SAIC’s First Cartel Case and Final Rules Under the Chinese AML

March 2, 2011

China’s State Administration for Industry and Commerce (“SAIC”) recently announced its first cartel decision and adopted final implementation rules under the Chinese Anti-Monopoly Law (the “AML”), including creation of a new leniency regime. These developments suggest that SAIC is now ready to step up its enforcement activities under the AML, which entered into force in August 2008. SAIC’s decision concerned a non-price cartel organized by a construction material and machinery trade association among concrete producers in Jiangsu Province. SAIC fined the trade association and five cartel participants, but granted immunity to eleven participants. Interestingly, this approach appears to be inconsistent with SAIC’s own leniency program as set out in the new implementing rules. The SAIC Final Rules are unclear in a number of respects and are likely to give rise to many practical questions. As noted, however, SAIC seems poised to increase its AML enforcement activities, as does the National Development and Reform Commission (“NDRC”), which also recently finalized its implementing rules for investigating possible price-related antitrust violations and adopted its own, somewhat different, leniency program. SAIC’s and NDRC’s overlapping jurisdiction in cases involving both price- and non-price-related conduct, and the differences between their rules, create a potential for inconsistent enforcement.