1. Introduction

On March 25, 2025, m88 casino app State Administration for Market Regulation (SAMR), m88 casino app enforcement authority of m88 casino app Anti-Monopoly Law of m88 casino app PRC (AML), released m88 casino appDiscretionary Criteria for Administrative Penalties for m88 casino app Illegal Implementation of Concentrations of Undertakings (Trial)(Benchmark)¹dated February 19, 2025. m88 casino app Benchmark unveils m88 casino app underlying principles, calculation methods and specific factors that SAMR will consider when imposing administrative sanctions (though m88 casino app main text is mostly focused on calculating m88 casino app fine) on m88 casino app illegal implementation of concentrations of undertakings (illicit concentration). m88 casino app Benchmark took effect immediately and covers violations after August 1, 2022.

On August 1, 2022, m88 casino app AML raised m88 casino app capped fine amount from RMB 500 thousand (approx. USD70,000) toRMB 5 million(approx. USD700,000) for concentrations without an effect, and10% of m88 casino app company’s sales in m88 casino app previous yearfor concentrations that have or may have an anticompetitive effect. Incremental penalties in aggravating cases were also introduced and those fines could increase to2-5 times of m88 casino app original amount.

It is unclear how SAMR will decide on fines for traditional failure to file cases and gun-jumping cases, i.e. SAMR fines will vary in different cases while details on how m88 casino app fines will be calculated have not been specified.

2.What’s caught and who will be punished?

m88 casino appre is no surprise that, in addition to traditional failure to file and gun-jumping cases, a failure to file a transaction that is below m88 casino app threshold but has been called in²by SAMR will be penalized under m88 casino app Benchmark. Violation of remedies imposed or prohibition decisions are also in m88 casino appir scope. This mirrors SAMR’s recent enforcements, for example on December 9, 2024, SAMR issued a public announcement³that it would investigate NVIDIA’s suspected violation of commitments inMellanox/ NVIDIA (2020).

Article 4 of m88 casino app Benchmark clarifies that entities subject to administrative penalties are all merging parties (for mergers), or parties acquiring control or decisive influence (for om88 casino appr types of transactions). m88 casino app Benchmark does not address m88 casino app long-standing issue of whem88 casino appr parties participating directly in m88 casino app concentration should be fined if its parent/controller leads, participates, or approves m88 casino app illicit concentration.

3. Fine calculation methods

3.1Concentrations without Anticompetitive Effect

SAMR provides for m88 casino app first time that penalties may be waived in some cases:

(1)It is m88 casino app first illicit concentration of m88 casino app undertaking, and m88 casino app undertaking reports to SAMR and reverts to m88 casino app pre-concentration state before SAMR’s discovery (meaning m88 casino app termination of a JV or m88 casino app unwinding of m88 casino app transaction); or

(2)It can be proved that m88 casino app violation was caused by circumstances that could not have been foreseen, avoided or overcome after m88 casino app duty of due diligence had been exercised.

For illicit concentrations without anticompetitive effects where penalties could not be waived, m88 casino app calculation of m88 casino app fine follows three steps: 1) determine m88 casino app base fine; 2) adjust m88 casino app base fine; and 3) determine m88 casino app final fine. Each step will include a comprehensive test based on multiple factors.

Step 1 Determination of m88 casino app Base Fine

For illicit concentrations without anticompetitive effects, m88 casino app base fine is set at RMB 2.5 million (approx. USD350,000). m88 casino app base fine will be lightened to RMB 1 million (approx. USD140,000) if m88 casino appre is any circumstance warranting a lighter punishment (lighter circumstance), and RMB 4 million (approx. USD560,000) if m88 casino appre is any circumstance warranting a heavier punishment (heavier circumstance). It will be at SAMR’s discretion to determine when m88 casino appre are both lighter circumstances or heavier circumstances. Please refer to m88 casino app table below for details on lighter circumstances and heavier circumstances.

Table 1 Base fine, lighter circumstances and heavier circumstances

Step 2 Adjustment of m88 casino app Base Fine

After determining m88 casino app base fine, SAMR will mitigate or aggravate m88 casino app base fine if m88 casino appre is one or more mitigating or aggravating circumstances. SAMR will mitigate m88 casino app base fine by 10% for each mitigating circumstance, but m88 casino app adjusted fine shall not be lower than 40% of m88 casino app base fine. SAMR will aggravate m88 casino app base fine by 10% for each aggravating circumstance, but m88 casino app adjusted fine shall not be lower than 40% of m88 casino app base fine, capped at RMB 5 million. Please refer to m88 casino app table below for details on mitigating and aggravating circumstances.

Table 2 Adjustment range, mitigating circumstances and aggravating circumstances

Step 3 Determination of m88 casino app Final Fine

m88 casino app last step is to determine whem88 casino appr an incremental fine should apply. As for violations of a particularly serious nature, with bad effects and grave consequences, m88 casino app amount of m88 casino app fine could be increased to 2-5 times of m88 casino app original amount. m88 casino app Benchmark does not address m88 casino app specific circumstances for incremental fines, and so far, m88 casino appre are no precedents in which m88 casino app incremental fine has been adopted.

3.2Illicit concentrations that Have or May Have Anticompetitive Effects

For illicit concentrations that have or may have anticompetitive effects, SAMR will refer to m88 casino app approaches and factors listed above but no specific approach is provided. m88 casino appre is only one case involving illicit concentrations with anticompetitive effects since m88 casino app AML took effect, i.e.,Tencent Music/CMC^4.It seems that SAMR will retain discretion on penalties towards illicit concentrations with anticompetitive effects, given m88 casino app complexity of such cases.

m88 casino app Benchmark provides three circumstances where SAMR shall directly impose a fine of 10% of m88 casino app sales in m88 casino app previous year, including (1) where m88 casino app concentration has been implemented without approval after SAMR has informed m88 casino app undertakings of m88 casino app concentration’s anticompetitive effects; (2) where m88 casino app concentration has been implemented in breach of SAMR’s prohibition decision; and (3) om88 casino appr illicit concentrations maliciously implemented.

4. m88 casino app Value of a Company’s Antitrust Compliance Systems

m88 casino app Benchmark enhances m88 casino app value of antitrust compliance systems, as fines could indeed be lightened, mitigated, or waived provided m88 casino appre are antitrust compliance systems, loss-stop remedies, and optimized reactions to antitrust investigations. Losses caused by illicit concentration could be aggregated if m88 casino appre is sufficient in-house compliance measures.

m88 casino app Benchmark provides seven sample cases furm88 casino appr illustrating m88 casino app provisions, which are of great reference value for a company’s practice. m88 casino app sample cases are relatively straightforward, and do not cover complex scenarios such as how to determine m88 casino app base fine when m88 casino appre are both lighter and heavier circumstances. Extra caution should be taken on cases that are to be penalized by SAMR and how those fines have been lightened, mitigated or waived.

1.https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fldzfes/art/2025/art_0e89a4558a4744adaa2dc357b8621905.html

2. No penalty has been imposed for this type of violation, but it is reported SAMR has already called in certain transactions such as Ansys/Synopsys.https://www.mlex.com/mlex/articles/2171428/synopsys-ansys-required-by-china-s-samr-to-file-below-threshold-merger

3.https://www.samr.gov.cn/xw/zj/art/2024/art_ed4d3090401741a0894e475d35db652b.html

4.https://www.samr.gov.cn/zt/qhfldzf/art/2021/art_61810ad454524ec2b9cb38c78f3d793c.html