory of the People’s Republic of China which eliminate or restrict competition in the domestic market of China”. This provision establishes the extraterritorial application (effects doctrine) of the AML—that is, even if monopolistic conduct occurs entirely outside China, it is subject to the AML if it has an exclusionary or restrictive effect on competition in the domestic market.
The 2014 case concerning the proposed establishment of a new platform by three major shipping companies is an early and representative case. In October 2013, A.P. Møller - Maersk A/S (“Maersk”), MSC Mediterranean Shipping Company S.A. (“MSC”), and CMA CGM S.A. (“CMA CGM”) entered into an agreement to establish a network center in the form of a limited liability partnership in England and Wales, which would be responsible for coordinating the operational aspects of the transaction parties’ container liner shipping services on the Asia–Europe, Transatlantic, and Trans-Pacific routes. None of the transaction parties in this case was a Chinese entity, and the subject matter of the agreement was not located in China. On 18 September 2013, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) received the antitrust notification filed by the transaction parties with respect to this concentration of undertakings. On 17 June 2014, MOFCOM published its decision to prohibit the concentration. MOFCOM held that “the establishment of the network center would result in a close-knit alliance among Maersk, MSC, and CMA CGM, which is likely to have the effect of excluding or restricting competition in the market for container liner shipping transport services on the Asia–Europe route,” and accordingly decided to prohibit this concentration of undertakings.
A merger that is entirely closed abroad may still require a filing in China. Under Article 2 of the AML, so long as monopolistic conduct outside China has an exclusionary or restrictive effect on competition in the Chinese domestic market, the AML applies. Whether a transaction requires a filing in China depends not at all on the place of closing or the governing law of the contract, but on whether the transaction constitutes a concentration of undertakings, whether the turnover of the participating undertakings meets the statutory filing thresholds, and whether it has or may have an effect on competition in the domestic market. As noted above, a filing is required if the combined worldwide turnover of all participating undertakings exceeds RMB 12 billion (approximately US$1.778 billion) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million), or if the combined turnover in China of all participating undertakings exceeds RMB 4 billion (approximately US$593 million) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million).
The representative case is NVIDIA Corporation’s acquisition of Mellanox Technologies, Ltd. On 16 April 2020, the SAMR published its announcement on the antitrust review decision to conditionally approve NVIDIA Corporation’s (“NVIDIA”) acquisition of the equity interests of Mellanox Technologies, Ltd. (“Mellanox”), granting conditional approval for this concentration of undertakings. NVIDIA is a U.S. company, and Mellanox is an Israeli company; the post-concentration entity is the legal entity that succeeds to the rights and obligations of NVIDIA and Mellanox upon completion of the transaction. On 9 December 2024, due to NVIDIA’s suspected violation of the Anti-Monopoly Law and the commitments it had made, SAMR announced the initiation of an investigation into NVIDIA . On 15 September 2025, the SAMR, following a preliminary investigation, determined that NVIDIA had committed a violation and decided to proceed with a further investigation. This case marks the first time that the SAMR has initiated an investigation, and subsequently escalated it to a further investigation, into a transaction that had been conditionally approved years earlier, demonstrating China’s heightened post-merger monitoring of remedies imposed in concentrations of undertakings, as well as its strong focus on competition in the semiconductor and AI computing power sectors.
Transactions below the filing thresholds are not necessarily safe. Article 26 (2) of the AML authorizes the enforcement authority to require filing for concentrations that do not meet the filing thresholds but for which there is evidence that they have or may have exclusionary or restrictive effects on competition. Article 4 of the Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings provides that if there is evidence that an overseas concentration has or may have the effect of eliminating or restricting competition in the Chinese domestic market (for example, “killer acquisitions” of start-ups or companies with significant innovation value in high-tech and pharmaceutical industries), China has the authority to issue a written notice requiring the undertakings to file, and the concentration may not be implemented until clearance is obtained.
The representative case is Qualcomm Incorporated’s acquisition of Autotalks Ltd. Qualcomm is a U.S. company, and Autotalks is an Israeli company. In May 2023, Qualcomm announced its acquisition of Autotalks. After receiving a tip-off, the SAMR conducted a comprehensive assessment of the concentration and determined that, although the transaction did not meet the notification threshold, there was evidence that it had or was likely to have the effect of excluding or restricting competition. On March 12, 2024, SAMR notified Qualcomm in writing, requiring it to file a notification. On March 14, 2024, Qualcomm responded in writing, stating that it would abandon the transaction. In June 2025, Qualcomm completed the acquisition of Autotalks without filing a notification or engaging in any communication with SAMR. Upon receiving a tip-off, SAMR verified the facts, and Qualcomm also admitted to the relevant facts. On October 10, 2025, because Qualcomm’s acquisition of Autotalks failed to file a notification for the concentration of undertakings in accordance with the law and was suspected of violating the Anti-Monopoly Law, SAMR announced the initiation of an investigation into Qualcomm [see: https://www.samr.gov.cn/xw/zj/art/2025/art_d1fc65d76fd8491a8f5ab7405c5ed798.html?from=qcc].
Another representative case is Synopsys’s acquisition of Ansys. In January 2024, Synopsys, a global EDA (Electronic Design Automation) software giant, announced its acquisition of Ansys, a leading industrial simulation software company, for approximately US$ 35 billion in a cash-and-stock transaction. The transaction did not meet the notification threshold prescribed by the State Council, but there was evidence that it had or was likely to have the effect of excluding or restricting competition; accordingly, on 11 May 2024, the SAMR issued a written request requiring Synopsys to file a notification for the transaction. The case was filed on 10 July 2024, under the non-simplified procedure. On 5 December 2024, the SAMR accepted the concentration of undertakings for review and initiated a preliminary review. On 3 January 2025, the SAMR decided to proceed with a further review. On 3 April 2025, the further review period was extended. On 15 May 2025, the SAMR issued a decision to suspend the calculation of the review period in this case, and resumed the calculation on 11 July 2025. The SAMR found that the concentration had or was likely to have the effect of excluding or restricting competition in the global and domestic (Chinese) markets for optical software, photonic software, certain EDA software markets, and the semiconductor design IP market. On 14 July 2025, the SAMR published its announcement on the antitrust review decision to conditionally approve Synopsys’s acquisition of Ansys [see: https://www.samr.gov.cn:8200/fldes/tzgg/ftj/art/2025/art_3a7b235d312840b5b19c538a6773af5f.html].
If, upon assessment, an overseas merger does trigger filing obligations, but the target company has very limited connections to China, it may be possible to pursue the “simple case” review procedure. Article 19 of the Provisions on the Review of Concentrations of Undertakings identifies four circumstances in which a case may be filed under the simple case procedure, including “where the participating undertakings acquire equity or assets of an overseas enterprise that does not engage in economic activities within China”. Simple cases are subject to a 10-day public notice period upon acceptance and typically receive significantly faster review and clearance. Typical examples of cases where the simplified procedure was applied include: Corteva, Inc.’s acquisition of equity interests in Corteva BP LLC (2025) [see: https://www.samr.gov.cn/fldes/ajgs/jyaj/art/2025/art_94648cc175e142c99ef5bd43732bea48.html]; Singapore Airlines Limited’s acquisition of equity interests in Air India Limited (2023) [see: https://www.samr.gov.cn/fldes/ajgs/jyaj/art/2023/art_09a064767ae94a409594d78b16d4ebe2.html]; and Abu Dhabi National Oil Company’s acquisition of equity interests in OMV Aktiengesellschaft (2023) [see: https://www.samr.gov.cn/jzxts/ajgs/jzjyajgs/art/2023/art_50f4e730818f41d49594c26a9e6fa705.html].
II. Where Are the Red Lines in the Platform Economy, Pharmaceutical, and Intellectual Property Sectors?
1. Platform Economy
The Antitrust Guidelines on the Platform Economy (2021) [see: https://www.samr.gov.cn:7280/zt/ndzt/2025n/sqxzjcgs/jcbz/art/2025/art_27c2be1ca40b42a9949c12dbd213ba8e.html] are an important supporting instrument of the AML in the platform economy sector. The Alibaba abuse of market dominance case and the Meituan “pick-one-of-the-two” case are landmark cases that have established enforcement precedents in the platform economy sector. In December 2020, the SAMR initiated an investigation pursuant to the AML into Alibaba Group Holding Limited’s (“Alibaba”) abuse of its dominant market position in the domestic online retail platform service market. The investigation found that, since 2015, Alibaba had abused its dominant market position in that market by imposing a “pick-one-of-the-two” requirement on merchants on its platform, prohibiting them from opening stores or participating in promotional activities on other competing platforms. Alibaba enforced this requirement through market power, platform rules, and technical means such as data and algorithms, supplemented by various reward and penalty mechanisms. On 10 April 2021, the SAMR published its penalty decision regarding Alibaba’s monopolistic conduct of implementing “pick-one-of-the-two” restrictions in the domestic online retail platform service market [see: https://www.samr.gov.cn/zt/qhfldzf/art/2021/art_a10f74fa09cd49ee8db7804ba834db2a.html], ordering Alibaba to cease its illegal conduct and imposing a fine of RMB 18.228 billion (approximately US$2.001 billion), equivalent to 4% of Alibaba’s 2019 domestic sales of RMB 455.712 billion (approximately US$67.54 billion).
In April 2021, the SAMR initiated an investigation pursuant to the AML into Meituan’s abuse of its dominant market position in the domestic online food delivery platform service market. The investigation found that, since 2018, Meituan had abused its dominant market position in that market by implementing differentiated commission rates and delaying merchants’ onboarding processes to induce merchants on its platform to sign exclusive cooperation agreements, and had enforced the “pick-one-of-the-two” conduct through various punitive measures, including collecting exclusive cooperation deposits and employing technical means such as data and algorithms. On 11 October 2021, the SAMR published its penalty decision regarding Meituan’s monopolistic conduct of implementing “pick-one-of-the-two” restrictions in the domestic online food delivery platform service market [see: https://www.samr.gov.cn/rzjgs/sjdt/gzdt/art/2021/art_985072e2f9e649dcb850f4230ace0099.html], ordering Meituan to cease its illegal conduct, refund in full the exclusive cooperation deposits of RMB 1.289 billion (approximately US$191 million), and imposing a fine of RMB 3.442 billion (approximately US$510 million), equivalent to 3% of Meituan’s 2020 domestic sales of RMB 114.748 billion (approximately US$17.01 billion).
On 13 February 2026, the SAMR formally issued the Antitrust Compliance Guidelines for Internet Platforms, which builds upon the 2021 Antitrust Guidelines on the Platform Economy to advance from “risk identification” to “compliance system building”. It represents an escalation in antitrust enforcement, systematically enumerating for the first time the following eight scenarios of novel monopoly risks: 1) Algorithmic collusion among platforms – Platforms use algorithms to achieve coordination or concerted practices, constituting a horizontal monopoly agreement.2) Organizing or assisting intra-platform merchants in reaching monopoly agreements – Platforms act as an “axis” to organize or assist merchants operating on the platform in reaching monopoly agreements (hub-and-spoke agreements).3) Unfairly high pricing by platforms – A platform with a dominant market position, without legitimate justification, sells goods or provides services at an unfairly high price.4) Below‑cost sales by platforms – A platform with a dominant market position, without legitimate justification, sells goods at a price below cost (predatory pricing).5) Blocking or shielding – A platform with a dominant market position, without legitimate justification, refuses to deal with counterparties, or imposes blocking or shielding measures against them.6) “Pick‑one‑of‑the‑two” practices – A platform with a dominant market position, without legitimate justification, restricts counterparties to dealing only with the platform itself or with operators designated by the platform.7) “Lowest price across the entire network” – A platform with a dominant market position forces or indirectly forces merchants operating on the platform to sell goods at unreasonably low prices.8) Differential treatment by platforms – A platform with a dominant market position, without legitimate justification, applies differential treatment to counterparties in equivalent transactions (price discrimination based on big data, i.e., “big data killing”).
On 25 July, 2026, SAMR imposed an administrative penalty on Ctrip Group for abuse of dominant market position [see: https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2026/art_064abcdff0144c4e915ee2d261b05235.html], with total disgorgement and fines of RMB 5.179 billion (approximately US$768 million)—consisting of disgorgement of illegal gains of RMB 1.658 billion (approximately US$245 million) and a fine of RMB 3.521 billion (approximately US$522 million), representing 7.5% of Ctrip’s 2025 turnover in China of RMB 46.958 billion (approximately US$6.959 billion). The investigation found that, since 2020, Ctrip had abused its dominant market position in the domestic online hotel booking platform service market (from 2020 to 2025, Ctrip’s market share by both transaction value and revenue in this market exceeded 50%). Centered on its traffic allocation mechanism and leveraging platform rules and technical means, Ctrip engaged in two types of monopolistic conduct: (i) requiring “special-tier” hotels to enter into exclusive cooperation arrangements; and (ii) compelling “gold-tier” and “unrated” hotels to grant “lowest-price-across-all-platforms” commitments. This case is China’s first antitrust case in the online travel sector, the first in the platform economy to simultaneously impose fines, disgorgement of illegal gains, and an order to refund mandatory deposits, and the highest fine percentage in a platform economy antitrust case to date. The case also marked the first use in the platform economy of a “multi-channel evidence collection + automated data analysis + targeted precision assessment” technical evidence-gathering approach.
In the platform economy, the dual-edged nature of data, algorithms, and rules makes them readily susceptible to use as tools to exclude competition. Core red lines in this sector include forced “choose one of two” (restricted dealing), algorithmic collusion or covert coordination (algorithmic monopoly agreements), self-preferencing, and big data price discrimination (price discrimination/differential treatment).
2. Pharmaceuticals
This sector currently has the highest enforcement intensity and the largest amount of disgorgement and fines in China. The conduct of pharmaceutical operators in entering into resale price maintenance and minimum resale price maintenance (i.e., vertical price restraints) with trading counterparties is manifested in three main aspects: the form of agreement, enforcement measures (reward and penalty mechanisms), and price monitoring. In terms of the form of agreement, pharmaceutical operators primarily fix or restrict minimum resale prices through direct means such as written agreements, oral agreements, price adjustment letters, and price maintenance notices, or indirectly by restricting the trading counterparty’s profit margins, discounts, rebates, and handling fees. In terms of enforcement and monitoring mechanisms, operators typically use punitive measures such as deduction of rebates or refusal to supply, or incentive measures such as priority supply or bonus discounts, to covertly force trading counterparties to implement price restrictions, and combine these with audits of sales records and invoices, third-party inspections, or data and algorithms to systematically monitor actual resale prices.
The Antitrust Guidelines on the Pharmaceutical Sector [see: https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfys/art/2025/art_4f615267290d443f9b4e571774ed3d2a.html] took effect on 23 January 2025. The Guidelines refine the rules for determining monopolistic conduct in the pharmaceutical sector, establish for the first time an antitrust analysis framework for reverse payment agreements, and elaborate on the conduct constituting resale price maintenance and minimum resale price maintenance. Article 13 of the Guidelines explicitly regulates reverse payment agreements between originator pharmaceutical companies and generic drug applicants, whereby the originator provides compensation for benefits (exceeding reasonable litigation costs and without legitimate commercial justification) in exchange for the generic applicant’s commitments not to challenge patents, to delay market entry, or to impose geographic restrictions. In determining such cases, the originator bears the burden of proving legitimate justifications, such as genuine litigation settlements or purchases of non-patent assets; otherwise, the agreement is presumed to restrict competition. Agreements found in violation will be deemed acts of unfair competition or monopolistic conduct, subject to remedies including cessation of payments, fines, credit sanctions, and civil litigation. However, if the agreement merely constitutes an ordinary settlement and the generic applicant retains substantive rights to enter the market, and the compensation does not exceed costs, it will not be deemed a violation.
On 15 February 2022, the Supreme People’s Court of China (“SPC”) published its civil ruling regarding AstraZeneca AB v. Jiangsu Aosaikang Pharmaceutical Co., Ltd. [see: https://enipc.court.gov.cn/zh-cn/news/view-1779.html], (2021) SPC IP Civ. Term No. 388. This is the first time that the SPC has conducted an antitrust review of a “pharmaceutical patent reverse payment agreement”. In this case, AstraZeneca acquired from a third party, Bristol-Myers Squibb Company (“BMS”), the relevant patent rights for the diabetes drug saxagliptin tablets. Prior to this, BMS had entered into a Settlement Agreement with generic drug applicant Vcare, stipulating that Vcare would withdraw its invalidation request against the patent-in-suit, and BMS and AstraZeneca as successor-in-interest to the patent rights would undertake not to pursue infringement claims against Vcare and its affiliate Aosaikang for their practice of the patent-in-suit more than five years prior to the expiration of the patent term. Thereafter, Aosaikang practiced the patent-in-suit in accordance with the agreement, and AstraZeneca subsequently filed a patent infringement lawsuit. The court of first instance dismissed AstraZeneca’s claims; AstraZeneca appealed and later applied to withdraw its appeal. In reviewing the withdrawal application, the SPC sua sponte noted that the settlement agreement bore the appearance of a “pharmaceutical patent reverse payment agreement” and established for the first time the antitrust review framework for such agreements: the core inquiry is whether the agreement excludes or restricts competition in the relevant market, with particular focus on the likelihood that the patent would have been invalidated had the generic applicant not withdrawn its invalidation request. Ultimately, because the term of the patent-in-suit had already expired, the court determined that further review was unnecessary and ruled to grant the withdrawal of the appeal. Although the case did not reach a final determination on whether the agreement violated the AML, it provides an important review framework for subsequent similar cases.
Under the Guidelines, given that the pharmaceutical sector involves patient health and the security of medical insurance funds, China has established targeted red lines including reverse payment agreements (pay-for-delay), product hopping, refusal to deal in the API sector, fictitious transactions and multiple layers of mark-ups, and early-stage killer acquisitions.
3. Intellectual Property
The foundational framework in this sector consists of the Antitrust Guidelines on Intellectual Property (2019) [see: https://www.samr.gov.cn/zt/ndzt/2025n/sqxzjcgs/jcbz/art/2025/art_e03595e060d540b2872d8d0e871d7a8e.html] and the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (2023 revision). The Antitrust Guidelines on Standard Essential Patents (2024) is a systematic document specifically addressing SEP antitrust issues, establishing behavioral benchmarks for information disclosure, FRAND licensing commitments, and good-faith negotiations, and making clear that while failure to follow good practices does not necessarily constitute a violation, it increases the risk of a finding of exclusion or restriction of competition; transactions involving SEPs may also trigger merger control review (including below-threshold call-in).
In terms of enforcement, on 27 June 2024, the SAMR, pursuant to the Notice of “Three Documents and One Letter” [see: https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/jzzcxds/art/2023/art_515052484fd94fb1a2d8a648615b4c1c.html], met with the relevant executives of the Avanci patent pool and handed them a “Reminder and Urging Letter” in person [see: https://www.samr.gov.cn/fldys/sjdt/gzdt/art/2024/art_a5607399719f4bea9aab2d3eea03c4d5.html%5Breference:3%5D]. The purpose was to alert Avanci to potential monopoly risks arising from its licensing practices for standard essential patents (SEPs) for automotive wireless communications, and to urge Avanci to conduct a thorough risk self-assessment in accordance with the Anti-Monopoly Law and other applicable laws and regulations, and to take effective measures to prevent and rectify any relevant issues, strengthen its antitrust compliance, and safeguard fair competition in the marketplace
The exercise of intellectual property rights is a statutory right. The “red lines” in this sector lie in using the exercise of rights as a pretext to eliminate or restrict competition, such as: malicious injunctive relief in SEP cases, compulsory exclusive or exclusive grant-backs, no-challenge clauses, forced package licensing or tying, continuing to charge royalties or licensing fees after a patent has expired or been invalidated, and cartel conduct in patent pools.
III. Does a VIE Structure Exempt a Transaction from Filing Obligations? How Do VIE Structures, Data, and National Security Review Interface with Antitrust Review?
A VIE (variable interest entity) structure is a commercial arrangement in which an offshore listed entity does not hold equity directly, but rather exercises material control over the financial and operational affairs of domestic operating entities through a series of contractual arrangements, thereby obtaining control or the ability to exercise decisive influence over such entities.
A VIE structure does not exempt a transaction from filing obligations under China’s AML, nor does it constitute a gray area for regulatory avoidance. Under Article 25 of the AML and its implementing rules, the acquisition of control or decisive influence through contracts equally constitutes a concentration of undertakings. A VIE structure is essentially the exercise of material control over domestic operating entities through a chain of contractual arrangements; therefore, so long as the transaction triggers the turnover-based filing thresholds, it must be filed for merger control review prior to closing.
On 14 December 2020, the SAMR made administrative penalty decisions pursuant to the law with respect to three cases of illegal implementation of concentrations of undertakings without filing a notification in accordance with the law, namely Alibaba Investment’s acquisition of equity interests in Yintai Retail, China Literature’s acquisition of equity interests in New Classics Media, and SF Caina’s acquisition of equity interests in Zhongyou Zhidi [see: https://www.samr.gov.cn/xw/zj/art/2023/art_a93bf313aa8842e89b81dbf461fa085c.html%5Breference:7%5D]. Upon investigation, each of the three cases was found to constitute an illegal implementation of a concentration of undertakings without filing a notification in accordance with the law, but the assessment concluded that the transactions did not have the effect of excluding or restricting competition. Pursuant to Articles 48 and 49 of the Anti-Monopoly Law, SAMR imposed a fine of RMB 500,000 (approximately US$74,100) on each of the three companies involved. All three cases involved Variable Interest Entity (VIE) structures, and this was the first time SAMR imposed administrative penalties on illegally implemented concentrations involving VIE-structured enterprises, making it clear that VIE-structured enterprises are also subject to the notification obligation for concentrations of undertakings when they meet the notification thresholds.
On 4 January 2021, the SAMR initiated a review of the concentration of undertakings filed by Tencent Holdings Limited concerning the merger of HUYA Inc. (“HUYA”) and DouYu International Holdings Limited (“DouYu”). HUYA was incorporated in the Cayman Islands in March 2017 and controls its domestic operating entities through contractual arrangements; DouYu was incorporated in the Cayman Islands in January 2018 and similarly controls its domestic operating entities through contractual arrangements. Both companies are typical VIE-structured enterprises, and both are controlled by Tencent. The SAMR found that this concentration had or was likely to have the effect of excluding or restricting competition in the domestic game live-streaming market and the online game operation service market in China. On 10 July 2021, the SAMR decided in accordance with the law to prohibit this concentration of undertakings [see: https://www.samr.gov.cn/zt/qhfldzf/art/2021/art_586faab0f895474e9f4a7a4aa56a0066.html ]. This case marks the first prohibition of a concentration of undertakings in China’s platform economy sector. More importantly, together with the three earlier cases in December 2020—in which Alibaba Investment’s acquisition of Yintai Retail, China Literature’s acquisition of New Classics Media, and SF Caina’s acquisition of Zhongyou Zhidi were each fined RMB 500,000 (approximately US$74,100) for illegal implementation of concentrations without filing notifications, all involving VIE structures—this case forms a complete enforcement chain: the three penalty cases established the procedural obligation that “VIE-structured enterprises must file notifications when they meet the notification thresholds”, while the HUYA-DouYu prohibition further demonstrates that VIE structures neither exempt entities from the notification obligation nor entitle them to special treatment during substantive review.
On 7 February 2021, the Anti-Monopoly Guidelines for the Platform Economy Sector were formally promulgated, with Article 18 explicitly providing that “concentrations of undertakings involving a Variable Interest Entity (VIE) structure fall within the scope of antitrust review of concentrations of undertakings”. Thereafter, the SAMR has imposed administrative penalties on a number of additional cases involving VIE-structured enterprises for illegally implementing concentrations without prior notification. As legislative clarity and enforcement practice have continued to advance, it has become the norm for transactions involving VIE structures to be filed and accepted for review as concentrations of undertakings through the ordinary procedures. The AML, as amended in 2022, and the Provisions on the Review of Concentrations of Undertakings likewise leave no room for exemption for any particular structural form.
Data elements and algorithmic rules have become a three-dimensional nexus connecting data security review and antitrust review, affecting the viability of digital economy transactions. Under Article 9 of the AML, undertakings shall not use data, algorithms, technology, capital advantages, or platform rules to engage in monopolistic conduct. In merger control review, an undertaking’s “ability to possess and process data” has become a key metric for assessing market control and data barriers, readily triggering “below-threshold call-in”; if a transaction has exclusionary or restrictive effects, the enforcement authority may also impose “data remedies” on data assets in the conditions (such as divestiture of databases, mandatory opening of R&D platforms and data sharing with competitors). In the context of abuse of dominance regulation, “data security protection” may serve as a legitimate justification for exclusive dealing arrangements, but its practical application is subject to rigorous assessment regarding compliance and reasonableness.
National security review and merger control review operate in a “parallel, independent, and sequential” framework in cross-border transactions. Article 38 of the AML provides that where a foreign-invested merger or acquisition of a domestic enterprise, or participation in a concentration of undertakings by other means, involves national security, in addition to undergoing merger control review in accordance with the law, a national security review shall also be conducted in accordance with relevant state regulations. These two reviews are procedurally independent and not substitutable for one another. This means that cross-border mergers and acquisitions involving geopolitically sensitive industries or critical sectors (including transactions conducted through offshore entities or VIE structures) must obtain unconditional clearance or approval in both reviews before closing can proceed. This requires multinational enterprises to incorporate both reviews into their critical timelines at the earliest stage of transaction planning, to avoid transactions being indefinitely delayed or constituting gun-jumping due to procedural coordination failures.
On 27 April 2026, the National Development and Reform Commission (“NDRC”) published its national security review decision regarding the foreign acquisition of the Manus project [see: https://zfxxgk.ndrc.gov.cn/web/iteminfo.jsp?id=20623 ], ordering the rescission of the acquisition transaction. This marks the latest example of an overseas M&A exit pathway facing layered and overlapping regulatory scrutiny, and also represents the first time that China has required the restoration of the status quo ante with respect to a merger between two non-Chinese enterprises. Manus was founded by a Chinese team and gained overnight popularity in March 2025 upon launching the “world’s first general-purpose AI agent”. In June 2025, the company relocated its headquarters to Singapore, significantly downsized its domestic team in China, and ceased its services and operations within China. In December 2025, U.S. tech giant Meta announced its acquisition of Manus for approximately US$ 2 billion, with closing completed by the end of 2025. On 8 January 2026, MOFCOM announced that it would, in conjunction with relevant authorities, conduct an assessment and investigation into the consistency of the acquisition with laws and regulations on export control, technology import and export, and outbound investment. On 27 April 2026, the NDRC issued a prohibition decision, requiring the rescission of the acquisition. The significance of this case lies in the following aspects: First, it fills the case law gap for national security review in the AI sector, making clear that foreign acquisitions in the AI field are subject to national security review. Second, it establishes the “substance-over-form” review standard—even if the transaction parties are registered overseas and the closing takes place overseas, so long as the core technological capabilities originate from within China, the transaction remains subject to Chinese law. Third, it confirms that national security review has retroactive effect, meaning that transactions already closed may also be lawfully rescinded.
In the 2025 event involving the sale of global port assets by Hong Kong’s CK Hutchison Holdings to the U.S. BlackRock consortium, China articulated its regulatory stance on occasions through public statements. The first expression of views was not a direct official announcement, but rather came through the websites of the Hong Kong and Macao Affairs Office of the State Council and the Hong Kong and Macao Work Committee of the Communist Party of China Central Committee, which on 13 and 15 March republished two commentary articles from Hong Kong’s Ta Kung Pao. Subsequently, on 18 March, Hong Kong SAR Chief Executive John Lee responded, putting forward three points: that social concerns should be taken seriously, that coercive tactics in international economic and trade relations are opposed, and that any transaction must comply with laws and regulations. CPPCC National Committee Vice Chairperson Leung Chun-ying also issued a statement emphasizing that “a businessman without a motherland is like a child without parents, vulnerable to bullying”. On 27 April 2025, the SAMR further clarified that “the transaction parties shall not circumvent the review in any manner, and shall not implement the concentration prior to approval; failure to comply will result in legal liability” [see: https://www.samr.gov.cn/xw/zj/art/2025/art_67506eda5edf4f39b704340c0dd4ad35.html]. On 31 July 2025, He Yadong, Spokesperson of MOFCOM, stated at a regular press conference for the first time that “the Chinese government will conduct review and regulation in accordance with the law, protect fair market competition, safeguard the public interest, and resolutely uphold national sovereignty, security, and development interests” [see: https://app.xinhuanet.com/news/article.html?articleId=fabcacbe11eb984c7bd23cf00223ba73]. On 18 December, He Yadong reiterated the above position at a press conference, emphasizing that “the relevant authorities have issued multiple statements on this matter previously” [see: https://finance.cnr.cn/cjkx/20251219/t20251219_527465360.shtml]. From the tone-setting reposts by the Hong Kong and Macao Affairs Office, to the statements by Lee and Leung, and then to the unambiguous positions of “no circumvention” and “law-based review” articulated by the SAMR and MOFCOM, this series of actions clearly delineates the Chinese government’s regulatory stance on this matter: this is no longer a mere commercial transaction, but a major event that must undergo lawful state review and bears upon national sovereignty, security, and development interests.
From an international antitrust practice perspective, the routine penetrative review of VIE structures, and the deep integration of data security, national security, and antitrust review, mark a comprehensive shift in China’s antitrust regulation toward a multidimensional system centered on “substantive control” and “overall national security”. In planning any cross-border or platform-level transaction involving the Chinese market, a “mega-compliance” perspective must be adopted, treating the contractual control chain, the foreclosure effects of data control, and the time costs of overlapping multiple reviews as core strategic variables in transaction structuring.
Conclusion
China’s antitrust law is no longer a static body of rules, but a rapidly iterating dynamic system. The 2022 AML amendments, the 2024 revision of the merger control filing thresholds and the promulgation of the Regulation on Fair Competition Review, the 2026 issuance of the Antitrust Compliance Guidelines for Internet Platforms, and the expansion of delegated merger control review collectively form an increasingly refined regulatory landscape. Enforcement is equally on an upward trajectory: the fine percentage in platform economy monopoly cases has risen from 3% in Meituan and 4% in Alibaba to 7.5% in the 2026 Ctrip case (with total disgorgement and fines of RMB 5.179 billion, approximately US$768 million), and the Ctrip case marked the first application in a platform case of disgorgement of illegal gains and an order to refund mandatory deposits. Although the 2-5 times aggravating provision in Article 63 of the AML has not yet been applied, the expectation that “the statutory range is no longer the real ceiling” has already taken hold.
Against this backdrop, legal advice on China-related business should undergo three transformations: First, antitrust compliance analysis should be brought forward to the earliest stage of transaction structuring, with independent provisions in transaction documents—covering conditions precedent, closing timelines, and risk allocation—for Chinese review (including below-threshold filing possibilities and national security review), rather than being lumped together with generic “other jurisdiction approval” language. Second, compliance obligations should extend to legal representatives and senior management at the individual level; flexible enforcement signals such as letters of reminder and urging and interviews should be taken seriously; and industry guidelines should be treated as the actual benchmarks for enforcement determinations. Third, the functional understanding of antitrust law should be transformed—it is not merely a compliance burden, but a usable tool: administrative monopoly complaints, fair competition review complaints, third-party comments in merger control cases, and antitrust civil claims are all practical pathways to secure favorable competitive conditions for clients.
Anti-Monopoly Law
AML was adopted on 30 August 2007 by the 29th Session of the Standing Committee of the Tenth National People’s Congress (“NPC”) and took effect on 1 August 2008. It was amended for the first time on 24 June 2022 by the 35th Session of the Standing Committee of the Thirteenth NPC, with the amendments taking effect on 1 August 2022.
The AML, as amended in 2022, provides detailed definitions of the three core categories of monopolistic conduct—monopoly agreements, abuse of dominant market position, and concentration of undertakings—and specifically prohibits the use of data, algorithms, or platform rules to exclude or restrict competition. In addition, the AML rigorously constrains abuses of administrative power and requires government agencies to conduct fair competition reviews when formulating policies. The law establishes a penalty framework that includes substantial fines and public credit record disclosures.
The supporting rule system under the Anti-Monopoly Law, comprising administrative regulations, departmental rules, and guidelines, has expanded rapidly in recent years. The key instruments include: 1. The Provisions on the Review of Concentrations of Undertakings (2023) [https://www.gov.cn/zhengce/202305/content_6858355.htm]; 2. The Provisions on Prohibition of Abuse of Dominant Market Position (2023) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2023/art_fd238d3ec1284cb58a2e640255711ff6.html]; 3. The Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (2023) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2023/art_e155397fbe5c4c05ad3c1838c1322ad2.html]; 4. The Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings (2024 Revision) [https://www.gov.cn/zhengce/zhengceku/202401/content_6928388.htm]; 5. The Provisions on Prohibition of Monopoly Agreements (2025 Amendment) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2025/art_b480022de6d1440482d50319118efb66.html]; 6. Regulations on Fair Competition Review (2024) and Implementing Rules for the Regulations on Fair Competition Review (2025) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2025/art_2084c3ba225943c2a670d27e85fb00be.html];7. The Guidelines for Undertakings on Anti-Monopoly Compliance (2024) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/jzzcxds/art/2024/art_2d4b1705febf41c38856dda554e84857.html]; 8. Sector-specific anti-monopoly guidelines for the platform economy, active pharmaceutical ingredients, pharmaceuticals, automobiles, and intellectual property;9. The Antitrust Guidelines on Standard Essential Patents (2024) [https://www.sac.gov.cn/xxgk/zcjd/art/2024/art_7d6f0766331d4b91bd01a7549ef60d01.html];10. The Guidelines on the Review of Horizontal Concentrations of Undertakings (2024) [https://www.gov.cn/zhengce/zhengceku/202412/content_6993767.htm];11. The Guidelines on the Review of Non-Horizontal Concentrations of Undertakings (2025) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfes/art/2025/art_8789118a09884b0788bc8ddc54382019.html ;12. The Specification for Notification of Concentrations of Undertakings (2025) [https://mr.samr.gov.cn/portal/stdDetail/300287]; and13. Antitrust Compliance Guidelines for Internet Platforms (2026) [https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfys/art/2026/art_ad10c5301fcb426cb839153ca9f5a274.html].
I. Monopoly Agreements
Monopoly agreements are agreements, decisions, or other concerted practices that eliminate or restrict competition, and are divided into horizontal monopoly agreements and vertical monopoly agreements. The AML prohibits horizontal monopoly agreements (price fixing, output restrictions, market division, technology restrictions, and joint boycotts) as well as vertical monopoly agreements (resale price maintenance and minimum resale price maintenance).
The 2022 amendments introduced two significant new institutions: the “hub-and-spoke” conspiracy provision and the “safe harbor” rule for vertical monopoly agreements. Article 19 of the AML prohibits organizing other undertakings to enter into monopoly agreements or providing substantial assistance to do so. This provision directly closes off the conduct of the “hub” in hub-and-spoke conspiracies, prohibiting both the central “organization” of agreements and behind-the-scenes “substantial assistance” (such as transmitting competitively sensitive information or providing coordinating algorithms). In the intellectual property context, Article 6(2) of the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition further prohibits “using the exercise of intellectual property rights to organize other undertakings to enter into monopoly agreements or to provide substantial assistance to other undertakings in entering into monopoly agreements.”
The legal basis for the “safe harbor” rule is Article 18(3) of the AML, which provides that an undertaking that “can prove that its market share in the relevant market is below the standard prescribed by the anti-monopoly enforcement authority under the State Council and meets other conditions prescribed by the anti-monopoly enforcement authority under the State Council shall not be prohibited”. Under Article 17 of the Provisions on Prohibition of Monopoly Agreements as amended in 2025, the safe harbor thresholds are bifurcated. For agreements fixing resale prices to third parties and agreements setting minimum resale prices to third parties, both the undertaking and its trading counterparty must, during the term of the agreement, have annual market shares in the relevant market below 5% and annual turnover of the goods covered by the agreement below RMB 100 million (approximately US$14.82 million). For other vertical monopoly agreements as determined by the enforcement authority, the undertaking and its trading counterparty must each have annual market shares in the relevant market below 15%.
II. Abuse of Dominant Market Position
A dominant market position means a market position in which an undertaking is able to control the prices, quantities, or other trading conditions of goods, or is able to impede or affect the ability of other undertakings to enter the relevant market. The elements of an abuse of dominant market position generally include: the undertaking holds a dominant position in the relevant market; it has implemented abusive conduct that excludes or restricts competition; and such conduct lacks legitimate justifications. The prohibited forms of abuse expressly identified include unfair pricing, predatory pricing, refusal to deal, restricted dealing, tying or imposition of unreasonable trading conditions, and discriminatory treatment.
Article 23 of the AML identifies the factors to be considered in determining whether an undertaking holds a dominant position, including: the undertaking’s market share and the state of competition in the relevant market; the undertaking’s ability to control the upstream or downstream markets for sales or raw material procurement; the undertaking’s financial and technological resources (such as asset scale, R&D capabilities, and intellectual property); the degree of dependence of other undertakings on the undertaking in transactions; and the difficulty for other undertakings to enter the relevant market (technological barriers, user switching costs, etc.).
Article 24 further provides that an undertaking may be presumed to hold a dominant market position if it meets the following market share thresholds:1. A single undertaking: its market share in the relevant market reaches one-half (50%).2. Two undertakings: their combined market share reaches two-thirds (approximately 66.7%).3. Three undertakings: their combined market share reaches three-quarters (75%).
In response to the digital economy and high-tech competition, the 2022 AML introduced, for the first time in the General Provisions and the chapter on abuse of dominant market position, provisions targeting novel digital monopolistic means such as “data, algorithms, and platform rules”, strictly prohibiting undertakings from using data and algorithms, technology, and platform rules to implement unfair high pricing, refusal to deal, self-preferencing, or “choose one of two” restricted dealing arrangements. Under the Provisions on Prohibition of Abuse of Dominant Market Position and the Guidelines on the Review of Non-Horizontal Concentrations of Undertakings, when determining dominance on a platform, additional factors are considered, including network effects, lock-in effects, lock-in barriers, the ability to control traffic, and the ability to possess and process relevant data.
In the area of standard essential patents (SEPs) and patent pools, Article 17 of the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition prohibits patent pool entities from using the pool to restrict members from granting independent licenses outside the pool, or from forcing the combined licensing of competing patents, non-essential patents, or patents that have expired. Where the SEP holder has a dominant market position and the relevant conduct has the effect of eliminating or restricting competition, such conduct may be found to constitute an abuse of dominant market position. Under the Antitrust Guidelines on Standard Essential Patents, an SEP holder that violates its fair, reasonable, and non-discriminatory (FRAND) commitment by abusing remedies such as seeking injunctive relief without first engaging in good-faith negotiations, thereby forcing the licensee to accept unfairly high prices or unreasonable terms, will be deemed to have abused its dominant market position.
III. Concentration of Undertakings
Concentration of undertakings includes mergers of undertakings, acquisition of control over other undertakings through the acquisition of equity or assets, and acquisition of control over other undertakings or the ability to exercise decisive influence over other undertakings through contracts or other means. China operates a mandatory prior notification system for concentrations of undertakings, meaning that transactions meeting the filing thresholds may not be “gun-jumped” or implemented prior to clearance. Under the Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings effective January 2024, a concentration must be filed if the combined worldwide turnover of all participating undertakings exceeds RMB 12 billion (approximately US$1.778 billion) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million), or if the combined turnover in China of all participating undertakings exceeds RMB 4 billion (approximately US$593 million) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million). Even if a transaction does not meet these thresholds, if there is evidence that it has or may have the effect of eliminating or restricting competition, the enforcement authority still has the power to require the undertakings to file and initiate an investigation.
In conducting substantive review, cases are assessed primarily by distinguishing between horizontal concentrations (mergers of competitors) and non-horizontal concentrations (vertical or conglomerate mergers). The core of the assessment is whether the transaction would produce unilateral or coordinated effects that harm competition. Generally, in horizontal concentrations or upstream/downstream/related markets, if the participating undertakings’ combined market share in the relevant market exceeds 50%, the enforcement authority will directly presume an exclusionary or restrictive effect on competition; whereas in horizontal concentrations with a share below 15%, or non-horizontal concentrations where shares are all below 25%, the transaction typically enjoys a safe harbor presumption of no competitive harm.
Upon conclusion of the review, the enforcement authority will issue a decision of unconditional approval, prohibition, or conditional approval (imposing structural remedies such as asset divestitures, or behavioral remedies such as key technology licensing or maintaining independent operations to mitigate competitive risks).
Effective 1 August 2025, the State Administration for Market Regulation (“SAMR”) formally delegated review of certain simple-case concentrations of undertakings to five provincial-level market regulatory authorities: Beijing, Shanghai, Guangdong, Chongqing, and Shaanxi. In 2026, the system was further refined: certain non-simple cases were added to the delegated review scope (such as cases where the combined relevant market share falls between 15% and 25%), and Liaoning, Zhejiang, and Sichuan were added as delegated provincial-level authorities for simple cases, effective 1 August 2026.
Undertakings that gun-jump in violation of the prior notification requirement face severe legal consequences: if the transaction is determined to have exclusionary or restrictive effects on competition, a fine of up to 10% of the undertaking’s turnover from the preceding fiscal year may be imposed, and the undertaking may be ordered to divest shares or assets within a specified period to restore the pre-concentration state; even if no restrictive effect on competition is found, a fine of up to RMB 5 million (approximately US$741,000) may still be imposed, and in cases of particularly serious circumstances, the fine may be multiplied by two to five times.
On 27 May 2026, the SAMR published its administrative penalty decision regarding the illegal implementation of a concentration of undertakings in connection with Luxshare Precision Industry Co., Ltd.’s (“Luxshare”) acquisition of certain businesses of Wingtech Technology Co., Ltd. (“Wingtech”). Luxshare completed the acquisition of Wingtech’s said businesses without having filed a notification in accordance with the law, but voluntarily reported the illegal facts to the SAMR. Upon assessment, the transaction was found not to have the effect of excluding or restricting competition. Taking into account Luxshare’s voluntary reporting, cooperation with the investigation, and enhancement of its compliance management system, the SAMR imposed a fine of RMB 900,000 (approximately US$133,400). This case sends an important enforcement signal: voluntary reporting combined with robust compliance building may result in a significant mitigation of penalties.
Frequently Asked Questions on China’s Competition Law
I. Does China’s Anti-Monopoly Law Apply to Overseas Transactions? Does a Merger That Is Entirely Closed Abroad Require a Filing in China? Is a Transaction Below the Filing Thresholds Truly Safe?
China’s competition law applies to overseas transactions. Article 2 of the AML expressly provides: “This Law is applicable to monopolistic practices in economic activities within the territory of the People’s Republic of China, and it is applicable to monopolistic practices outside the territory of the People’s Republic of China which eliminate or restrict competition in the domestic market of China”. This provision establishes the extraterritorial application (effects doctrine) of the AML—that is, even if monopolistic conduct occurs entirely outside China, it is subject to the AML if it has an exclusionary or restrictive effect on competition in the domestic market.
The 2014 case concerning the proposed establishment of a new platform by three major shipping companies is an early and representative case. In October 2013, A.P. Møller - Maersk A/S (“Maersk”), MSC Mediterranean Shipping Company S.A. (“MSC”), and CMA CGM S.A. (“CMA CGM”) entered into an agreement to establish a network center in the form of a limited liability partnership in England and Wales, which would be responsible for coordinating the operational aspects of the transaction parties’ container liner shipping services on the Asia–Europe, Transatlantic, and Trans-Pacific routes. None of the transaction parties in this case was a Chinese entity, and the subject matter of the agreement was not located in China. On 18 September 2013, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) received the antitrust notification filed by the transaction parties with respect to this concentration of undertakings. On 17 June 2014, MOFCOM published its decision to prohibit the concentration. MOFCOM held that “the establishment of the network center would result in a close-knit alliance among Maersk, MSC, and CMA CGM, which is likely to have the effect of excluding or restricting competition in the market for container liner shipping transport services on the Asia–Europe route,” and accordingly decided to prohibit this concentration of undertakings.
A merger that is entirely closed abroad may still require a filing in China. Under Article 2 of the AML, so long as monopolistic conduct outside China has an exclusionary or restrictive effect on competition in the Chinese domestic market, the AML applies. Whether a transaction requires a filing in China depends not at all on the place of closing or the governing law of the contract, but on whether the transaction constitutes a concentration of undertakings, whether the turnover of the participating undertakings meets the statutory filing thresholds, and whether it has or may have an effect on competition in the domestic market. As noted above, a filing is required if the combined worldwide turnover of all participating undertakings exceeds RMB 12 billion (approximately US$1.778 billion) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million), or if the combined turnover in China of all participating undertakings exceeds RMB 4 billion (approximately US$593 million) (with at least two undertakings each having turnover in China exceeding RMB 800 million, approximately US$119 million).
The representative case is NVIDIA Corporation’s acquisition of Mellanox Technologies, Ltd. On 16 April 2020, the SAMR published its announcement on the antitrust review decision to conditionally approve NVIDIA Corporation’s (“NVIDIA”) acquisition of the equity interests of Mellanox Technologies, Ltd. (“Mellanox”), granting conditional approval for this concentration of undertakings. NVIDIA is a U.S. company, and Mellanox is an Israeli company; the post-concentration entity is the legal entity that succeeds to the rights and obligations of NVIDIA and Mellanox upon completion of the transaction. On 9 December 2024, due to NVIDIA’s suspected violation of the Anti-Monopoly Law and the commitments it had made, SAMR announced the initiation of an investigation into NVIDIA . On 15 September 2025, the SAMR, following a preliminary investigation, determined that NVIDIA had committed a violation and decided to proceed with a further investigation. This case marks the first time that the SAMR has initiated an investigation, and subsequently escalated it to a further investigation, into a transaction that had been conditionally approved years earlier, demonstrating China’s heightened post-merger monitoring of remedies imposed in concentrations of undertakings, as well as its strong focus on competition in the semiconductor and AI computing power sectors.
Transactions below the filing thresholds are not necessarily safe. Article 26 (2) of the AML authorizes the enforcement authority to require filing for concentrations that do not meet the filing thresholds but for which there is evidence that they have or may have exclusionary or restrictive effects on competition. Article 4 of the Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings provides that if there is evidence that an overseas concentration has or may have the effect of eliminating or restricting competition in the Chinese domestic market (for example, “killer acquisitions” of start-ups or companies with significant innovation value in high-tech and pharmaceutical industries), China has the authority to issue a written notice requiring the undertakings to file, and the concentration may not be implemented until clearance is obtained.
The representative case is Qualcomm Incorporated’s acquisition of Autotalks Ltd. Qualcomm is a U.S. company, and Autotalks is an Israeli company. In May 2023, Qualcomm announced its acquisition of Autotalks. After receiving a tip-off, the SAMR conducted a comprehensive assessment of the concentration and determined that, although the transaction did not meet the notification threshold, there was evidence that it had or was likely to have the effect of excluding or restricting competition. On March 12, 2024, SAMR notified Qualcomm in writing, requiring it to file a notification. On March 14, 2024, Qualcomm responded in writing, stating that it would abandon the transaction. In June 2025, Qualcomm completed the acquisition of Autotalks without filing a notification or engaging in any communication with SAMR. Upon receiving a tip-off, SAMR verified the facts, and Qualcomm also admitted to the relevant facts. On October 10, 2025, because Qualcomm’s acquisition of Autotalks failed to file a notification for the concentration of undertakings in accordance with the law and was suspected of violating the Anti-Monopoly Law, SAMR announced the initiation of an investigation into Qualcomm [see: https://www.samr.gov.cn/xw/zj/art/2025/art_d1fc65d76fd8491a8f5ab7405c5ed798.html?from=qcc].
Another representative case is Synopsys’s acquisition of Ansys. In January 2024, Synopsys, a global EDA (Electronic Design Automation) software giant, announced its acquisition of Ansys, a leading industrial simulation software company, for approximately US$ 35 billion in a cash-and-stock transaction. The transaction did not meet the notification threshold prescribed by the State Council, but there was evidence that it had or was likely to have the effect of excluding or restricting competition; accordingly, on 11 May 2024, the SAMR issued a written request requiring Synopsys to file a notification for the transaction. The case was filed on 10 July 2024, under the non-simplified procedure. On 5 December 2024, the SAMR accepted the concentration of undertakings for review and initiated a preliminary review. On 3 January 2025, the SAMR decided to proceed with a further review. On 3 April 2025, the further review period was extended. On 15 May 2025, the SAMR issued a decision to suspend the calculation of the review period in this case, and resumed the calculation on 11 July 2025. The SAMR found that the concentration had or was likely to have the effect of excluding or restricting competition in the global and domestic (Chinese) markets for optical software, photonic software, certain EDA software markets, and the semiconductor design IP market. On 14 July 2025, the SAMR published its announcement on the antitrust review decision to conditionally approve Synopsys’s acquisition of Ansys [see: https://www.samr.gov.cn:8200/fldes/tzgg/ftj/art/2025/art_3a7b235d312840b5b19c538a6773af5f.html].
If, upon assessment, an overseas merger does trigger filing obligations, but the target company has very limited connections to China, it may be possible to pursue the “simple case” review procedure. Article 19 of the Provisions on the Review of Concentrations of Undertakings identifies four circumstances in which a case may be filed under the simple case procedure, including “where the participating undertakings acquire equity or assets of an overseas enterprise that does not engage in economic activities within China”. Simple cases are subject to a 10-day public notice period upon acceptance and typically receive significantly faster review and clearance. Typical examples of cases where the simplified procedure was applied include: Corteva, Inc.’s acquisition of equity interests in Corteva BP LLC (2025) [see: https://www.samr.gov.cn/fldes/ajgs/jyaj/art/2025/art_94648cc175e142c99ef5bd43732bea48.html]; Singapore Airlines Limited’s acquisition of equity interests in Air India Limited (2023) [see: https://www.samr.gov.cn/fldes/ajgs/jyaj/art/2023/art_09a064767ae94a409594d78b16d4ebe2.html]; and Abu Dhabi National Oil Company’s acquisition of equity interests in OMV Aktiengesellschaft (2023) [see: https://www.samr.gov.cn/jzxts/ajgs/jzjyajgs/art/2023/art_50f4e730818f41d49594c26a9e6fa705.html].
II. Where Are the Red Lines in the Platform Economy, Pharmaceutical, and Intellectual Property Sectors?
1. Platform Economy
The Antitrust Guidelines on the Platform Economy (2021) [see: https://www.samr.gov.cn:7280/zt/ndzt/2025n/sqxzjcgs/jcbz/art/2025/art_27c2be1ca40b42a9949c12dbd213ba8e.html] are an important supporting instrument of the AML in the platform economy sector. The Alibaba abuse of market dominance case and the Meituan “pick-one-of-the-two” case are landmark cases that have established enforcement precedents in the platform economy sector. In December 2020, the SAMR initiated an investigation pursuant to the AML into Alibaba Group Holding Limited’s (“Alibaba”) abuse of its dominant market position in the domestic online retail platform service market. The investigation found that, since 2015, Alibaba had abused its dominant market position in that market by imposing a “pick-one-of-the-two” requirement on merchants on its platform, prohibiting them from opening stores or participating in promotional activities on other competing platforms. Alibaba enforced this requirement through market power, platform rules, and technical means such as data and algorithms, supplemented by various reward and penalty mechanisms. On 10 April 2021, the SAMR published its penalty decision regarding Alibaba’s monopolistic conduct of implementing “pick-one-of-the-two” restrictions in the domestic online retail platform service market [see: https://www.samr.gov.cn/zt/qhfldzf/art/2021/art_a10f74fa09cd49ee8db7804ba834db2a.html], ordering Alibaba to cease its illegal conduct and imposing a fine of RMB 18.228 billion (approximately US$2.001 billion), equivalent to 4% of Alibaba’s 2019 domestic sales of RMB 455.712 billion (approximately US$67.54 billion).
In April 2021, the SAMR initiated an investigation pursuant to the AML into Meituan’s abuse of its dominant market position in the domestic online food delivery platform service market. The investigation found that, since 2018, Meituan had abused its dominant market position in that market by implementing differentiated commission rates and delaying merchants’ onboarding processes to induce merchants on its platform to sign exclusive cooperation agreements, and had enforced the “pick-one-of-the-two” conduct through various punitive measures, including collecting exclusive cooperation deposits and employing technical means such as data and algorithms. On 11 October 2021, the SAMR published its penalty decision regarding Meituan’s monopolistic conduct of implementing “pick-one-of-the-two” restrictions in the domestic online food delivery platform service market [see: https://www.samr.gov.cn/rzjgs/sjdt/gzdt/art/2021/art_985072e2f9e649dcb850f4230ace0099.html], ordering Meituan to cease its illegal conduct, refund in full the exclusive cooperation deposits of RMB 1.289 billion (approximately US$191 million), and imposing a fine of RMB 3.442 billion (approximately US$510 million), equivalent to 3% of Meituan’s 2020 domestic sales of RMB 114.748 billion (approximately US$17.01 billion).
On 13 February 2026, the SAMR formally issued the Antitrust Compliance Guidelines for Internet Platforms, which builds upon the 2021 Antitrust Guidelines on the Platform Economy to advance from “risk identification” to “compliance system building”. It represents an escalation in antitrust enforcement, systematically enumerating for the first time the following eight scenarios of novel monopoly risks: 1) Algorithmic collusion among platforms – Platforms use algorithms to achieve coordination or concerted practices, constituting a horizontal monopoly agreement.2) Organizing or assisting intra-platform merchants in reaching monopoly agreements – Platforms act as an “axis” to organize or assist merchants operating on the platform in reaching monopoly agreements (hub-and-spoke agreements).3) Unfairly high pricing by platforms – A platform with a dominant market position, without legitimate justification, sells goods or provides services at an unfairly high price.4) Below‑cost sales by platforms – A platform with a dominant market position, without legitimate justification, sells goods at a price below cost (predatory pricing).5) Blocking or shielding – A platform with a dominant market position, without legitimate justification, refuses to deal with counterparties, or imposes blocking or shielding measures against them.6) “Pick‑one‑of‑the‑two” practices – A platform with a dominant market position, without legitimate justification, restricts counterparties to dealing only with the platform itself or with operators designated by the platform.7) “Lowest price across the entire network” – A platform with a dominant market position forces or indirectly forces merchants operating on the platform to sell goods at unreasonably low prices.8) Differential treatment by platforms – A platform with a dominant market position, without legitimate justification, applies differential treatment to counterparties in equivalent transactions (price discrimination based on big data, i.e., “big data killing”).
On 25 July, 2026, SAMR imposed an administrative penalty on Ctrip Group for abuse of dominant market position [see: https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2026/art_064abcdff0144c4e915ee2d261b05235.html], with total disgorgement and fines of RMB 5.179 billion (approximately US$768 million)—consisting of disgorgement of illegal gains of RMB 1.658 billion (approximately US$245 million) and a fine of RMB 3.521 billion (approximately US$522 million), representing 7.5% of Ctrip’s 2025 turnover in China of RMB 46.958 billion (approximately US$6.959 billion). The investigation found that, since 2020, Ctrip had abused its dominant market position in the domestic online hotel booking platform service market (from 2020 to 2025, Ctrip’s market share by both transaction value and revenue in this market exceeded 50%). Centered on its traffic allocation mechanism and leveraging platform rules and technical means, Ctrip engaged in two types of monopolistic conduct: (i) requiring “special-tier” hotels to enter into exclusive cooperation arrangements; and (ii) compelling “gold-tier” and “unrated” hotels to grant “lowest-price-across-all-platforms” commitments. This case is China’s first antitrust case in the online travel sector, the first in the platform economy to simultaneously impose fines, disgorgement of illegal gains, and an order to refund mandatory deposits, and the highest fine percentage in a platform economy antitrust case to date. The case also marked the first use in the platform economy of a “multi-channel evidence collection + automated data analysis + targeted precision assessment” technical evidence-gathering approach.
In the platform economy, the dual-edged nature of data, algorithms, and rules makes them readily susceptible to use as tools to exclude competition. Core red lines in this sector include forced “choose one of two” (restricted dealing), algorithmic collusion or covert coordination (algorithmic monopoly agreements), self-preferencing, and big data price discrimination (price discrimination/differential treatment).
2. Pharmaceuticals
This sector currently has the highest enforcement intensity and the largest amount of disgorgement and fines in China. The conduct of pharmaceutical operators in entering into resale price maintenance and minimum resale price maintenance (i.e., vertical price restraints) with trading counterparties is manifested in three main aspects: the form of agreement, enforcement measures (reward and penalty mechanisms), and price monitoring. In terms of the form of agreement, pharmaceutical operators primarily fix or restrict minimum resale prices through direct means such as written agreements, oral agreements, price adjustment letters, and price maintenance notices, or indirectly by restricting the trading counterparty’s profit margins, discounts, rebates, and handling fees. In terms of enforcement and monitoring mechanisms, operators typically use punitive measures such as deduction of rebates or refusal to supply, or incentive measures such as priority supply or bonus discounts, to covertly force trading counterparties to implement price restrictions, and combine these with audits of sales records and invoices, third-party inspections, or data and algorithms to systematically monitor actual resale prices.
The Antitrust Guidelines on the Pharmaceutical Sector [see: https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfys/art/2025/art_4f615267290d443f9b4e571774ed3d2a.html] took effect on 23 January 2025. The Guidelines refine the rules for determining monopolistic conduct in the pharmaceutical sector, establish for the first time an antitrust analysis framework for reverse payment agreements, and elaborate on the conduct constituting resale price maintenance and minimum resale price maintenance. Article 13 of the Guidelines explicitly regulates reverse payment agreements between originator pharmaceutical companies and generic drug applicants, whereby the originator provides compensation for benefits (exceeding reasonable litigation costs and without legitimate commercial justification) in exchange for the generic applicant’s commitments not to challenge patents, to delay market entry, or to impose geographic restrictions. In determining such cases, the originator bears the burden of proving legitimate justifications, such as genuine litigation settlements or purchases of non-patent assets; otherwise, the agreement is presumed to restrict competition. Agreements found in violation will be deemed acts of unfair competition or monopolistic conduct, subject to remedies including cessation of payments, fines, credit sanctions, and civil litigation. However, if the agreement merely constitutes an ordinary settlement and the generic applicant retains substantive rights to enter the market, and the compensation does not exceed costs, it will not be deemed a violation.
On 15 February 2022, the Supreme People’s Court of China (“SPC”) published its civil ruling regarding AstraZeneca AB v. Jiangsu Aosaikang Pharmaceutical Co., Ltd. [see: https://enipc.court.gov.cn/zh-cn/news/view-1779.html], (2021) SPC IP Civ. Term No. 388. This is the first time that the SPC has conducted an antitrust review of a “pharmaceutical patent reverse payment agreement”. In this case, AstraZeneca acquired from a third party, Bristol-Myers Squibb Company (“BMS”), the relevant patent rights for the diabetes drug saxagliptin tablets. Prior to this, BMS had entered into a Settlement Agreement with generic drug applicant Vcare, stipulating that Vcare would withdraw its invalidation request against the patent-in-suit, and BMS and AstraZeneca as successor-in-interest to the patent rights would undertake not to pursue infringement claims against Vcare and its affiliate Aosaikang for their practice of the patent-in-suit more than five years prior to the expiration of the patent term. Thereafter, Aosaikang practiced the patent-in-suit in accordance with the agreement, and AstraZeneca subsequently filed a patent infringement lawsuit. The court of first instance dismissed AstraZeneca’s claims; AstraZeneca appealed and later applied to withdraw its appeal. In reviewing the withdrawal application, the SPC sua sponte noted that the settlement agreement bore the appearance of a “pharmaceutical patent reverse payment agreement” and established for the first time the antitrust review framework for such agreements: the core inquiry is whether the agreement excludes or restricts competition in the relevant market, with particular focus on the likelihood that the patent would have been invalidated had the generic applicant not withdrawn its invalidation request. Ultimately, because the term of the patent-in-suit had already expired, the court determined that further review was unnecessary and ruled to grant the withdrawal of the appeal. Although the case did not reach a final determination on whether the agreement violated the AML, it provides an important review framework for subsequent similar cases.
Under the Guidelines, given that the pharmaceutical sector involves patient health and the security of medical insurance funds, China has established targeted red lines including reverse payment agreements (pay-for-delay), product hopping, refusal to deal in the API sector, fictitious transactions and multiple layers of mark-ups, and early-stage killer acquisitions.
3. Intellectual Property
The foundational framework in this sector consists of the Antitrust Guidelines on Intellectual Property (2019) [see: https://www.samr.gov.cn/zt/ndzt/2025n/sqxzjcgs/jcbz/art/2025/art_e03595e060d540b2872d8d0e871d7a8e.html] and the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (2023 revision). The Antitrust Guidelines on Standard Essential Patents (2024) is a systematic document specifically addressing SEP antitrust issues, establishing behavioral benchmarks for information disclosure, FRAND licensing commitments, and good-faith negotiations, and making clear that while failure to follow good practices does not necessarily constitute a violation, it increases the risk of a finding of exclusion or restriction of competition; transactions involving SEPs may also trigger merger control review (including below-threshold call-in).
In terms of enforcement, on 27 June 2024, the SAMR, pursuant to the Notice of “Three Documents and One Letter” [see: https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/jzzcxds/art/2023/art_515052484fd94fb1a2d8a648615b4c1c.html], met with the relevant executives of the Avanci patent pool and handed them a “Reminder and Urging Letter” in person [see: https://www.samr.gov.cn/fldys/sjdt/gzdt/art/2024/art_a5607399719f4bea9aab2d3eea03c4d5.html%5Breference:3%5D]. The purpose was to alert Avanci to potential monopoly risks arising from its licensing practices for standard essential patents (SEPs) for automotive wireless communications, and to urge Avanci to conduct a thorough risk self-assessment in accordance with the Anti-Monopoly Law and other applicable laws and regulations, and to take effective measures to prevent and rectify any relevant issues, strengthen its antitrust compliance, and safeguard fair competition in the marketplace
The exercise of intellectual property rights is a statutory right. The “red lines” in this sector lie in using the exercise of rights as a pretext to eliminate or restrict competition, such as: malicious injunctive relief in SEP cases, compulsory exclusive or exclusive grant-backs, no-challenge clauses, forced package licensing or tying, continuing to charge royalties or licensing fees after a patent has expired or been invalidated, and cartel conduct in patent pools.
III. Does a VIE Structure Exempt a Transaction from Filing Obligations? How Do VIE Structures, Data, and National Security Review Interface with Antitrust Review?
A VIE (variable interest entity) structure is a commercial arrangement in which an offshore listed entity does not hold equity directly, but rather exercises material control over the financial and operational affairs of domestic operating entities through a series of contractual arrangements, thereby obtaining control or the ability to exercise decisive influence over such entities.
A VIE structure does not exempt a transaction from filing obligations under China’s AML, nor does it constitute a gray area for regulatory avoidance. Under Article 25 of the AML and its implementing rules, the acquisition of control or decisive influence through contracts equally constitutes a concentration of undertakings. A VIE structure is essentially the exercise of material control over domestic operating entities through a chain of contractual arrangements; therefore, so long as the transaction triggers the turnover-based filing thresholds, it must be filed for merger control review prior to closing.
On 14 December 2020, the SAMR made administrative penalty decisions pursuant to the law with respect to three cases of illegal implementation of concentrations of undertakings without filing a notification in accordance with the law, namely Alibaba Investment’s acquisition of equity interests in Yintai Retail, China Literature’s acquisition of equity interests in New Classics Media, and SF Caina’s acquisition of equity interests in Zhongyou Zhidi [see: https://www.samr.gov.cn/xw/zj/art/2023/art_a93bf313aa8842e89b81dbf461fa085c.html%5Breference:7%5D]. Upon investigation, each of the three cases was found to constitute an illegal implementation of a concentration of undertakings without filing a notification in accordance with the law, but the assessment concluded that the transactions did not have the effect of excluding or restricting competition. Pursuant to Articles 48 and 49 of the Anti-Monopoly Law, SAMR imposed a fine of RMB 500,000 (approximately US$74,100) on each of the three companies involved. All three cases involved Variable Interest Entity (VIE) structures, and this was the first time SAMR imposed administrative penalties on illegally implemented concentrations involving VIE-structured enterprises, making it clear that VIE-structured enterprises are also subject to the notification obligation for concentrations of undertakings when they meet the notification thresholds.
On 4 January 2021, the SAMR initiated a review of the concentration of undertakings filed by Tencent Holdings Limited concerning the merger of HUYA Inc. (“HUYA”) and DouYu International Holdings Limited (“DouYu”). HUYA was incorporated in the Cayman Islands in March 2017 and controls its domestic operating entities through contractual arrangements; DouYu was incorporated in the Cayman Islands in January 2018 and similarly controls its domestic operating entities through contractual arrangements. Both companies are typical VIE-structured enterprises, and both are controlled by Tencent. The SAMR found that this concentration had or was likely to have the effect of excluding or restricting competition in the domestic game live-streaming market and the online game operation service market in China. On 10 July 2021, the SAMR decided in accordance with the law to prohibit this concentration of undertakings [see: https://www.samr.gov.cn/zt/qhfldzf/art/2021/art_586faab0f895474e9f4a7a4aa56a0066.html ]. This case marks the first prohibition of a concentration of undertakings in China’s platform economy sector. More importantly, together with the three earlier cases in December 2020—in which Alibaba Investment’s acquisition of Yintai Retail, China Literature’s acquisition of New Classics Media, and SF Caina’s acquisition of Zhongyou Zhidi were each fined RMB 500,000 (approximately US$74,100) for illegal implementation of concentrations without filing notifications, all involving VIE structures—this case forms a complete enforcement chain: the three penalty cases established the procedural obligation that “VIE-structured enterprises must file notifications when they meet the notification thresholds”, while the HUYA-DouYu prohibition further demonstrates that VIE structures neither exempt entities from the notification obligation nor entitle them to special treatment during substantive review.
On 7 February 2021, the Anti-Monopoly Guidelines for the Platform Economy Sector were formally promulgated, with Article 18 explicitly providing that “concentrations of undertakings involving a Variable Interest Entity (VIE) structure fall within the scope of antitrust review of concentrations of undertakings”. Thereafter, the SAMR has imposed administrative penalties on a number of additional cases involving VIE-structured enterprises for illegally implementing concentrations without prior notification. As legislative clarity and enforcement practice have continued to advance, it has become the norm for transactions involving VIE structures to be filed and accepted for review as concentrations of undertakings through the ordinary procedures. The AML, as amended in 2022, and the Provisions on the Review of Concentrations of Undertakings likewise leave no room for exemption for any particular structural form.
Data elements and algorithmic rules have become a three-dimensional nexus connecting data security review and antitrust review, affecting the viability of digital economy transactions. Under Article 9 of the AML, undertakings shall not use data, algorithms, technology, capital advantages, or platform rules to engage in monopolistic conduct. In merger control review, an undertaking’s “ability to possess and process data” has become a key metric for assessing market control and data barriers, readily triggering “below-threshold call-in”; if a transaction has exclusionary or restrictive effects, the enforcement authority may also impose “data remedies” on data assets in the conditions (such as divestiture of databases, mandatory opening of R&D platforms and data sharing with competitors). In the context of abuse of dominance regulation, “data security protection” may serve as a legitimate justification for exclusive dealing arrangements, but its practical application is subject to rigorous assessment regarding compliance and reasonableness.
National security review and merger control review operate in a “parallel, independent, and sequential” framework in cross-border transactions. Article 38 of the AML provides that where a foreign-invested merger or acquisition of a domestic enterprise, or participation in a concentration of undertakings by other means, involves national security, in addition to undergoing merger control review in accordance with the law, a national security review shall also be conducted in accordance with relevant state regulations. These two reviews are procedurally independent and not substitutable for one another. This means that cross-border mergers and acquisitions involving geopolitically sensitive industries or critical sectors (including transactions conducted through offshore entities or VIE structures) must obtain unconditional clearance or approval in both reviews before closing can proceed. This requires multinational enterprises to incorporate both reviews into their critical timelines at the earliest stage of transaction planning, to avoid transactions being indefinitely delayed or constituting gun-jumping due to procedural coordination failures.
On 27 April 2026, the National Development and Reform Commission (“NDRC”) published its national security review decision regarding the foreign acquisition of the Manus project [see: https://zfxxgk.ndrc.gov.cn/web/iteminfo.jsp?id=20623 ], ordering the rescission of the acquisition transaction. This marks the latest example of an overseas M&A exit pathway facing layered and overlapping regulatory scrutiny, and also represents the first time that China has required the restoration of the status quo ante with respect to a merger between two non-Chinese enterprises. Manus was founded by a Chinese team and gained overnight popularity in March 2025 upon launching the “world’s first general-purpose AI agent”. In June 2025, the company relocated its headquarters to Singapore, significantly downsized its domestic team in China, and ceased its services and operations within China. In December 2025, U.S. tech giant Meta announced its acquisition of Manus for approximately US$ 2 billion, with closing completed by the end of 2025. On 8 January 2026, MOFCOM announced that it would, in conjunction with relevant authorities, conduct an assessment and investigation into the consistency of the acquisition with laws and regulations on export control, technology import and export, and outbound investment. On 27 April 2026, the NDRC issued a prohibition decision, requiring the rescission of the acquisition. The significance of this case lies in the following aspects: First, it fills the case law gap for national security review in the AI sector, making clear that foreign acquisitions in the AI field are subject to national security review. Second, it establishes the “substance-over-form” review standard—even if the transaction parties are registered overseas and the closing takes place overseas, so long as the core technological capabilities originate from within China, the transaction remains subject to Chinese law. Third, it confirms that national security review has retroactive effect, meaning that transactions already closed may also be lawfully rescinded.
In the 2025 event involving the sale of global port assets by Hong Kong’s CK Hutchison Holdings to the U.S. BlackRock consortium, China articulated its regulatory stance on occasions through public statements. The first expression of views was not a direct official announcement, but rather came through the websites of the Hong Kong and Macao Affairs Office of the State Council and the Hong Kong and Macao Work Committee of the Communist Party of China Central Committee, which on 13 and 15 March republished two commentary articles from Hong Kong’s Ta Kung Pao. Subsequently, on 18 March, Hong Kong SAR Chief Executive John Lee responded, putting forward three points: that social concerns should be taken seriously, that coercive tactics in international economic and trade relations are opposed, and that any transaction must comply with laws and regulations. CPPCC National Committee Vice Chairperson Leung Chun-ying also issued a statement emphasizing that “a businessman without a motherland is like a child without parents, vulnerable to bullying”. On 27 April 2025, the SAMR further clarified that “the transaction parties shall not circumvent the review in any manner, and shall not implement the concentration prior to approval; failure to comply will result in legal liability” [see: https://www.samr.gov.cn/xw/zj/art/2025/art_67506eda5edf4f39b704340c0dd4ad35.html]. On 31 July 2025, He Yadong, Spokesperson of MOFCOM, stated at a regular press conference for the first time that “the Chinese government will conduct review and regulation in accordance with the law, protect fair market competition, safeguard the public interest, and resolutely uphold national sovereignty, security, and development interests” [see: https://app.xinhuanet.com/news/article.html?articleId=fabcacbe11eb984c7bd23cf00223ba73]. On 18 December, He Yadong reiterated the above position at a press conference, emphasizing that “the relevant authorities have issued multiple statements on this matter previously” [see: https://finance.cnr.cn/cjkx/20251219/t20251219_527465360.shtml]. From the tone-setting reposts by the Hong Kong and Macao Affairs Office, to the statements by Lee and Leung, and then to the unambiguous positions of “no circumvention” and “law-based review” articulated by the SAMR and MOFCOM, this series of actions clearly delineates the Chinese government’s regulatory stance on this matter: this is no longer a mere commercial transaction, but a major event that must undergo lawful state review and bears upon national sovereignty, security, and development interests.
From an international antitrust practice perspective, the routine penetrative review of VIE structures, and the deep integration of data security, national security, and antitrust review, mark a comprehensive shift in China’s antitrust regulation toward a multidimensional system centered on “substantive control” and “overall national security”. In planning any cross-border or platform-level transaction involving the Chinese market, a “mega-compliance” perspective must be adopted, treating the contractual control chain, the foreclosure effects of data control, and the time costs of overlapping multiple reviews as core strategic variables in transaction structuring.
Conclusion
China’s antitrust law is no longer a static body of rules, but a rapidly iterating dynamic system. The 2022 AML amendments, the 2024 revision of the merger control filing thresholds and the promulgation of the Regulation on Fair Competition Review, the 2026 issuance of the Antitrust Compliance Guidelines for Internet Platforms, and the expansion of delegated merger control review collectively form an increasingly refined regulatory landscape. Enforcement is equally on an upward trajectory: the fine percentage in platform economy monopoly cases has risen from 3% in Meituan and 4% in Alibaba to 7.5% in the 2026 Ctrip case (with total disgorgement and fines of RMB 5.179 billion, approximately US$768 million), and the Ctrip case marked the first application in a platform case of disgorgement of illegal gains and an order to refund mandatory deposits. Although the 2-5 times aggravating provision in Article 63 of the AML has not yet been applied, the expectation that “the statutory range is no longer the real ceiling” has already taken hold.
Against this backdrop, legal advice on China-related business should undergo three transformations: First, antitrust compliance analysis should be brought forward to the earliest stage of transaction structuring, with independent provisions in transaction documents—covering conditions precedent, closing timelines, and risk allocation—for Chinese review (including below-threshold filing possibilities and national security review), rather than being lumped together with generic “other jurisdiction approval” language. Second, compliance obligations should extend to legal representatives and senior management at the individual level; flexible enforcement signals such as letters of reminder and urging and interviews should be taken seriously; and industry guidelines should be treated as the actual benchmarks for enforcement determinations. Third, the functional understanding of antitrust law should be transformed—it is not merely a compliance burden, but a usable tool: administrative monopoly complaints, fair competition review complaints, third-party comments in merger control cases, and antitrust civil claims are all practical pathways to secure favorable competitive conditions for clients.