By Chenying Zhang –
Public enforcement, which played an important role in the China Anti-Monopoly system, faces some challenges, including wide discretion of fines, different application and understanding of rules, and few confiscations of illegal gains. China drafted guidelines on calculating the illegal gains and fines to resolve these issues. The guidelines take a profit-based criterion to calculate illegal gains, using the difference between the results generated in reality and in an assumed competitive situation. The guidelines propose the “three-step calculation” to determine fines: first, determine the sales in the preceding year; second, determine the basic fine percentage based on the nature of monopolistic conduct and duration; third, adjust the rate based on the degree of illegality.