[5] Discretion must be exercised with caution, as judicial adjudication is key.

Compiled from: Jufa
 
Case review
Recently, litigation triggered by administrative authorities imposing the maximum statutory penalties for violations has attracted widespread attention and lively discussion across society. On April 14, 2020, the State Administration for Market Regulation decided to impose heavier penalties on three active pharmaceutical ingredient companies for abusing their dominant market position to engage in monopolistic practices, with total fines and confiscations amounting to RMB 325.5 million.

 
 

In three penalty decisions issued by the State Administration for Market Regulation, the company that played a leading role was fined 10 percent of its 2018 sales, the maximum penalty, and had more than 100 million yuan in illegal gains confiscated, resulting in a total of 252.7 million yuan in fines and confiscations. This marked the first time a company had received the maximum penalty since the Anti-Monopoly Law took effect on August 1, 2008. On December 15, 2020, China Court Trial Online livestreamed the court proceedings of the case, and the related video was viewed nearly 150 million times, which fully demonstrates the high level of public attention the case has attracted.
 
 
Relevant legal provisions
[4] Article 47 of the Antimonopoly Law
[5] Where an operator, in violation of the provisions of this Law, abuses its dominant market position, the antimonopoly enforcement agency shall order it to cease the illegal act, confiscate its illegal gains, and impose a fine of not less than 1% but not more than 10% of its sales revenue in the preceding year.
 
[6] Article 49 of the Antimonopoly Law
For the fines stipulated in Articles 46, 47, and 48 of this Law, the anti-monopoly enforcement agency shall, when determining the specific amount of the fine, consider factors such as the nature, severity, and duration of the illegal act.
 
Article 38 of the Administrative Penalty Law
Upon conclusion of the investigation, the head of the administrative agency shall review the findings and, based on the circumstances, make the following decisions:
(1) If there is indeed an illegal act subject to administrative penalty, an administrative penalty decision shall be made based on the severity and specific circumstances of the act;
(2) If the illegal act is minor and may be exempted from administrative penalty in accordance with the law, no administrative penalty shall be imposed;
(3) If the illegal facts cannot be established, no administrative penalty shall be imposed.
(4) If the illegal act constitutes a crime, it shall be transferred to the judicial authorities.
(5) For complex or major illegal acts that warrant a heavier administrative penalty, the responsible persons of the administrative agency shall make a collective decision through discussion.
 
 
[1] The author's perspective
One of the contentious issues in this case is that the penalized law enforcement target believes that the decision to impose the maximum severe penalty is excessively harsh and could potentially lead to the direct "demise" of the target due to the substantial fines. Article 38 of the Administrative Penalty Law does not provide specific provisions on how administrative organs should exercise their discretionary power. Special laws in various law enforcement fields generally offer highly generalized guiding provisions on discretionary power.

 
 

In practice, administrative agencies often formulate benchmarks or guidelines for the exercise of discretionary power in light of their own operational realities to guide agencies at all levels in performing their duties in accordance with the law and regulations. However, when reviewing an administrative agency’s decision to impose a heavier penalty, courts do not necessarily adopt the same approach as the administrative agency. In fact, a complete and effective set of judgment methods has gradually taken shape in judicial practice and has been recognized and accepted by most courts. A systematic review and summary of the prevailing practices in judicial practice is of significant practical importance for effectively resolving disputes, improving the efficiency of judicial adjudication, and ensuring “similar cases are decided alike.”