China announced that it was sanctioning LG Corp., Samsung Electronics Co. Ltd., and four Taiwanese companies $56 million for fixing liquid crystal display panel prices. This sanction marks China’s entry into the global cartel enforcement scene, and shows that despite lingering questions about just how leniency process works in China, multinational companies can no longer ignore China when it comes to seeking leniency for price-fixing schemes.
In 2008,China’s Anti-Monopoly Law (“AML”) created China’s merger control regime at the Ministry of Commerce and gave China’s National Development and Reform Commission and another agency authority to pursue other kinds of anti-competitive conduct. The country has also had another measure since 1997 called the Price Law, which covers price-fixing and a variety of other behavior, but the government has only rarely applied the measure to major foreign companies. It was that law that the NDRC used to fine the LCD makers for fixing LCD panel prices from 2001 to 2006.
The Price Law doesn’t specifically lay out the possibility that companies can win leniency by coming forward with information about a price-fixing plot, though it does give the government some leeway in assessing fines that range from one to five times the illegal gains. The AML explicitly allows full or partial immunity for those who report illegal conduct to the government. Although China does seem to have some leniency measures in place, it still lacks the kind of clear-cut explanations of the leniency process offered by regulators in the U.S. and EU, and regulators have considerable discretion as to whether to grant leniency to those who seek it.