China's SAMR Releases First Batch of Typical Market Regulation Cases
Published 18 August 2026
Sarah Xuan
On 2 July 2026, the Department of Laws and Regulations of the State Administration for Market Regulation (SAMR) released the Compilation of Typical Market Regulation Cases (First Batch). These are the first cases included in a compilation of exemplary market regulation cases, an initiative coordinated by the Department of Laws and Regulations of SAMR. The project aims to consolidate and publish law enforcement cases from various regulatory areas, thereby serving the comprehensive functions of standardizing enforcement practices, distilling enforcement experience, and strengthening compliance guidance for business entities. The compilation includes a total of twelve typical cases across seven fields: antitrust, anti-unfair competition, intellectual property protection, online regulation, advertising, product quality, and inspection and testing.
For law-enforcement authorities, the case compilation provides practical models for the characterization of unlawful conduct, preservation of evidence, exercise of penalty discretion, and interdepartmental coordination. For business operators, the risks revealed by the cases go beyond the traditional question of whether conduct constitutes a violation of law and extend further into internal compliance areas such as corporate investment decisions, personnel management, advertising review, supply-chain control, product-quality management, data-system governance, and procurement of third-party services.
The following introduces and comments on the twelve typical cases.
I. Case Concerning the Unlawful Implementation of a Concentration of Undertakings by a Xi’an Technology Company and a Shenzhen Electrical Joint-Stock Company
This case arose in the strategically emerging hydrogen-energy equipment industry. On 13 July 2023, a Xi’an technology company and a Shenzhen electrical joint-stock company entered into a Joint Venture Agreement to establish a joint venture, in which they held 51% and 49% of the equity, respectively, and over which they exercised joint control. The turnover of the two companies in the preceding accounting year had reached the then-applicable notification thresholds for concentrations of undertakings. However, before the joint venture was registered and established on 28 July 2023, the parties did not perform their statutory obligation to notify the concentration. In October 2023, the two companies voluntarily submitted explanatory materials to SAMR, reporting that the relevant conduct might constitute an unlawful implementation of a concentration of undertakings.
SAMR determined that the parties’ joint establishment and joint control of the joint venture constituted a concentration of undertakings under the Anti-Monopoly Law and met the notification thresholds, and therefore should have been notified in advance. Implementing the concentration without notification constituted an unlawful implementation of a concentration of undertakings. Following an assessment of competitive effects, the concentration was found not to have the effect of eliminating or restricting competition. Taking into account, among other factors, the parties’ voluntary disclosure before the regulatory authority had become aware of the violation and their active remedial measures, SAMR ultimately imposed a fine of RMB 700,000 on each party.
The significance of this case lies first in its reaffirmation of the procedural independence of the notification obligation for concentrations of undertakings. Whether a concentration ultimately produces effects of eliminating or restricting competition and whether the undertakings are subject to a notification obligation are questions at two different levels. Once a transaction constitutes a concentration of undertakings and meets the statutory notification thresholds, the undertakings are, in principle, required to notify it in advance. Joint ventures, investments in emerging industries, and transactions supported by industrial policy do not, by themselves, remove the requirement for antitrust notification.
At the same time, the case also reflects the increasingly refined mechanism for exercising penalty discretion in concentration cases. Voluntary disclosure of unlawful conduct not yet known to the administrative authority has become an important factor supporting a mitigated penalty and was subsequently incorporated into the rules governing administrative penalty discretion for concentrations of undertakings. For enterprises, this means that transaction compliance must be moved forward to the investment and M&A decision-making stage. In particular, in joint ventures, minority equity investments, and joint-control arrangements, enterprises should not determine whether a concentration has occurred solely by reference to equity ratios, but should concurrently analyze the control structure, turnover thresholds, and timing of notification.
II. Case Concerning a Monopoly Agreement Among Pharmaceutical Enterprises to Fix Prices and Divide Markets
This case concerned neostigmine methylsulfate injection, a national essential medicine and a Class A drug covered by basic medical insurance. From 2020 to 2023, a Shanghai pharmaceutical and medicinal-materials company, a Henan pharmaceutical joint-stock company, and a Chengdu pharmaceutical company were the principal sellers of the drug and were in direct competition with one another. The three companies first coordinated the online-listed price of the drug in Shandong Province and subsequently extended the relevant pricing standard nationwide, increasing online-listed prices, hospital-negotiated prices, and supply prices to distributors in 31 provinces. They then divided the markets for public and private hospitals and maintained implementation of the agreement through agency arrangements, compensation payments, and other means.
The investigation went further than the traditional approach of pursuing only corporate liability. Guo, then general manager of the investment-promotion agency division of the Shanghai company, repeatedly represented the enterprise in communications concerning the monopoly arrangements, arranged compensation payments, coordinated agents, and promoted price adjustments, and was identified as a directly responsible individual for the monopoly agreement at issue. The Shanghai market regulation authority ultimately imposed confiscations and fines totaling RMB 223 million on the three enterprises and separately fined Guo RMB 500,000. The case became China’s first monopoly-agreement case applying a ‘dual-penalty’ regime to both enterprises and responsible individuals.
The case has clear significance as an institutional turning point. Antitrust compliance has long tended to be understood by enterprises as a corporate-level legal risk, whereas this case further strengthens the personal liability of individuals participating in monopoly agreements. In core unlawful conduct such as price coordination and market allocation, managers who actually participate in negotiations, transmit information, or promote implementation of an agreement now face a concrete risk of personal legal liability.
From a compliance perspective, merely adopting an antitrust policy is no longer sufficient to control risk effectively. Functions that directly interact with competitors, including sales, marketing, channel management, and procurement, particularly need clearly defined competition-law ‘red lines’ and dedicated controls for high-risk scenarios such as industry meetings, communications in WeChat groups, coordination with agents, and exchanges of pricing information. Because pharmaceutical pricing is closely connected with expenditures from medical-insurance funds, the substantial penalties in this case also indicate that monopoly conduct involving products essential to people’s livelihoods and affecting public finances will be subject to stricter enforcement assessment.
III. Case Concerning Forced Tying by a Municipal Funeral Home
This case further extended the application of the Anti-Monopoly Law to the funeral-services sector, which has a pronounced public-service character. The funeral home involved was the only operator providing basic funeral services in the relevant urban area. From January 2012 to February 2025, when providing basic funeral services, it required the use of body bags and charged fees for them without the consent of bereaved family members. The market regulation authority of the Guangxi Zhuang Autonomous Region determined that the funeral home had abused its dominant position in the market for basic funeral services by engaging, without justification, in tying, and ordered it to cease the unlawful conduct and imposed a fine of RMB 480,000.
A representative feature of this case is the close integration between the finding of market dominance and the public-service setting. The funeral home was the only provider of basic funeral services in the locality, and such services were highly localized and irreplaceable; accordingly, the operator possessed strong transactional control. In the circumstances, consumers had virtually no realistic alternative, making compulsory purchases of ancillary goods more likely to exclude competition and impair consumers’ freedom of choice.
The case also demonstrates that an entity does not fall outside the constraints of competition law merely because it serves a public-interest purpose or performs public-service functions. On the contrary, where an operator acquires substantial market power as a result of administrative resources, geographic conditions, infrastructure, or similar factors, its transactional conduct may be subject to closer scrutiny. The fine in this case was ultimately set at 5% of the operator’s sales revenue for the preceding year, while the operator’s active cooperation with the investigation and voluntary rectification were also taken into account, reflecting an overall exercise of discretion based on the duration of the violation, its social impact, and the operator’s remedial performance.
IV. Case Concerning Gu and Others’ Infringement of the Exclusive Right to Use Registered Trademarks This was a typical large-scale and organized counterfeiting case involving registered trademarks. Beginning in September 2019, without authorization from the trademark registrants, Gu had fabrics and accessories custom-made, produced counterfeit labels, commissioned processing factories to manufacture garments bearing well-known brands such as ‘ARC’TERYX’ and ‘THE NORTH FACE’, and sold the goods throughout China after transshipment through Ningbo, Zhejiang, thereby forming an integrated chain linking production, supply, warehousing, and sales. Among the participants, a garment company in Fuyang was commissioned to manufacture the infringing apparel, with the value of the relevant products reaching RMB 1.44 million. Market regulation authorities and public security organs conducted a joint investigation and dismantled more than twenty production, warehousing, and sales sites, with the amount involved in the overall case exceeding RMB 200 million. Because the relevant conduct was suspected of constituting criminal offenses, the market regulation authorities promptly transferred the case to the public security organs and established a joint task force with them. Ultimately, the responsible individuals were held criminally liable in accordance with law.
The institutional value of this case most worthy of attention lies in the linkage mechanism between administrative enforcement of intellectual property rights and criminal justice. In large-scale trademark-counterfeiting cases, if administrative authorities limit themselves to seizing goods at a single production site or penalizing a single business operator, it is often difficult to sever the infringement chain in substance. Through information sharing, evidence sharing, and cross-regional joint investigations, this case traced the conduct from the production source to the sales end, demonstrating a trend in intellectual property enforcement from isolated enforcement actions toward governance of the entire industrial chain.
For garment manufacturers, OEM manufacturers, and accessories suppliers, the case also sets out more specific compliance requirements. When accepting commissions to manufacture branded goods, verifying whether the commissioning party has obtained trademark authorization has become an important measure for reducing infringement risk. This is particularly so where well-known branded goods are mass-produced: if an operator proceeds with processing despite obvious irregularities in the source of authorization, the resulting risk may extend beyond ordinary civil infringement liability into administrative or even criminal liability.
V. Case Concerning Xiao and a Hangzhou Technology Company’s Infringement of Trade Secrets
This case illustrates typical trade-secret risks arising in the context of employee mobility. After leaving the right holder, Xu, a former sales manager, established a Hangzhou technology company and accessed the former employer’s enterprise resource planning system by unlawfully using a former colleague’s account, among other means, thereby obtaining and using cost data, order analyses, and other information. Another former employee, Xiao, joined the new company after leaving the right holder and provided the new company with quotation information obtained during his former employment. An appraisal determined that the cost data, order analyses, and quotation information all satisfied the constituent requirements of trade secrets. The market regulation authorities determined that the Hangzhou technology company and Xiao had each violated the provisions of the Anti-Unfair Competition Law concerning trade-secret infringement, ordered them to cease the unlawful conduct, and imposed fines of RMB 350,000 and RMB 100,000, respectively.
The case has three aspects of practical significance. First, termination of an employment relationship does not automatically extinguish an employee’s confidentiality obligations in respect of trade secrets. Second, an enterprise that obtains confidential information by recruiting employees of a competitor may itself incur independent administrative liability. Third, administrative enforcement concerning trade secrets is developing more mature investigative approaches to preserving electronic evidence, appraising secrecy, and determining the relationships among conduct by multiple actors. The compilation specifically notes that the case overcame evidentiary difficulties concerning the preservation of electronic evidence, the appraisal of whether trade secrets were ‘not known to the public’, and the determination of links among multiple actors.
Enterprises therefore need to place greater emphasis on the technical implementation of their trade-secret protection systems. Confidentiality agreements are only a basic measure. Account permissions, log records, controls over data downloads, deactivation of accounts upon departure, exit audits, and tiered management of core materials may all directly affect whether an enterprise can prove, after a dispute arises, that it had taken ‘corresponding confidentiality measures’.
VI. Case Concerning False or Misleading Commercial Publicity by a Hainan E-Commerce Consulting Company
This case arose in the field of live-streaming e-commerce training. The company involved sold training courses on opening online-platform stores through live streaming. From May to December 2024, it induced consumers to purchase high-priced courses by fabricating successful trainees, office premises, and personnel identities and by falsely promising full refunds. The cumulative amount involved reached RMB 1.22 million. After receiving the training, consumers found that the actual business results differed markedly from the promotional claims, leading to a large number of complaints and reports. The Hainan provincial market regulation authority determined that the conduct constituted false or misleading commercial publicity, ordered the company to cease the unlawful conduct, imposed a fine of RMB 2 million, and revoked its business license.
The combination of a maximum statutory fine and revocation of the business license is the clearest enforcement signal from this case. Although false or misleading commercial publicity is common in market-regulation practice, where the false content is systematically designed, affects a large number of people, generates concentrated complaints, and causes serious adverse social impact, administrative sanctions may readily escalate from monetary penalties to compulsory market exit.
The case is also exemplary in its evidentiary methodology. Enforcement authorities separately preserved evidence of fabricated cases, fabricated premises, false identities, and refund promises, and cross-corroborated consumer complaints, live-stream content, and actual business operations to form a complete chain of evidence. This shows that the compliance responsibilities of live-stream operators now cover three levels: the streamer, the goods or services, and the live-streaming environment. The compilation summarizes this as a compliance-management system covering ‘people + goods + setting’.
VII. Case Concerning an Unlawful Advertisement Using an AI-Fabricated Celebrity Image
This case is one of the cases in this batch that most clearly reflects the characteristics of the digital-economy era. A Beijing biotechnology company promoted ‘deep-sea polyene fish-oil gel candies’ through live streaming, claiming that an ordinary food product could prevent or treat diseases by ‘resolving dizziness and headaches, and numbness in the hands and feet’, and used the image of a China Media Group presenter to endorse the product. The investigation confirmed that the presenter’s image had been created by the company using AI video-editing technology without the presenter’s authorization. The Haidian District market regulation authority in Beijing imposed a fine of RMB 200,000 on the company pursuant to the relevant provisions of the Advertising Law prohibiting ordinary foods from claiming disease-treatment functions and governing false advertisements.
The case reflects a regulatory principle that warrants close attention: advances in technical means do not displace existing substantive legal rules. AI generation, video synthesis, and digital-human technologies change the manner in which advertisements are produced, but do not reduce advertisers’ responsibility for the truthfulness and legality of advertising. Where an enterprise uses AI-generated celebrity images to endorse products and consumers have difficulty distinguishing what is authentic from what is fabricated, the risk of deception may even exceed that posed by traditional false advertising.
At the same time, the case indicates that market regulation authorities have begun using technical means to address electronic-evidence issues involving AI-generated content. As AI-generated advertising becomes more prevalent, advertising-review mechanisms need to include dedicated checks concerning synthetic persons, the source of authorization, the authenticity of generated content, and descriptions of product efficacy. For enterprises using digital humans or simulated human likenesses, the assertion that ‘the content was generated by AI’ cannot serve as a defense from liability.
VIII. Series of Cases Concerning the Organization and Planning of Pyramid Selling by a Shanghai Digital Technology Company
This case reflects new characteristics of pyramid-selling activities that use digital technologies for packaging and dissemination. A Shanghai digital technology company operated a membership system through the ‘Wanglianjia’ app, requiring participants to pay fees to obtain membership and the right to recruit downstream participants, and providing rewards based on membership level, the number of persons recruited, and sales performance generated by downstream participants. The model combined the characteristics of charging entry fees, recruiting participants, and calculating remuneration based on team performance. A forensic appraisal showed that the app had accumulated more than 470,000 members and that the company’s unlawful gains reached RMB 37.245 million. The investigation also traced the conduct to the technical-services and fund-settlement stages. Entities providing system-technology services for the app and enterprises providing receipt, payment, and withdrawal services for pyramid-selling funds were all found to have provided conditions facilitating pyramid selling. The company that organized and planned the pyramid-selling scheme was ordered to disgorge RMB 37.245 million in unlawful gains and fined RMB 2 million, and was also placed on the List of Seriously Unlawful and Dishonest Entities. Related assisting entities received administrative penalties, while more than ten core members were held criminally liable in accordance with law.
The case demonstrates the trend of digital-era pyramid-selling governance extending from organizers to infrastructure and service providers. Providers of app development, technical maintenance, payment settlement, and similar services cannot automatically insulate themselves from risk on the ground that they ‘merely provide technical services’. Where the service content, cooperation model, or flow of funds already displays obvious irregularities, a party that nonetheless continues to provide substantive support may fall within the scope of administrative liability assessment. At the same time, administrative penalties, criminal liability, and inclusion on the List of Seriously Unlawful and Dishonest Entities together form a multi-level liability system, extending the cost of violations from one-off monetary sanctions to continuing market-credit constraints.
IX. Case Concerning Substandard Power Cables
The ninth case concerned power cables used in construction projects. A Hainan wire-and-cable company sold five models of power cable to a construction group. Testing revealed that indicators including conductor resistance and insulation hot-set performance failed to comply with national standards. The cables involved totaled 1,528 meters, with a goods value of RMB 646,000 and unlawful gains of RMB 63,600. The Hainan provincial market regulation authority confiscated the products in accordance with law and imposed confiscations and fines totaling RMB 1.195 million.
The case shows that, in product-quality cases involving personal and property safety, administrative penalty assessment has clearly become risk-oriented. Conductor resistance and insulation hot-set performance directly affect a cable’s current-carrying capacity, heat-generation risk, and high-temperature resistance. Even if a substandard product has not yet caused an actual accident, it may already create a high public-safety risk. Regulatory intervention therefore does not require the occurrence of actual harm.The compilation further proposes that cable sellers establish a ‘one check, two inspections, three verifications’ system: check the CCC compulsory certification mark, inspect the type-test report, verify the product’s appearance and certificate of conformity, and record the product source, batch, quantity, and distribution. This requirement illustrates another important function of typical cases: translating abstract product-quality obligations, through the handling of individual cases, into supply-chain management measures that enterprises can implement in practice.
X. Case Concerning Commercial Gas Cooking Appliances
The tenth case further reinforces the risk-oriented enforcement logic. Eleven commercial gas cooking appliances offered for sale by a Wuhan equipment company lacked flame-failure protection devices, and their outer packaging did not state the name and address of the manufacturer, in violation of relevant mandatory national standards. Although the goods involved were worth only RMB 1,960, the enterprise had previously received repeated legal-compliance education from enforcement officers and had signed a Quality and Safety Commitment and a Notice on Compliant Business Operations, yet continued to sell substandard products. The market regulation authorities therefore confiscated the eleven gas appliances, imposed a heavier fine, and placed the enterprise on the List of Seriously Unlawful and Dishonest Entities.
A particularly noteworthy aspect of this case is the distinction between the ‘amount involved in the violation’ and the ‘seriousness of the violation’. Although the goods value of RMB 1,960 was itself very low, the absence of a flame-failure protection device could directly cause gas leakage, fire, or even an explosion, creating significant risk consequences. The enterprise’s continued violation after receiving regulatory warnings and making a written commitment to comply also reflected a relatively high degree of subjective fault. Accordingly, the heavier penalty had a sufficient risk-governance basis.
The case also demonstrates the extended role of credit regulation in administrative enforcement. Inclusion on the List of Seriously Unlawful and Dishonest Entities may further affect administrative approvals, tendering and bidding, financing and credit, and government procurement, causing the consequences of a violation to extend beyond the individual case itself. For safety-related industries, an enterprise’s compliance record is gradually becoming an important business asset affecting its subsequent market activities.XI. Case Concerning a Shenzhen Testing Company
This case focuses on the long-standing problem of false reports in the inspection and testing industry. Although a Shenzhen testing company had lawfully obtained CMA accreditation, it adopted a ‘report without testing’ model, directly generating passing test data according to clients’ requests without receiving samples or carrying out actual tests, and evading regulation through scripted-response training, concealment of identities, and avoidance of recordkeeping. The investigation found that the company had issued 124 false test reports bearing the CMA mark and had obtained unlawful gains of RMB 52,800; some of the reports had already entered government-procurement tendering and bidding processes. The Longhua office of the Shenzhen market regulation authority lawfully revoked the company’s qualification accreditation as an inspection and testing institution, confiscated its unlawful gains of RMB 52,800, and imposed a fine of RMB 100,000. It also separately fined the directly responsible supervisors and directly responsible personnel RMB 50,000 each.
The case reveals two important changes in the regulation of inspection and testing. First, where systematic falsification is carried out under the cover of lawful qualifications, the qualification itself has become a subject of sanction. Revoking the qualification directly deprives the violator of the institutional basis for continuing to conduct the same business, and is significantly more deterrent than an ordinary fine. Second, liability is further extended to directly responsible supervisors and directly responsible personnel, creating a structure in which both the institution and individuals bear responsibility.
In addition, the case reconstructed the process by which false reports were generated and used through cross-departmental and cross-regional cooperation and professional technical appraisal, indicating that inspection and testing enforcement increasingly relies on data, technology, and interdepartmental information sharing. For entities involved in government procurement, tendering and bidding, and product manufacturing, third-party test reports should likewise not be mechanically treated as tools that isolate risk. If a purchaser fails reasonably to review a test report that is obviously irregular, related supply-chain compliance risks may continue to pass downstream.
XII. Case Concerning False Motor-Vehicle Emissions Inspection Reports
This case demonstrates another complete form of linkage between administrative enforcement and criminal justice. A motor-vehicle inspection company in Ma’anshan falsified and altered original inspection data by damaging computer information systems and modifying inspection parameters, enabling 430 vehicles that had failed exhaust-pollutant tests to pass inspections unlawfully and resulting in the issuance of false emissions inspection reports. Once the conduct was suspected of constituting a criminal offense, the administrative authority promptly transferred the case to the judicial authorities. The court ultimately found the company guilty of the crime of damaging computer information systems, imposed a fine of RMB 50,000 on the company, and held the relevant individuals criminally liable. After completion of the criminal proceedings, the market regulation authorities, pursuant to the Air Pollution Prevention and Control Law, further imposed the administrative penalty of cancelling the company’s motor-vehicle inspection qualification, and the Anhui provincial market regulation authority subsequently revoked its inspection and testing institution accreditation certificate.
The institutional value of this case lies in its complete presentation of a governance chain of ‘criminal adjudication - administrative penalty - revocation of qualification’. Criminal liability addressed offenses such as damaging computer information systems, while the administrative authorities further deprived the company, under industry-regulation rules, of its qualification to continue carrying out inspection and testing activities. The two forms of liability have distinct legal bases and regulatory functions. The compilation specifically notes that, by having criminal proceedings proceed first and administrative sanctions follow, this approach both avoided duplicate fines and achieved the governance effect of removing the violator from the relevant market.The case shows that the ‘linkage between administrative enforcement and criminal justice’ has gradually developed from a simple case-transfer system into a coordination mechanism among different types of liability. Administrative authorities are concerned not only with whether unlawful conduct should be transferred for criminal prosecution, but also with whether, after a criminal judgment, qualification sanctions, market exit, or other administrative regulatory measures still need to be implemented.
Conclusion
The twelve cases presented in the Compilation of Typical Market Regulation Cases (First Batch) cover multiple core areas of traditional market regulation and digital-economy regulation, and collectively illustrate the development trends in China’s market-regulation enforcement from investigating individual acts toward risk governance, from isolated enforcement toward whole-chain coordination, and from corporate liability toward multi-actor liability.
From the perspective of rule implementation, the value of these cases is not limited to indicating which legal provision should apply to a particular violation. The concentration cases remind enterprises to move competition compliance forward to the transaction-decision stage; the pharmaceutical monopoly case strengthens the personal liability of managers; the trade-secret case extends compliance to information systems and employee offboarding management; the AI-advertising and live-streaming e-commerce cases require enterprises to establish content-review systems adapted to new technological scenarios; the product-quality cases emphasize risk control and supply-chain verification; and the inspection and testing cases organically link administrative penalties, individual liability, disqualification and market exit, and even criminal justice. Together, these developments create comprehensive compliance requirements covering corporate decision-making, operations, personnel, technology, data, supply chains, and third-party cooperative relationships.
For market participants, typical cases provide a more operational method of identifying risk than abstract statutory provisions. Enterprises can use the cases to review their own business processes in reverse, convert patterns of unlawful conduct already expressly identified by regulatory authorities into internal risk lists, and on that basis improve approval, review, recordkeeping, and accountability mechanisms. For the market-regulation system itself, the continuing publication of typical cases also helps improve the transparency and predictability of administrative enforcement standards. By publishing case facts, legal bases, discretionary factors, and case comments, regulatory authorities transform enforcement experience dispersed across individual cases into rule signals of general guiding value. As the mechanism for publishing typical cases gradually becomes normalized, its function is expected to extend further from enforcement publicity to greater consistency in discretionary decision-making, compliance guidance, and rule interpretation, making it an important institutional vehicle connecting written legal norms, administrative enforcement practice, and the compliance governance of business operators.
For law-enforcement authorities, the case compilation provides practical models for the characterization of unlawful conduct, preservation of evidence, exercise of penalty discretion, and interdepartmental coordination. For business operators, the risks revealed by the cases go beyond the traditional question of whether conduct constitutes a violation of law and extend further into internal compliance areas such as corporate investment decisions, personnel management, advertising review, supply-chain control, product-quality management, data-system governance, and procurement of third-party services.
The following introduces and comments on the twelve typical cases.
I. Case Concerning the Unlawful Implementation of a Concentration of Undertakings by a Xi’an Technology Company and a Shenzhen Electrical Joint-Stock Company
This case arose in the strategically emerging hydrogen-energy equipment industry. On 13 July 2023, a Xi’an technology company and a Shenzhen electrical joint-stock company entered into a Joint Venture Agreement to establish a joint venture, in which they held 51% and 49% of the equity, respectively, and over which they exercised joint control. The turnover of the two companies in the preceding accounting year had reached the then-applicable notification thresholds for concentrations of undertakings. However, before the joint venture was registered and established on 28 July 2023, the parties did not perform their statutory obligation to notify the concentration. In October 2023, the two companies voluntarily submitted explanatory materials to SAMR, reporting that the relevant conduct might constitute an unlawful implementation of a concentration of undertakings.
SAMR determined that the parties’ joint establishment and joint control of the joint venture constituted a concentration of undertakings under the Anti-Monopoly Law and met the notification thresholds, and therefore should have been notified in advance. Implementing the concentration without notification constituted an unlawful implementation of a concentration of undertakings. Following an assessment of competitive effects, the concentration was found not to have the effect of eliminating or restricting competition. Taking into account, among other factors, the parties’ voluntary disclosure before the regulatory authority had become aware of the violation and their active remedial measures, SAMR ultimately imposed a fine of RMB 700,000 on each party.
The significance of this case lies first in its reaffirmation of the procedural independence of the notification obligation for concentrations of undertakings. Whether a concentration ultimately produces effects of eliminating or restricting competition and whether the undertakings are subject to a notification obligation are questions at two different levels. Once a transaction constitutes a concentration of undertakings and meets the statutory notification thresholds, the undertakings are, in principle, required to notify it in advance. Joint ventures, investments in emerging industries, and transactions supported by industrial policy do not, by themselves, remove the requirement for antitrust notification.
At the same time, the case also reflects the increasingly refined mechanism for exercising penalty discretion in concentration cases. Voluntary disclosure of unlawful conduct not yet known to the administrative authority has become an important factor supporting a mitigated penalty and was subsequently incorporated into the rules governing administrative penalty discretion for concentrations of undertakings. For enterprises, this means that transaction compliance must be moved forward to the investment and M&A decision-making stage. In particular, in joint ventures, minority equity investments, and joint-control arrangements, enterprises should not determine whether a concentration has occurred solely by reference to equity ratios, but should concurrently analyze the control structure, turnover thresholds, and timing of notification.
II. Case Concerning a Monopoly Agreement Among Pharmaceutical Enterprises to Fix Prices and Divide Markets
This case concerned neostigmine methylsulfate injection, a national essential medicine and a Class A drug covered by basic medical insurance. From 2020 to 2023, a Shanghai pharmaceutical and medicinal-materials company, a Henan pharmaceutical joint-stock company, and a Chengdu pharmaceutical company were the principal sellers of the drug and were in direct competition with one another. The three companies first coordinated the online-listed price of the drug in Shandong Province and subsequently extended the relevant pricing standard nationwide, increasing online-listed prices, hospital-negotiated prices, and supply prices to distributors in 31 provinces. They then divided the markets for public and private hospitals and maintained implementation of the agreement through agency arrangements, compensation payments, and other means.
The investigation went further than the traditional approach of pursuing only corporate liability. Guo, then general manager of the investment-promotion agency division of the Shanghai company, repeatedly represented the enterprise in communications concerning the monopoly arrangements, arranged compensation payments, coordinated agents, and promoted price adjustments, and was identified as a directly responsible individual for the monopoly agreement at issue. The Shanghai market regulation authority ultimately imposed confiscations and fines totaling RMB 223 million on the three enterprises and separately fined Guo RMB 500,000. The case became China’s first monopoly-agreement case applying a ‘dual-penalty’ regime to both enterprises and responsible individuals.
The case has clear significance as an institutional turning point. Antitrust compliance has long tended to be understood by enterprises as a corporate-level legal risk, whereas this case further strengthens the personal liability of individuals participating in monopoly agreements. In core unlawful conduct such as price coordination and market allocation, managers who actually participate in negotiations, transmit information, or promote implementation of an agreement now face a concrete risk of personal legal liability.
From a compliance perspective, merely adopting an antitrust policy is no longer sufficient to control risk effectively. Functions that directly interact with competitors, including sales, marketing, channel management, and procurement, particularly need clearly defined competition-law ‘red lines’ and dedicated controls for high-risk scenarios such as industry meetings, communications in WeChat groups, coordination with agents, and exchanges of pricing information. Because pharmaceutical pricing is closely connected with expenditures from medical-insurance funds, the substantial penalties in this case also indicate that monopoly conduct involving products essential to people’s livelihoods and affecting public finances will be subject to stricter enforcement assessment.
III. Case Concerning Forced Tying by a Municipal Funeral Home
This case further extended the application of the Anti-Monopoly Law to the funeral-services sector, which has a pronounced public-service character. The funeral home involved was the only operator providing basic funeral services in the relevant urban area. From January 2012 to February 2025, when providing basic funeral services, it required the use of body bags and charged fees for them without the consent of bereaved family members. The market regulation authority of the Guangxi Zhuang Autonomous Region determined that the funeral home had abused its dominant position in the market for basic funeral services by engaging, without justification, in tying, and ordered it to cease the unlawful conduct and imposed a fine of RMB 480,000.
A representative feature of this case is the close integration between the finding of market dominance and the public-service setting. The funeral home was the only provider of basic funeral services in the locality, and such services were highly localized and irreplaceable; accordingly, the operator possessed strong transactional control. In the circumstances, consumers had virtually no realistic alternative, making compulsory purchases of ancillary goods more likely to exclude competition and impair consumers’ freedom of choice.
The case also demonstrates that an entity does not fall outside the constraints of competition law merely because it serves a public-interest purpose or performs public-service functions. On the contrary, where an operator acquires substantial market power as a result of administrative resources, geographic conditions, infrastructure, or similar factors, its transactional conduct may be subject to closer scrutiny. The fine in this case was ultimately set at 5% of the operator’s sales revenue for the preceding year, while the operator’s active cooperation with the investigation and voluntary rectification were also taken into account, reflecting an overall exercise of discretion based on the duration of the violation, its social impact, and the operator’s remedial performance.
IV. Case Concerning Gu and Others’ Infringement of the Exclusive Right to Use Registered Trademarks This was a typical large-scale and organized counterfeiting case involving registered trademarks. Beginning in September 2019, without authorization from the trademark registrants, Gu had fabrics and accessories custom-made, produced counterfeit labels, commissioned processing factories to manufacture garments bearing well-known brands such as ‘ARC’TERYX’ and ‘THE NORTH FACE’, and sold the goods throughout China after transshipment through Ningbo, Zhejiang, thereby forming an integrated chain linking production, supply, warehousing, and sales. Among the participants, a garment company in Fuyang was commissioned to manufacture the infringing apparel, with the value of the relevant products reaching RMB 1.44 million. Market regulation authorities and public security organs conducted a joint investigation and dismantled more than twenty production, warehousing, and sales sites, with the amount involved in the overall case exceeding RMB 200 million. Because the relevant conduct was suspected of constituting criminal offenses, the market regulation authorities promptly transferred the case to the public security organs and established a joint task force with them. Ultimately, the responsible individuals were held criminally liable in accordance with law.
The institutional value of this case most worthy of attention lies in the linkage mechanism between administrative enforcement of intellectual property rights and criminal justice. In large-scale trademark-counterfeiting cases, if administrative authorities limit themselves to seizing goods at a single production site or penalizing a single business operator, it is often difficult to sever the infringement chain in substance. Through information sharing, evidence sharing, and cross-regional joint investigations, this case traced the conduct from the production source to the sales end, demonstrating a trend in intellectual property enforcement from isolated enforcement actions toward governance of the entire industrial chain.
For garment manufacturers, OEM manufacturers, and accessories suppliers, the case also sets out more specific compliance requirements. When accepting commissions to manufacture branded goods, verifying whether the commissioning party has obtained trademark authorization has become an important measure for reducing infringement risk. This is particularly so where well-known branded goods are mass-produced: if an operator proceeds with processing despite obvious irregularities in the source of authorization, the resulting risk may extend beyond ordinary civil infringement liability into administrative or even criminal liability.
V. Case Concerning Xiao and a Hangzhou Technology Company’s Infringement of Trade Secrets
This case illustrates typical trade-secret risks arising in the context of employee mobility. After leaving the right holder, Xu, a former sales manager, established a Hangzhou technology company and accessed the former employer’s enterprise resource planning system by unlawfully using a former colleague’s account, among other means, thereby obtaining and using cost data, order analyses, and other information. Another former employee, Xiao, joined the new company after leaving the right holder and provided the new company with quotation information obtained during his former employment. An appraisal determined that the cost data, order analyses, and quotation information all satisfied the constituent requirements of trade secrets. The market regulation authorities determined that the Hangzhou technology company and Xiao had each violated the provisions of the Anti-Unfair Competition Law concerning trade-secret infringement, ordered them to cease the unlawful conduct, and imposed fines of RMB 350,000 and RMB 100,000, respectively.
The case has three aspects of practical significance. First, termination of an employment relationship does not automatically extinguish an employee’s confidentiality obligations in respect of trade secrets. Second, an enterprise that obtains confidential information by recruiting employees of a competitor may itself incur independent administrative liability. Third, administrative enforcement concerning trade secrets is developing more mature investigative approaches to preserving electronic evidence, appraising secrecy, and determining the relationships among conduct by multiple actors. The compilation specifically notes that the case overcame evidentiary difficulties concerning the preservation of electronic evidence, the appraisal of whether trade secrets were ‘not known to the public’, and the determination of links among multiple actors.
Enterprises therefore need to place greater emphasis on the technical implementation of their trade-secret protection systems. Confidentiality agreements are only a basic measure. Account permissions, log records, controls over data downloads, deactivation of accounts upon departure, exit audits, and tiered management of core materials may all directly affect whether an enterprise can prove, after a dispute arises, that it had taken ‘corresponding confidentiality measures’.
VI. Case Concerning False or Misleading Commercial Publicity by a Hainan E-Commerce Consulting Company
This case arose in the field of live-streaming e-commerce training. The company involved sold training courses on opening online-platform stores through live streaming. From May to December 2024, it induced consumers to purchase high-priced courses by fabricating successful trainees, office premises, and personnel identities and by falsely promising full refunds. The cumulative amount involved reached RMB 1.22 million. After receiving the training, consumers found that the actual business results differed markedly from the promotional claims, leading to a large number of complaints and reports. The Hainan provincial market regulation authority determined that the conduct constituted false or misleading commercial publicity, ordered the company to cease the unlawful conduct, imposed a fine of RMB 2 million, and revoked its business license.
The combination of a maximum statutory fine and revocation of the business license is the clearest enforcement signal from this case. Although false or misleading commercial publicity is common in market-regulation practice, where the false content is systematically designed, affects a large number of people, generates concentrated complaints, and causes serious adverse social impact, administrative sanctions may readily escalate from monetary penalties to compulsory market exit.
The case is also exemplary in its evidentiary methodology. Enforcement authorities separately preserved evidence of fabricated cases, fabricated premises, false identities, and refund promises, and cross-corroborated consumer complaints, live-stream content, and actual business operations to form a complete chain of evidence. This shows that the compliance responsibilities of live-stream operators now cover three levels: the streamer, the goods or services, and the live-streaming environment. The compilation summarizes this as a compliance-management system covering ‘people + goods + setting’.
VII. Case Concerning an Unlawful Advertisement Using an AI-Fabricated Celebrity Image
This case is one of the cases in this batch that most clearly reflects the characteristics of the digital-economy era. A Beijing biotechnology company promoted ‘deep-sea polyene fish-oil gel candies’ through live streaming, claiming that an ordinary food product could prevent or treat diseases by ‘resolving dizziness and headaches, and numbness in the hands and feet’, and used the image of a China Media Group presenter to endorse the product. The investigation confirmed that the presenter’s image had been created by the company using AI video-editing technology without the presenter’s authorization. The Haidian District market regulation authority in Beijing imposed a fine of RMB 200,000 on the company pursuant to the relevant provisions of the Advertising Law prohibiting ordinary foods from claiming disease-treatment functions and governing false advertisements.
The case reflects a regulatory principle that warrants close attention: advances in technical means do not displace existing substantive legal rules. AI generation, video synthesis, and digital-human technologies change the manner in which advertisements are produced, but do not reduce advertisers’ responsibility for the truthfulness and legality of advertising. Where an enterprise uses AI-generated celebrity images to endorse products and consumers have difficulty distinguishing what is authentic from what is fabricated, the risk of deception may even exceed that posed by traditional false advertising.
At the same time, the case indicates that market regulation authorities have begun using technical means to address electronic-evidence issues involving AI-generated content. As AI-generated advertising becomes more prevalent, advertising-review mechanisms need to include dedicated checks concerning synthetic persons, the source of authorization, the authenticity of generated content, and descriptions of product efficacy. For enterprises using digital humans or simulated human likenesses, the assertion that ‘the content was generated by AI’ cannot serve as a defense from liability.
VIII. Series of Cases Concerning the Organization and Planning of Pyramid Selling by a Shanghai Digital Technology Company
This case reflects new characteristics of pyramid-selling activities that use digital technologies for packaging and dissemination. A Shanghai digital technology company operated a membership system through the ‘Wanglianjia’ app, requiring participants to pay fees to obtain membership and the right to recruit downstream participants, and providing rewards based on membership level, the number of persons recruited, and sales performance generated by downstream participants. The model combined the characteristics of charging entry fees, recruiting participants, and calculating remuneration based on team performance. A forensic appraisal showed that the app had accumulated more than 470,000 members and that the company’s unlawful gains reached RMB 37.245 million. The investigation also traced the conduct to the technical-services and fund-settlement stages. Entities providing system-technology services for the app and enterprises providing receipt, payment, and withdrawal services for pyramid-selling funds were all found to have provided conditions facilitating pyramid selling. The company that organized and planned the pyramid-selling scheme was ordered to disgorge RMB 37.245 million in unlawful gains and fined RMB 2 million, and was also placed on the List of Seriously Unlawful and Dishonest Entities. Related assisting entities received administrative penalties, while more than ten core members were held criminally liable in accordance with law.
The case demonstrates the trend of digital-era pyramid-selling governance extending from organizers to infrastructure and service providers. Providers of app development, technical maintenance, payment settlement, and similar services cannot automatically insulate themselves from risk on the ground that they ‘merely provide technical services’. Where the service content, cooperation model, or flow of funds already displays obvious irregularities, a party that nonetheless continues to provide substantive support may fall within the scope of administrative liability assessment. At the same time, administrative penalties, criminal liability, and inclusion on the List of Seriously Unlawful and Dishonest Entities together form a multi-level liability system, extending the cost of violations from one-off monetary sanctions to continuing market-credit constraints.
IX. Case Concerning Substandard Power Cables
The ninth case concerned power cables used in construction projects. A Hainan wire-and-cable company sold five models of power cable to a construction group. Testing revealed that indicators including conductor resistance and insulation hot-set performance failed to comply with national standards. The cables involved totaled 1,528 meters, with a goods value of RMB 646,000 and unlawful gains of RMB 63,600. The Hainan provincial market regulation authority confiscated the products in accordance with law and imposed confiscations and fines totaling RMB 1.195 million.
The case shows that, in product-quality cases involving personal and property safety, administrative penalty assessment has clearly become risk-oriented. Conductor resistance and insulation hot-set performance directly affect a cable’s current-carrying capacity, heat-generation risk, and high-temperature resistance. Even if a substandard product has not yet caused an actual accident, it may already create a high public-safety risk. Regulatory intervention therefore does not require the occurrence of actual harm.The compilation further proposes that cable sellers establish a ‘one check, two inspections, three verifications’ system: check the CCC compulsory certification mark, inspect the type-test report, verify the product’s appearance and certificate of conformity, and record the product source, batch, quantity, and distribution. This requirement illustrates another important function of typical cases: translating abstract product-quality obligations, through the handling of individual cases, into supply-chain management measures that enterprises can implement in practice.
X. Case Concerning Commercial Gas Cooking Appliances
The tenth case further reinforces the risk-oriented enforcement logic. Eleven commercial gas cooking appliances offered for sale by a Wuhan equipment company lacked flame-failure protection devices, and their outer packaging did not state the name and address of the manufacturer, in violation of relevant mandatory national standards. Although the goods involved were worth only RMB 1,960, the enterprise had previously received repeated legal-compliance education from enforcement officers and had signed a Quality and Safety Commitment and a Notice on Compliant Business Operations, yet continued to sell substandard products. The market regulation authorities therefore confiscated the eleven gas appliances, imposed a heavier fine, and placed the enterprise on the List of Seriously Unlawful and Dishonest Entities.
A particularly noteworthy aspect of this case is the distinction between the ‘amount involved in the violation’ and the ‘seriousness of the violation’. Although the goods value of RMB 1,960 was itself very low, the absence of a flame-failure protection device could directly cause gas leakage, fire, or even an explosion, creating significant risk consequences. The enterprise’s continued violation after receiving regulatory warnings and making a written commitment to comply also reflected a relatively high degree of subjective fault. Accordingly, the heavier penalty had a sufficient risk-governance basis.
The case also demonstrates the extended role of credit regulation in administrative enforcement. Inclusion on the List of Seriously Unlawful and Dishonest Entities may further affect administrative approvals, tendering and bidding, financing and credit, and government procurement, causing the consequences of a violation to extend beyond the individual case itself. For safety-related industries, an enterprise’s compliance record is gradually becoming an important business asset affecting its subsequent market activities.XI. Case Concerning a Shenzhen Testing Company
This case focuses on the long-standing problem of false reports in the inspection and testing industry. Although a Shenzhen testing company had lawfully obtained CMA accreditation, it adopted a ‘report without testing’ model, directly generating passing test data according to clients’ requests without receiving samples or carrying out actual tests, and evading regulation through scripted-response training, concealment of identities, and avoidance of recordkeeping. The investigation found that the company had issued 124 false test reports bearing the CMA mark and had obtained unlawful gains of RMB 52,800; some of the reports had already entered government-procurement tendering and bidding processes. The Longhua office of the Shenzhen market regulation authority lawfully revoked the company’s qualification accreditation as an inspection and testing institution, confiscated its unlawful gains of RMB 52,800, and imposed a fine of RMB 100,000. It also separately fined the directly responsible supervisors and directly responsible personnel RMB 50,000 each.
The case reveals two important changes in the regulation of inspection and testing. First, where systematic falsification is carried out under the cover of lawful qualifications, the qualification itself has become a subject of sanction. Revoking the qualification directly deprives the violator of the institutional basis for continuing to conduct the same business, and is significantly more deterrent than an ordinary fine. Second, liability is further extended to directly responsible supervisors and directly responsible personnel, creating a structure in which both the institution and individuals bear responsibility.
In addition, the case reconstructed the process by which false reports were generated and used through cross-departmental and cross-regional cooperation and professional technical appraisal, indicating that inspection and testing enforcement increasingly relies on data, technology, and interdepartmental information sharing. For entities involved in government procurement, tendering and bidding, and product manufacturing, third-party test reports should likewise not be mechanically treated as tools that isolate risk. If a purchaser fails reasonably to review a test report that is obviously irregular, related supply-chain compliance risks may continue to pass downstream.
XII. Case Concerning False Motor-Vehicle Emissions Inspection Reports
This case demonstrates another complete form of linkage between administrative enforcement and criminal justice. A motor-vehicle inspection company in Ma’anshan falsified and altered original inspection data by damaging computer information systems and modifying inspection parameters, enabling 430 vehicles that had failed exhaust-pollutant tests to pass inspections unlawfully and resulting in the issuance of false emissions inspection reports. Once the conduct was suspected of constituting a criminal offense, the administrative authority promptly transferred the case to the judicial authorities. The court ultimately found the company guilty of the crime of damaging computer information systems, imposed a fine of RMB 50,000 on the company, and held the relevant individuals criminally liable. After completion of the criminal proceedings, the market regulation authorities, pursuant to the Air Pollution Prevention and Control Law, further imposed the administrative penalty of cancelling the company’s motor-vehicle inspection qualification, and the Anhui provincial market regulation authority subsequently revoked its inspection and testing institution accreditation certificate.
The institutional value of this case lies in its complete presentation of a governance chain of ‘criminal adjudication - administrative penalty - revocation of qualification’. Criminal liability addressed offenses such as damaging computer information systems, while the administrative authorities further deprived the company, under industry-regulation rules, of its qualification to continue carrying out inspection and testing activities. The two forms of liability have distinct legal bases and regulatory functions. The compilation specifically notes that, by having criminal proceedings proceed first and administrative sanctions follow, this approach both avoided duplicate fines and achieved the governance effect of removing the violator from the relevant market.The case shows that the ‘linkage between administrative enforcement and criminal justice’ has gradually developed from a simple case-transfer system into a coordination mechanism among different types of liability. Administrative authorities are concerned not only with whether unlawful conduct should be transferred for criminal prosecution, but also with whether, after a criminal judgment, qualification sanctions, market exit, or other administrative regulatory measures still need to be implemented.
Conclusion
The twelve cases presented in the Compilation of Typical Market Regulation Cases (First Batch) cover multiple core areas of traditional market regulation and digital-economy regulation, and collectively illustrate the development trends in China’s market-regulation enforcement from investigating individual acts toward risk governance, from isolated enforcement toward whole-chain coordination, and from corporate liability toward multi-actor liability.
From the perspective of rule implementation, the value of these cases is not limited to indicating which legal provision should apply to a particular violation. The concentration cases remind enterprises to move competition compliance forward to the transaction-decision stage; the pharmaceutical monopoly case strengthens the personal liability of managers; the trade-secret case extends compliance to information systems and employee offboarding management; the AI-advertising and live-streaming e-commerce cases require enterprises to establish content-review systems adapted to new technological scenarios; the product-quality cases emphasize risk control and supply-chain verification; and the inspection and testing cases organically link administrative penalties, individual liability, disqualification and market exit, and even criminal justice. Together, these developments create comprehensive compliance requirements covering corporate decision-making, operations, personnel, technology, data, supply chains, and third-party cooperative relationships.
For market participants, typical cases provide a more operational method of identifying risk than abstract statutory provisions. Enterprises can use the cases to review their own business processes in reverse, convert patterns of unlawful conduct already expressly identified by regulatory authorities into internal risk lists, and on that basis improve approval, review, recordkeeping, and accountability mechanisms. For the market-regulation system itself, the continuing publication of typical cases also helps improve the transparency and predictability of administrative enforcement standards. By publishing case facts, legal bases, discretionary factors, and case comments, regulatory authorities transform enforcement experience dispersed across individual cases into rule signals of general guiding value. As the mechanism for publishing typical cases gradually becomes normalized, its function is expected to extend further from enforcement publicity to greater consistency in discretionary decision-making, compliance guidance, and rule interpretation, making it an important institutional vehicle connecting written legal norms, administrative enforcement practice, and the compliance governance of business operators.