Landmark Crackdown on Investigation Obstruction by the Competition Authorities in Hong Kong and Mainland China

(A) Introduction

    Non-compliance with competition authorities’ investigation powers is a serious offence in both Hong Kong and Mainland China, as highlighted by two high-profile enforcement actions in May 2025.

    On 16 May 2025, the Jiangsu Provincial Administration for Market Regulation imposed penalties on a pharmaceutical firm and its staff for violently refusing and obstructing an antitrust investigation. [1]

        Just 11 days later, on 27 May 2025, the Hong Kong Competition Commission (the “Commission”) brought a case before the Eastern Magistrates' Courts for mention, where an individual was charged under Section 52(1)(b) of the Competition Ordinance (the “Ordinance”) for failing to comply with a requirement.[2]

(B) Hong Kong’s First Criminal Case: Failure to Attend Investigation before the Commission

        In Hong Kong, offences in relation to investigations are set out in Sections 52-55 of the Ordinance.[3]

Section	Offence Description	Penalties
52	Without reasonable excuse, failure to comply with requirement or prohibition imposed on that person under— (a) section 41 (Powers to obtain documents and information); (b) section 42 (Persons may be required to attend before Commission); (c) section 43 (Statutory declaration regarding evidence); or (d) section 50 (Powers conferred by warrant)	Indictment: $200,000 + imprisonment for 1 year Summary: fine at level 5 (i.e. $50,000) + imprisonment for 6 months
53	(1) Intentionally or recklessly destroying, disposing, falsifying or concealing requested documents under section 41 (Powers to obtain documents and information) or section 50 (Powers conferred by warrant) (2)   Causing/permitting such actions	Indictment: $1,000,000 + imprisonment for 2 year Summary: fine at level 6 (i.e. $100,000) + imprisonment for 6 months
54	Obstruct any person exercising a power under a warrant issued under section 48 (Warrant to enter and search premises)	Indictment: $1,000,000 + imprisonment for 2 year Summary: fine at level 6 (i.e. $100,000) + imprisonment for 6 months
55	Providing false or misleading documents or information to the Commission	Indictment: $1,000,000 + imprisonment for 2 year Summary: fine at level 6 (i.e. $100,000) + imprisonment for 6 months

        In June 2023, following an earlier operation in December 2022, the Commission conducted another joint operation under its ongoing investigation codenamed “White Whale” with the Police and the Immigration Department.[4]  During an investigation into alleged anti-competitive conduct including market sharing among wholesalers at the Aberdeen Wholesale Fish Market, the Commission exercised its investigation powers under Section 42 of the Ordinance to require an individual to attend an interview at its office. However, he failed to attend as required. The Commission subsequently referred the case to the Police for criminal investigation. 

        On 27 May 2025, the case was brought before the Eastern Magistrates' Courts for mention, where the individual was charged with one count of failure to comply with a requirement or prohibition, in contravention of Section 52(1)(b) of the Ordinance.[5]

(C) Mainland China’s Warning: Jiangsu’s Record Fines for Pharma Sector Obstruction

        The pharmaceutical industry has been an enforcement priority for the anti-monopoly authority in the Mainland China. Following the Anti-Monopoly Guidelines for the Pharmaceutical Field published on 23 January 2025[6] and two cases in pharmaceutical sector on 19 March 2025[7] and 9 May 2025[8], the anti-monopoly authority issued another decision targeting investigation obstruction in the pharmaceutical sector.[9]

        On 30 November 2023, during an investigation conducted by Jiangsu Provincial Administration for Market Regulation into Sichuan Xieli Pharmaceutical Co., Ltd. (“Sichuan Xieli”), employees of Sichuan Xieli severely obstructed the investigation. Sichuan Xieli’s legal representative, Zhang, initially verbally pledged cooperation but then falsely claimed that key employees Wan and Hu were absent. Despite repeated instructions from officers not to leave the premises, Zhang forcibly departed. An individual assisting Zhang's escape caused an officer’s hand to be crushed. Subsequently, Wan led a group (consisting of Yin (i.e. another staff of Sichuan Xieli),  Wang and Jia (i.e. employees of Sichuan Difeite Pharmaceutical Co. Ltd. (“Sichuan Difeite”)), to violently storm the conference room and forcibly seize a laptop that officers were preparing to inspect. When officers intervened, these individuals physically restrained, shoved, and pushed officers, ultimately throwing the laptop from the sixth floor in an attempt to destroy evidence.

        After that, during the hearing held on 13 January 2025, the parties alleged that they had cooperated with the officers and denied engaging in any obstruction or resistance of the antitrust investigation. However, the authority rejected these arguments and found that the circumstances of this case were particularly serious, the effects particularly adverse, and the consequences particularly serious. 

        Pursuant to Article 62 of the Anti-Monopoly Law (2022 Amendment), the authority ordered Sichuan Xieli to rectify its violations and imposed a fine of 0.8% of its 2022 sales revenue, amounting to RMB 2,790,713.49. In addition, the authority imposed  penalties on six individuals involved in the obstruction:

(1)   Zhang (legal representative of Sichuan Xieli): RMB 400,000

(2)   Wan (key employee of Sichuan Xieli): RMB 400,000

(3)   Yin (employee of Sichuan Xieli): RMB 200,000

(4)   Wang (employee of Sichuan Difeite): RMB 200,000

(5)   Jia (employee of Sichuan Difeite): RMB 200,000

(6)   Fu (employee of Sichuan Difeite): RMB 200,000

        This case significantly demonstrates the authority’s robust approach to conducting investigations into companies (in particular, active pharmaceutical ingredient (API) enterprises), prevent and restrain monopolistic conducts. The penalty imposed on Sichuan Xieli, Zhang and Wan approach the statutory maximums of "less than 1% of prior-year sales" and “RMB 500,000” reflecting the authority’s zero-tolerance stance against violent obstruction of law enforcement.

(D) Key Takeaway

        The above cases highlight intensified enforcement by competition authorities in Hong Kong and Mainland China. Hong Kong now pursues criminal charges for procedural non-compliance. Mainland China imposes heavy fines for obstruction of investigations with the pharmaceutical sector under heightened scrutiny.

        Companies should focus on three pillars: “Preparation”, “Protocol” and “Practice”. First, they should proactively prepare for investigations by establishing a designated response team. Next, they should establish clear step-by-step protocol for handling investigations and dawn raids. Finally, they should train their directors and employees to follow the protocols through regular mock raids and crisis scenario role-playing.

 

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[1] https://www.samr.gov.cn/zw/xzcfjd/art/2025/art_63b9fd12be8d4878a4edd236fe5c364e.html

[2] https://www.compcomm.hk/en/media/press/files/Failure_to_comply_PR_EN.pdf

[3] https://www.elegislation.gov.hk/hk/cap619?xpid=ID_1438403535438_002

[4] https://www.compcomm.hk/en/media/press/files/Fishmarket2023_PR_EN.pdf

[5] https://www.compcomm.hk/en/media/press/files/Failure_to_comply_PR_EN.pdf

[6] https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/xwxcs/art/2025/art_683fdb0f0a7e434aab0b1708f9079422.html

[7] https://www.samr.gov.cn/zw/xzcfjd/art/2025/art_ec45728ff1b049ec9ed8b52765685888.html

[8] https://scjg.tj.gov.cn/tjsscjdglwyh_52651/xwdt/xzcfxxgs/sjxzcfxx/202505/t20250509_6927854.html; https://scjg.tj.gov.cn/tjsscjdglwyh_52651/xwdt/xzcfxxgs/sjxzcfxx/202505/t20250509_6927863.html; https://scjg.tj.gov.cn/tjsscjdglwyh_52651/xwdt/xzcfxxgs/sjxzcfxx/202505/t20250509_6927870.html; https://scjg.tj.gov.cn/tjsscjdglwyh_52651/xwdt/xzcfxxgs/sjxzcfxx/202505/t20250509_6927878.html

[9] https://www.samr.gov.cn/zw/xzcfjd/art/2025/art_63b9fd12be8d4878a4edd236fe5c364e.html