On 19 December 2025, the State Administration for Market Regulation (“SAMR”) issued the amended Provisions on the Prohibition of Monopoly Agreements (“Amended Provisions”). The Amended Provisions clarify the market share thresholds and other conditions under which certain vertical monopoly agreements will not be prohibited. They will come into effect on 1 February 2026.
A notable development under the Amended Provisions is to set out specific quantifiable standards and conditions for the application of the safe harbour rule and offer undertakings more concrete guidance and greater predictability when assessing antitrust risks associated with commercial arrangements.
1. Background
The amended Anti-Monopoly Law (“AML”) in 2022 for the first time expressly provided that a vertical monopoly agreement will not be prohibited, if the undertaking can demonstrate that its market share in the relevant market is below the threshold specified by the State Council’s antitrust enforcement authority and that other relevant conditions are satisfied.
In June 2022, the SAMR released for public comment the Draft Provisions on the Prohibition of Monopoly Agreements, which proposed a specific safe harbour threshold of a market share of 15%. Under that draft, the safe harbour threshold would be satisfied, if the market share of an undertaking and its counterparties in each relevant market is below 15%, unless otherwise required by the SAMR. In addition, the draft also required the absence of contradictory evidence indicating the elimination or restriction of competition. This requirement was generally understood to form part of the “other conditions” referred to in Article 18 of the AML. However, this threshold was ultimately not retained in the formally issued version.
In June 2025, the SAMR published a draft amendment of the Provisions on the Prohibition of Monopoly Agreements introducing a dual requirement of market share and turnover. Following the public consultation process, the SAMR formally published the Amended Provisions on 19 December 2025. This marks the first time that the applicable market share thresholds and related conditions for the safe harbour rules have been definitively confirmed since the amended AML entered into force three years ago.
2. Key content
For vertical agreements which fix or restrict minimum resale prices, an undertaking claiming the application of the safe harbour rule is required to demonstrate that, during the term of the agreement and on an annual basis, both the undertaking and its trading counterparty satisfy the prescribed market share thresholds. Specifically, the market share of each party in the relevant market must remain below 5% in each year, and the annual turnover of the products involved in the agreement must be below RMB 100 million.
For other types of vertical monopoly agreements, the safe harbour rule applies where, during the term of the agreement and on an annual basis, the market share of both, the undertaking and its trading counterparty in the relevant market remains below 15%. No turnover threshold applies to such agreements.
The Amended Provisions also clarify that, where there are multiple trading counterparties, the market shares in the same relevant market and the turnover of the products involved in the agreements shall be calculated on an aggregated basis. In addition, where the SAMR has issued different provisions for the application of the safe harbour rule to specific industries, fields, or types of agreements, these provisions shall prevail.
3. Safe harbour rules in specific sectors
It is also worth noting that, prior to the issuance of the Amended Provisions, the SAMR had already introduced specific safe harbour rules for certain industries and types of agreements through sector-specific antitrust guidelines. For example, under the Anti-monopoly Guidelines in the Automotive Sector, undertakings with a market share of less than 30% in the relevant market may be presumed not to possess significant market power, and certain territorial or customer restrictions imposed by such undertakings may be presumed not to constitute prohibited monopoly agreements.
Furthermore, the Anti-Monopoly Guidelines in the Field of Intellectual Property Rights provide that agreements involving intellectual property are generally not to be regarded as monopoly agreements if the combined market share of competing undertakings does not exceed 20%, or if the market share of each undertaking and its trading counterparty does not exceed 30% in any relevant market affected by the agreement. When market share is difficult to be determined or does not accurately reflect the market position, a further safe harbour rule may apply if, in addition to the technologies controlled by the parties, there are four or more substitutable technologies independently controlled by other undertakings and available at reasonable cost in the relevant market.
As mentioned above, the Amended Provisions state that where the SAMR has made different provisions for the application of the safe harbour rule to specific industries, fields, or types of agreements, these provisions shall prevail. However, it remains unclear whether the term “provisions” refers to the above-mentioned anti-monopoly guidelines, which were issued by the State Council Anti-Monopoly Commission.
4. Conclusion
The issuance of the Amended Provisions marks an important step by the SAMR in establishing clearer and more operable safe harbour rules for vertical agreements, and provides undertakings with more meaningful guidance in their commercial conduct.
However, since the Amended Provisions have only recently been issued and have not yet entered into force, it remains to be seen how they will be applied in practice and what approach the antitrust enforcement authority will adopt for their enforcement. In practice, it remains advisable for undertakings to maintain a high degree of caution with regard to vertical restraints, particularly resale price maintenance. It is important to monitor enforcement practice during the first one to two years after implementation of the Amended Provisions and to adapt commercial practices promptly in response to emerging enforcement trends.
