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Antitrust in China: An Overview of Recent Implementation of Anti-Monopoly Law

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Abstract

Since China’s first comprehensive competition statute, the Anti-Monopoly Law (AML), took effect on 1 August 2008, Chinese competition enforcement authorities have enacted secondary legislation on merger review. Very recently, rules against monopoly agreements and abuse of dominance have also been adopted. This framework ensures that China’s antitrust regime now operates with a degree of transparency and predictability. The AML addresses three broad categories of monopolistic conduct by business operators: monopoly agreements, abuse of dominance, and anti-competitive concentrations. This paper aims to analyse the latest enforcement developments in these three broad areas upon the three-year anniversary of the AML. Like most Chinese laws, the AML emphasises administrative enforcement over judicial enforcement. On the one hand, the author includes some meaningful studies on selected landmark decisions on merger control published so far by the Ministry of Commerce of China, and, on the other hand, focuses on the judicial enforcement by People’s Courts through private actions for antitrust-type claims for damages.

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References

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  33. The old version of the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors of 2006 prescribed, in Article 54, that the parties may apply for exemption from merger review under any of the following circumstances: (1) the takeover may improve the conditions for fair competition in the market; (2) a loss-making enterprise is taken over and employment is ensured; (3) the takeover helps the absorption of advanced technologies and the improvement of management personnel and is able to improve the enterprise’s international competitiveness; or (4) the takeover may improve the environment. However, this article was deleted in the 2009 revision.

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  53. Article 14(1) of the Price Law, 29 December 1997, provides that ‘business operators may do nothing whatsoever in the following ways that amounts to abnormal price behaviour: 1. To work collaboratively with others to control market prices to the great detriment of the lawful rights and interests of other business operators or consumers’.

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  55. The Anti-price Monopoly Regulation released by NDRC, which entered into force on 1 February 2011, was elaborated in accordance with the AML.

  56. Article 226 of the Criminal Law of China, adopted on 14 March 1997 and revised on 29 June 2006, provides that a person who, by means of violence or threat, buys or sells a commodity, or forces others to provide or accept services, shall be sentenced to fixed-term imprisonment of not more than three years and concurrently or independently, to a fine, if the circumstance is serious.

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  58. Article 46(2) AML.

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  74. Tangshan Renren alleged that Baidu had abused its dominant position and provided the court with two press reports in respect of the defendant’s market position. The court held that the evidence was limited and that the plaintiff failed to provide sufficient evidence regarding calculation methods, measures and relevant data, which could have led to a more objective analysis. For a detailed analysis, see R. Ian McEwin and Corinne Chew, ‘Notable Antitrust Cases: China — The Baidu Decision’, 6 Competition Policy International (2010) pp. 223–232: ‘It seems, from the limited evidence tendered that the plaintiff’s lawyers may have lacked experience in defining relevant markets for competition law purposes’.

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  77. Article 1 AML states: ‘This Law is enacted for the purpose of preventing and restraining monopolistic conduct, protecting fair competition, enhancing economic efficiency, safeguarding the interests of consumers and the interests of the society as a whole, and promoting the healthy development of socialist market economy’. (The English translation of the AML is provided by the National People’s Congress and can be found at: <http://law.npc.gov.cn:87/home/begin1.cbs>, document reference no. 269577).

  78. This regulation was revised in 2009 to replace the earlier versions of 2003 and 2006, which exclusively governed takeovers of domestic enterprises by foreign investors. More specifically, some provisions concerning merger review in the predecessors to the 2009 version were removed. The 2009 amendment aimed to ensure consistency with the AML and the Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings.

  79. This guideline is only available in Chinese and can be found at: <http://fldj.mofcom.gov.cn/aarticle/xgxz/200902/20090206034057.html>.

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Authors and Affiliations

  1. Institute for Advanced Legal Studies of the Faculty of Law, University of Macau, China

    Dan Wei PhD in Law from the University of Coimbra (Associate Professor and Director, Editor-in-Chief of the Macau Law Review)

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  1. Dan Wei PhD in Law from the University of Coimbra
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Correspondence to Dan Wei PhD in Law from the University of Coimbra.

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Wei, D. Antitrust in China: An Overview of Recent Implementation of Anti-Monopoly Law. Eur Bus Org Law Rev 14, 119–139 (2013). https://doi.org/10.1017/S1566752912001061

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