China Antitrust Investigations: How to Respond to a SAMR Dawn Raid

The following is general information on Chinese antitrust law, not legal advice for any specific case. Investigations are fact-intensive and fast-moving; contact a qualified PRC lawyer immediately if your company is inspected.

The regulator and its inspection powers

China's antitrust enforcement is led by the State Administration for Market Regulation (SAMR), with provincial market-regulation bureaus acting under its authority. The governing statute is the Anti-Monopoly Law (反垄断法), comprehensively amended with effect from 1 August 2022. Under Article 47, investigators may enter the business premises of the undertaking concerned or other relevant premises, conduct inspections, question the legal representative and other relevant persons, consult and copy documents and materials, seize and seal relevant evidence, and inspect bank accounts. A dawn raid is precisely what it sounds like: an unannounced entry, a wide demand for documents and electronic data, and interviews of staff — usually without advance notice.

The practical consequence is that the first hours of an inspection shape the rest of the case. Evidence gathered on the day, statements made in interviews, and the company's conduct during the raid all feed into a potential penalty decision, so the response must be controlled from the moment the inspectors arrive.

The penalty structure: 1% to 10% of revenue, and more for obstruction

The 2022 amendments raised the stakes considerably. The main fine provisions:

• Monopoly agreements (Article 56) — fines of 1% to 10% of the undertaking's prior-year turnover, with an additional 5% or less surcharge for individuals involved; a leniency mechanism can reduce or eliminate the fine for the first party to report and provide material evidence.
• Abuse of dominant market position (Article 57) — the same 1% to 10% of prior-year turnover.
• Gun-jumping (Article 58) — implementing a concentration that should have been notified: up to 10% of prior-year turnover where the concentration has anti-competitive effects, or a fine of up to RMB 5 million where it does not.
• Obstruction (Article 62) — refusing or obstructing an inspection attracts its own penalty: up to 1% of turnover for the undertaking, and fines for the responsible individuals. Failing to provide, or destroying, evidence is independently sanctionable.
• Aggravation (Article 63) — for particularly serious violations with severe consequences or a bad social impact, the fine may be set at two to five times the base fine.

These percentages are applied to the relevant turnover figure under the rules published by SAMR and its predecessors, and the specific calculation follows official guidance — confirm the current basis with counsel rather than estimating from the statute alone.

The first hours: what to do when inspectors arrive

• Ask for credentials and the inspection notice. Verify the identity of the inspectors and the scope of the authorising document. Do not obstruct, but do confirm what you are being asked to provide and under what authority.
• Call counsel immediately and ask the inspectors to wait briefly for the lawyer to arrive. Cooperation does not mean answering substantive questions on the spot without advice.
• Designate one or two employees as the single point of contact. Everything the company says and hands over should go through a controlled channel, not through whoever happens to be at a desk.
• Do not delete, alter or destroy anything. Destruction of evidence is itself an offence and the act of deletion — including on personal devices and messaging apps — is routinely discoverable. A preservation instruction to all staff is the single most important compliance message of the day.
• Record what is taken. Keep a log of every document, device and file copied or seized, and request receipts for anything removed.

Leniency and commitments: the two exit routes

The 2022 law strengthens two mechanisms a company can use to shape the outcome. First, leniency under Article 56 rewards the first undertakings to report a monopoly agreement and provide material evidence, with progressively smaller benefits for later applicants. Timing is everything: a leniency application made after SAMR already holds the evidence is worth far less. Second, commitments under Article 53 allow an undertaking under investigation for suspected monopoly conduct (other than hard-core cartel conduct) to offer commitments to eliminate the effects of its conduct; if SAMR accepts, the investigation may be suspended. SAMR's published rules and guidance govern the procedure for both routes, and the eligibility details should be confirmed against the current regulations.

A third, preventive tool is the Antitrust Compliance Guidelines for Undertakings (经营者反垄断合规指南), most recently revised by SAMR in 2024. A genuine, documented compliance programme does not guarantee immunity, but it is a factor in how a violation and a penalty are assessed — and, more importantly, it is the difference between a raid that finds a controlled organisation and one that finds chaos.

What foreign companies should do now

• Have a raid response protocol before the raid happens. Named coordinators, a counsel hotline, a preservation instruction, and a clear rule that substantive questions go through counsel.
• Map your China exposure. Distribution agreements, pricing and rebate structures, exclusivity, information exchanges with competitors, and any concentration that may have crossed the notification thresholds are the documents investigators will ask for first.
• Remember that privilege works differently. China does not recognise attorney-client privilege in the common-law sense; documents held in the company's own files are generally available to investigators. Control what is created, where it is kept and what it says.
• Coordinate China and global responses carefully. An antitrust raid in China can trigger parallel exposure elsewhere, and statements made in one jurisdiction are often shared among agencies.

For the related field of regulatory investigation response, see China Corporate Criminal Liability: Compliance Programs for Multinationals, or contact us to discuss a specific investigation.