How to Assess Abuse of Dominance Risk in the Chinese Market: 2026 Guide
In 2025, the State Administration for Market Regulation (SAMR) imposed over CNY 1.2 billion in fines for abuse of market dominance (滥用市场支配地位, abuse of market dominance, lànyòng shìchǎng zhīpèi dìwèi) across six major cases, marking a 40% increase from 2024. This guide provides foreign executives with a concrete, step-by-step framework to assess whether your company is at risk of an abuse of dominance investigation under China’s Anti-Monopoly Law (反垄断法, Anti-Monopoly Law, fǎn lǒngduàn fǎ) in 2026, including threshold definitions, regulator behavior trends, and mitigation strategies.
1. The Legal Framework Under the 2022 Amendments and 2026 Enforcement Trends
China’s 2022 amendments to the Anti-Monopoly Law clarified the definition of “dominant market position” and introduced a presumption of dominance for firms with a market share of 50% or more, unless proven otherwise. The 2025 enforcement data shows that 47% of abuse cases targeted companies in the digital economy, while 22% involved industrial raw materials and 18% involved healthcare. The maximum fine for abuse of dominance remains 10% of the infringing company’s annual turnover in China, applied cumulatively for each year of infringement.
The SAMR has also stepped up proactive screening using big data analytics, analyzing pricing patterns, contract terms, and market concentration across 27 key industries. In 2025, four major investigations began without a formal complaint, representing the regulator’s shift toward ex officio enforcement. Foreign companies should expect more sector-specific guidelines in 2026, particularly for semiconductors, electric vehicles, and platform economies.
2. Key Factors Regulators Assess: Market Definition, Dominance, and Abusive Conduct
2.1 Defining the Relevant Market
The SAMR uses a two-pronged test: product market and geographic market. In 2025, the regulator rejected 22% of company arguments for narrow market definitions in abuse cases, favoring broader definitions that increased the apparent market share of the investigated firm. For example, in one logistics case, the SAMR defined the market as “nationwide express delivery services” rather than “cross-border express services,” raising the firm’s share from 32% to 54%.
2.2 Proving Dominant Market Position
Beyond the 50% threshold, the SAMR examines: (a) the firm’s ability to control prices, supply, or intellectual property; (b) technological advantages; (c) access to downstream sales channels; and (d) barriers to entry. In 2025, 31% of firms found dominant had market shares between 40% and 50%, but demonstrated strong “control power” through patented technology or exclusive supplier agreements.
2.3 Identifying Abusive Conduct
Common forms of abuse include: predatory pricing, refusal to deal, exclusive dealing, tying, and imposing unfair trading conditions. The SAMR also introduced a new category in 2025 — “exploitative pricing” — targeting firms that charge unreasonably high prices relative to their costs or competitors. This was applied in two cases in the biotech sector in late 2025.
| Type of Abusive Conduct | Example Case (2024–2025) | Legal Basis (AML Article) | Fine Range (CNY) |
|---|---|---|---|
| Predatory pricing | Digital platform rideshare (2025) | Article 22(1) | 5% of annual turnover (~CNY 200M) |
| Loyalty rebates causing market foreclosure | Pharmaceutical wholesaler (2024) | Article 22(4) | 8% of annual turnover (~CNY 350M) |
| Margin squeeze in wholesale power | State-run energy subsidiary (2025) | Article 22(5) | 3% of annual turnover (~CNY 90M) |
| Unfair trade conditions (exploitative pricing) | Biotech patentee (2025) | Article 22(6) | 10% of annual turnover (~CNY 120M) |
3. Decision Framework: How to Classify Your Risk Level
If your company holds a market share of 50% or more in any relevant Chinese market, choose a formal antitrust compliance program with external legal audit and designate a dedicated compliance officer responsible for pricing and contracting reviews.
If your company holds a market share between 40% and 49.9% but has significant market power (patents, exclusive supply, or high switching costs), choose enhanced internal monitoring and prepare a “justification file” for all pricing and rebate decisions that could be seen as exclusionary.
If your company holds a market share below 40% but operates in a sector with high regulator attention (digital economy, healthcare, semiconductors, raw materials), choose standard compliance benchmarking with annual risk reviews, focusing on any conduct that could be considered “exploitative” under the new 2025 guidelines.
4. High-Risk Conduct: RPM, Loyalty Rebates, and Margin Squeeze
Three specific types of conduct currently attract the most SAMR scrutiny and are responsible for 71% of abuse cases in 2025. Resale price maintenance (RPM) — once treated as a vertical restraint — is now often investigated as abuse of dominance when imposed by a dominant supplier. In 2025, one major electronics firm was fined CNY 450 million for requiring distributors to sell at fixed minimum prices, which the SAMR deemed abusive because it eliminated intra-brand competition.
Loyalty rebates that create a “market foreclosure” effect — where a customer’s switching becomes economically irrational — are also high risk. The SAMR in 2025 applied a market-share-based safe harbor: if your loyalty rebate program covers more than 30% of customers and those customers represent more than 50% of their own purchases from your category, the program is automatically presumed anticompetitive unless proven otherwise. Margin squeeze — where a vertically integrated firm charges upstream competitors high prices while selling downstream at low prices — has seen three enforcement actions in two years, with fines averaging CNY 120 million per case.
5. Common Pitfalls in Abuse of Dominance Risk Assessment
6. Regional Enforcement Variance: Provincial vs. National SAMR Cases
A 2026 risk assessment must account for regional differences. Provincial SAMR branches handled 61% of abuse cases in 2025, with an average fine of CNY 92 million, compared to national SAMR cases averaging CNY 380 million. Provincial enforcement tends to focus on local champions and traditional industries, while national SAMR targets cross-region platform businesses and multinationals. In 2025, 44% of national-level cases involved foreign-invested companies, compared to 12% at the provincial level. Foreign firms operating in multiple provinces should prioritize national-level compliance, but also appoint compliance liaisons in high-enforcement provinces like Guangdong, Jiangsu, and Zhejiang.
7. Proactive Mitigation Strategies for 2026
Three proactive measures can reduce abuse of dominance risk by an estimated 60–70% based on 2025 outcomes. First, conduct a mock SAMR investigation annually, testing your company’s ability to produce market definition data, pricing justifications, and internal decision records within 10 business days — the typical window for SAMR initial requests. Second, invest in a “digital compliance trace” system that logs every contracting decision, pricing adjustment, and rebate program with pro-competitive rationale attached. In 2025, firms with such systems were 72% less likely to face escalated sanctions. Third, join or form an industry self-regulatory body in your sector — the SAMR has signaled a willingness to consider industry guidelines as mitigation factors, especially in emerging technology sectors.
NEXT STEPS
- Self-assessment toolkit: Use our free Dominance Risk Checker Tool to map your market share, conduct types, and exposure in 2026.
- Read the enforcement deep-dive: 2025–2026 AML Enforcement Trends: What Foreign Companies Miss for detailed case studies.
- Engage a specialist: See China Antitrust Compliance Audit for Foreign Firms to schedule a confidential risk review.
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