- Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
- Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
- What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
- Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
- Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
- Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
- Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
- Are there legal developments on the horizon in relation to CCPs?
jurisdiction
1. Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
On 25 April 2024, the PRC Anti-monopoly and Anti-unfair Competition Commission of the State Council released a new version of the Antitrust Compliance Guidelines for Undertakings, which is a revision of the guidelines originally issued by the PRC Anti-monopoly Commission of the State Council in 2020.
According to the guidelines, the key components of an effective CCP include:
- A structured management system, with a dedicated compliance organisation and risk management mechanisms.
- Strict enforcement of the compliance program and fulfilment of antitrust commitments.
- Effective supervision and safeguard measures.
2. Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
Currently, cases in the PRC do not provide detailed mention of the impact of a CCP. However, in some instances, PRC antitrust enforcement authority, i.e. the State Administration for Market Regulation (the PRC NCA), considers companies' efforts regarding the CCP in the penalty decisions. For example, in a 2022 penalty decision involving a vertical monopoly agreement, it was noted: Considering that the party... took active measures to rectify and mitigate the impact, revised the distribution contracts and evaluation system, improved the company’s antitrust compliance system, and voluntarily reduced prices, it qualifies for a lighter penalty according to the law.
3. What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
As mentioned in question no. 2 above, the relevant cases do not provide a detailed analysis of the role of a CCP, or the factors considered when evaluating its existence. In the case referenced above, the PRC NCA noted improvements made to the CCP by the company after issues arose, focusing on future changes. However, the Antitrust Compliance Guidelines for Undertakings specify that when a company applies for incentives for compliance, the PRC NCA should consider the completeness, authenticity, and effectiveness of the existing CCP.
4. Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
Currently, there are no cases that specifically analyse the role of management and employees in a CCP. However, the Antitrust Compliance Guidelines for Undertakings elaborate on the responsibilities assigned to the compliance management leader, the leading compliance management department, and the relevant business and functional departments within the CCP. This indicates that management and employees play crucial roles in preventing, detecting, and addressing violations, as well as ensuring the effectiveness of the CCP.
5. Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
The Antitrust Compliance Guidelines for Undertakings stipulate that if a company actively establishes or improves its antitrust compliance management system and effectively implements it before an administrative penalty decision is made by the antitrust enforcement authority, and the relevant effort plays a significant role in mitigating or eliminating the consequences of the violation, the PRC NCA may exercise discretion to reduce or lighten the administrative penalty, as the case referenced in question no. 2.
As for the remaining aspects of this question, such as specific facts, arguments, or commitments used to justify reductions, as well as the maximum reduction that can be granted or the reasons for not granting a reduction, these details remain unknown as they are not disclosed in the penalty decisions and there are no clear regulations in this regard.
6. Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
We are not aware of any relevant cases.
7. Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
As mentioned before, this year, the updated Antitrust Compliance Guidelines for Undertakings have been published, providing more detailed guidance and examples on various aspects of compliance. One of the most significant developments is the incorporation of an entire chapter on incentives for CCPs. Specifically, the PRC NCA may consider the implementation of the CCPs of the involved company while investigating and addressing violations of competition laws. The guidelines outline four circumstances under which these incentives may apply: (1) incentives prior to investigation; (2) incentives for commitments made during the investigation; (3) incentives for leniency; and (4) incentives for discretion in fines.
8. Are there legal developments on the horizon in relation to CCPs?
Given the recent updates to the aforementioned guidelines, we anticipate that future cases will provide more detailed disclosures regarding the incentives for CCPs. This expectation reflects a growing emphasis on compliance measures and their recognition within enforcement practices, potentially leading to enhanced clarity on the implications and benefits of adopting or updating compliance programs.
