Regulator releases antitrust guideline

China's top market regulator released a guideline on Thursday for business operators on overseas antitrust compliance, which industry experts believe will drive the overall compliance of firms and prevent them from potential risks like trade protection in foreign markets.

The State Administration for Market Regulation said the guideline sets up an institutional framework for companies to establish overseas antitrust compliance systems. It highlights the different determination of monopolistic behavior and antimonopoly investigations, and related responses in multiple jurisdictions in key foreign countries.

"The guideline is in line with the country's rapid economic development under which more and more Chinese companies beef up their presence abroad. Antimonopoly is very likely to be used as a means of trade protection like antidumping cases, so we must plan ahead and prepare in advance," said Dai Jiapeng, a partner of Hylands Law Firm in Beijing.

The SAMR said the guideline is aimed at helping enterprises establish and strengthen overseas antimonopoly compliance management systems to prevent risks. At the same time, it is also conducive to enterprises to better understand international rules, safeguard their own legitimate rights and interests, and further enhance their international competitiveness.

Dai said some Chinese companies still lack awareness and understanding of antimonopoly compliance. For instance, some believe that antimonopoly only concerns large companies while others do not realize some customary domestic practices may be seen as illegal and criminal overseas.

"Also, many Chinese companies do not have a complete system for antimonopoly compliance, and lack daily risk prevention and control as well as crisis response mechanisms," he said.

The move came after the country officially launched the antimonopoly bureau on Thursday, which is located in the same building as the SAMR in Beijing. Gan Lin, the deputy minister of the SAMR, was appointed to head the bureau.

"Such new changes reflect that the country is enriching in-house capabilities for greater enforcement and autonomy regarding antitrust matters," said Liu Xu, a research fellow at the National Strategy Institute at Tsinghua University.

While driving companies to increase their awareness of antimonopoly compliance management for overseas operations, more efforts should also be made to improve domestic law enforcement, supervision systems and transnational cooperation mechanisms, he said.

"For domestic companies, if they conduct illegal activities overseas, there must be efficient and timely punishment mechanisms in the country to prevent them escaping overseas investigations," he added.