Procedural Rights in Competition Law Proceedings: Ex Post Proceedings

See Arts. 9 and 10 AML.

http://​jjs.​ndrc.​gov.​cn/​jgsz/​default.​html; provincial pricing authorities are responsible for performing anti-monopoly enforcement in their respective jurisdictions under the authorisation of the NDRC or with regard to specific cases designed to them by the NDRC. Art. 3 Procedural Requirements on Anti-Monopoly-Pricing Administrative Enforcement.

http://​www.​saic.​gov.​cn/​fldyfbzdjz/​jgsz/​; Provincial Industry and Commerce Administrations are responsible for the anti-monopoly enforcement in their respective jurisdictions under the authorisation of the SAIC or with regard to specific cases designed to them by the SAIC. Art. 3 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions. Corresponding to the address of “local government anti-monopoly enforcement agencies”, the NDRC and SAIC are referred to collectively as “State Council anti-monopoly enforcement agencies” or SCAMEAs.

See Art. 26 Procedural Requirements for Industry and Commerce Administrations on Investigation and handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions: “where no procedural provision herein is applicable to the investigation, hearing or penalty of any monopoly conduct, relevant provisions of the Administrative Penalty Law of the People’s Republic of China, the Administrative Penalty Procedural Requirements for Industry and Commerce Administrations and the Rules for Industry and Commerce Administrations on the Hearing of Evidence in Administrative Penalty Cases shall apply…”; Art. 24 Procedural Requirements on Anti-Monopoly-Pricing Administrative Enforcement: “where no procedural provision herein are applicable to the investigation or administrative penalty of any monopoly conduct, the Administrative Penalty Law of the People’s Republic of China shall apply”.

For convenience’s sake, unless otherwise specified, “undertaking(s)” herein referred to shall include associations of undertakings.

Art. 4 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

The high-profiled case involving the Telecom’s and the Unicom’s suspected monopoly conducts, for example, is sourced from reports. See “Anti-monopoly Investigation into Telecom and Unicom Resulting from Reports”, available at http://​it.​sohu.​com/​20111110/​n325101934.​shtml. Similarly, the first monopoly agreement case handled by the Administration for Industry and Commerce was also derived from reports. See “First Anti-monopoly Enforcement Case Handled by China’s Industry and Commerce Administration Closed”, Legal Daily, 3 March 2011; also available at http://​news.​xinhuanet.​com/​legal/​2011-03/​03/​c_​121141853_​2.​htm.

Wang (2011), p. 339.

See Art. 11 Contract Law.

Art. 5 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

Art. 6 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

Arts. 6 and 7 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

Arts. 5 and 3 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement.

See Art. 54 AML.

Art. 3 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement; Art. 3 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

Presently, the SAIC has authorised Jiang Su, Jiang Xi, Chong Qing, Zhe Jiang and other provinces or cities to carry out investigations into 16 cases involving monopolisations, with 1 involving abuse of dominant market position and 15 monopoly agreements, and penalty decisions have been made in 4 of them. See “SAIC Initiating Investigation into 16 Cases involving monopolizations”, Legal Daily, 13 August 2012, also available at http://​www.​legaldaily.​com.​cn/​index/​content/​2012-08/​13/​content_​3767568.​htm?​node=​20908.

See Art. 19 Administrative Penalty Procedural Requirements for Industry and Commerce Administrations: “If a case-filing is denied with regard to a report, complaint or appeal, the case-handling section under the Industry and Commerce Administration shall notify the complainant, reporter or appellant of such result after it has been approved by the principal officer of the Industry and Commerce Administration. The Industry and Commerce Administration shall keep a written record on the relevant circumstances about the denial of a case-filing.”

Art. 6 Administrative Reconsideration Law: “Citizens, legal persons or other organizations may, pursuant to this law, apply for administrative reconsideration under any of the following situations: … (9) failure by administrative agencies to perform statutory duties, as applied for, in protecting one’s personal right, property right or the right to education according to laws; …”; Art. 12 Administrative Litigation Law: “The people’s court shall accept suits brought by citizens, legal persons or other organizations against any of the following administrative acts: … (5) refusal by administrative agencies to perform statutory duties, as applied for, in protecting one’s personal right, property right or other legitimate rights, or failure to respond to such application…”

For example, in the first monopoly agreement case handled by the ICA, the agency, after obtaining the Industry Self-discipline Clauses of Pre-Mixed Concrete Enterprises, hard copy of “Rules on Inspection and Punishment” and the association’s meeting summary about the division of works, raided the Concrete Committee’s office and collected on-spot evidence, in which action complete electronic statistics submitted by enterprises to the association were discovered, evidence materials such as meeting minutes and sales contracts were collected and two books of detailed notes on the Concrete Committee’s activities were seised on-spot. See “First Anti-monopoly Enforcement Case Handled by China’s Industry and Commerce Administration Closed”, Legal Daily, 3 March 2011, available at http://​news.​xinhuanet.​com/​legal/​2011-03/​03/​c_​121141853.​htm.

Wang Xuezheng, former Regulations Director of the SAIC, holds that the anti-monopoly agency’s entry power shall refer to the power to enter the suspected violator’s residence or business place, seemingly equating the suspected violator’s residence to its business place. See “Anti-monopoly Agencies’ Investigative Powers (II)”, China Industry and Commerce, 3 February 2009. But it is still unclear whether the private residences of directors, managers or other relevant personnel are included.

Art. 7 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement.

Art. 5 Administrative Coercive Measures Law provides that administrative coercive measures shall be set and implemented as appropriate; where there is non-enforcing means by which administrative object can be achieved, no enforcement measures shall be set or implemented.

See Art. 20 Regulation No. 1/2003. See also Wang (2011), p. 340.

See Art. 7 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement; Art. 24 Administrative Penalty Procedural Requirements for Industry and Commerce Administrations.

It is similarly provided by Art. 37 Administrative Penalty Law that the administrative agency shall have not less than two enforcement staff members to conduct investigation or inspection, who shall show their credentials to the party or other persons concerned; the party or other persons concerned shall answer questions truthfully and assist, instead of obstruct, the investigation or inquiry. A record shall be made on the investigation or inquiry.

Art. 20 Administrative Penalty Procedural Requirements for Industry and Commerce Administrations.

In addition to the business-secret-protection obligations mentioned in Art. 41 AML, there are also similar rules or considerations for protecting the confidentiality of undertakings’ business secrets in the course of review, conclusion, as well as administrative reconsideration or legal proceedings.

As compared with the AML, the EU competition law imposes even heavier penalties. See Art. 23 Regulation 1/2003 and Wang (2011), p. 341.

See Wang (2011), p. 340.

China so far does not have an inclusive (general) administrative law, and relevant principles and spirits are scattered in some special administrative legislation, such as the Administrative Penalty Law, Administrative License Law and Administrative Coercion Law. In its “Implementation Outline for the Comprehensive Advancement of Law-based Administration” (22 March 2004), the State Council put forward six requirements for law-based administration: lawful administration, reasonable administration, due procedures, high efficiency and convenience, good faith, consistency of powers and responsibilities.

Art. 12 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

For example, relevant market definition, market competition assessment, barriers to entry, decisions on market dominance and impact on competition are all based on substantial amount of information.

Art. 14 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

The Criminal Procedural Law (as revised and re-promulgated 14 March 2012, effective 1 January 2013), Art. 50, provides that “… Nobody shall be forced to give evidence which may incriminate himself….”. A Monopoly-offence-related provision existing under the Criminal Law is Art. 223 on bid rigging.

Art. 29 Administrative Penalty Law provides that where an illegal conduct is not discovered within 2 years of its commission, an administrative penalty shall no longer be imposed, except as otherwise prescribed by law. That period of time shall be counted from the date the illegal act is committed; if the act is of a continual or continuous nature, it shall be counted from the date the act is terminated. Since the AML neither specifies the time limit of pursuing legal liability against monopoly act nor does it provide that legal liability against monopoly conduct shall be pursued without any time limit, the Administrative Penalty Law shall apply.

See Art. 58 Administrative Penalty Procedural Requirements for Industry and Commerce Administrations: “Where the industry and commerce administration makes a decision concerning a complaint, appeal or report, to impose or not to impose an administrative penalty on the alleged offender, to close the case, or to refer the matter to other competent agencies, it shall notify the respondent and the named complainant, appellant or reporter, as the case may be.”

Wang (2009).

Arts. 16 and 17 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

Arts. 18 and 19 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions; Art. 22 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement.

Arts. 15–18 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement.

See Art. 20 Regulation No. 1/2003. See also Wang (2011), p. 342.

Art. 18 Administrative Coercion Law.

See Art. 20 Regulation No. 1/2003. See also “Anti-monopoly Law – Code Expoundation and Theoretical Origin Exploration”, compiled by Shi (2008), pp. 405–406.

Wang (2011), p. 342.

See Art. 41 Administrative Penalty Law.

For example, in the first monopoly agreement case handled by the ICA, the enforcement agency reviewed and considered the presentations and arguments asking for mitigation or exemption of penalties submitted by the parties. See “First Anti-monopoly Enforcement Case Handled by China’s Industry and Commerce Administration Closed”, Legal Daily, 3 March 2011; also available at http://​news.​xinhuanet.​com/​legal/​2011-03/​03/​c_​121141853.​htm.

See Art. 32 Administrative Penalty Law.

Art. 6(3) Rules for Industry and Commerce Administrations on the Hearing of Evidence in Administrative Penalty Cases states that “where fines exceeding 3000 RMB are proposed to be imposed on citizens or those exceeding 3000 RMB on legal persons or other entities, the parties shall be informed of the right to a hearing”. And Arts. 46 and 47 AML separately set relatively large fines for anti-monopoly agreements and abuses of dominant market position. For example, in the first monopoly agreement case handled by the ICA, the industry association concerned was fined 200,000 RMB, and 5 participating undertakings was fined aggregately 530723.19 RMB. “First Anti-monopoly Enforcement Case Handled by China’s Industry and Commerce Administration Closed”, Legal Daily, 3 March 2011; also available at http://​news.​xinhuanet.​com/​legal/​2011-03/​03/​c_​121141853_​2.​htm.

Wang (2011), p. 345.

For example, in a monopoly agreement case in the Liaoning building material market in which penalties have recently been imposed, it was through 17 months’ investigation into nearly 60 building companies and after sufficient deliberation that Liaoning’s industrial and commercial administration has made the decision of administrative fines of more than 15,000,000 RMB on 1 industry association and 13 companies involved. “SAIC initiated investigations into 16 cases involving monopolizations”, Legal Daily, 13 August 2012, available at http://​www.​legaldaily.​com.​cn/​index/​content/​2012-08/​13/​content_​3767568.​htm?​node=​20908; the first monopoly agreement case handled by the ICA, from its being formally filed on 14 November 2009 to its conclusion in February 2011, took approximately 15 months. See “First Anti-monopoly Enforcement Case Handled by China’s Industry and Commerce Administration Closed”, Legal Daily, 3 March 2011; also available at http://​news.​xinhuanet.​com/​legal/​2011-03/​03/​c_​121141853.​htm. Both cases took time longer by far than the 90 day’s time limit set by the Administrative Penalty Procedural Requirements for Industry and Commerce Administrations.

Art. 22 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement.

Art. 23 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions. That Article also states that provincial ICAs shall, within 10 working days of adopting a decision, submit related situations, written decision and report on the conclusion of investigation to the SAIC for filing. Additionally, according to Art. 22 of the Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement, government pricing authorities of provinces, autonomous regions or municipalities directly under the Central Government shall, with respect to the case they handled, within 10 working days of adopting a decision, submit related situations, reports on the conclusion of the investigation, as well as written decisions on the termination of the investigation and written decisions of administrative penalty to the State Council Pricing Authority for filing.

“Official in Charge of the Competition Enforcement Bureau under SAIC Answering Questions Asked by Reporter of China Industry and Commerce on the Adoption of the AML’s two Supporting Regulations”, available at http://​www.​saic.​gov.​cn/​ywdt/​gsyw/​sjgz/​fld/​200906/​t20090608_​61154.​html.

See Art. 38 Administrative Penalty Law; Art. 45 Administrative Penalty Procedural Requirements for Industry and Commerce Administrations.

Wang Xuezheng, former Regulations Director of the SAIC, holds that where an illegal conduct is not established or is obviously trivial so that the party shall be exempted from penalty, a decision to that effect shall be made in accordance with procedures. “The Termination and Conclusion of Case Investigation”, China Industry and Commerce, 26 January 2010, available at http://​www.​saic.​gov.​cn/​gsld/​llyj/​xxb/​201001/​t20100126_​79724.​html; see also Art. 38 Administrative Penalty Law.

Art. 14 Prohibitions of Industry and Commerce Administrations on Monopoly Agreement Practices.

Art. 14 Prohibitions of Industry and Commerce Administrations on Monopoly Agreement Practices; Art. 14 Prohibition of Industry and Commerce Administrations on abuses of dominant market position.

Art. 14 Procedural Requirements on Anti-Monopoly Pricing Administrative Enforcement.

Arts. 12 and 14 Prohibition of Industry and Commerce Administrations on Monopoly Agreement Practices.

Art. 20 Procedural Requirements for Industry and Commerce Administrations on Investigation and Handling of Cases involving Monopoly Agreements and Abuses of Dominant Market Positions.

Wang (2011), p. 347.

See “SAIC Initiated Investigation into 16 Cases Involving Monopolizations”, Legal Daily, 13 August 2012, available at http://​www.​legaldaily.​com.​cn/​index/​content/​2012-08/​13/​content_​3767568.​htm?​node=​20908.

See Art. 30 EU Regulation 1/2003, and Wang (2011), p. 347.

See generally Art. 23 Administrative Reconsideration Law.

See Art. 20 Administrative Reconsideration Law.

See Art. 14 Administrative Reconsideration Law.

See Arts. 15–16 Administrative Litigation Law.

The party may bring a lawsuit before the People’s Court within 15 days of receiving the written administrative reconsideration decision. Where the administrative reconsideration agency fails to make a decision within the time limit fixed by law, the applicant may bring a lawsuit before the People’s Court within 15 days after the expiration of the time limit. Where the party directly brings a lawsuit against an administrative act, he shall do so within 6 months of becoming aware of the act. See Arts. 45–46 Administrative Litigation Law.

See Art. 31 Administrative Litigation Law.

Wang (2011), p. 338.

Art. 73 Certain Provisions on Evidence in Civil Proceedings promulgated by the Supreme People’s Court provides that “where the parties raise contradictory evidences regarding the same fact and neither party has adequate grounds to negate the other party’s evidence, the People’s court shall based on the circumstances of the case, determine whether the strength of one party’s evidence is obviously greater than that of the others, and confirm that with greater strength accordingly”, resembling the standard of “high probability”.

Art. 4 State Compensation Law: “Where an administrative agency or its personnel commit any of the following infringements upon property rights when performing its administrative functions, the aggrieved person have the right to recover damages: (1) illegally imposing an administrative penalty, such as fining, revoking a permit or license, ordering production or business operation to be suspended or confiscating properties; (2) illegally taking an administrative coercive measure, such as sealing up, detaining or freezing property; (3) illegally expropriating or requisitioning properties; or (4) other illegal acts causing damage to properties.”

See Article of the Supreme People’s Court’s Explanation on Certain Issues in the Implementation of the Administrative Litigation Law of the Peoples Republic of China: “Where any citizen, legal person or other entity which has a legal interest in the specific administrative act is dissatisfied with the act, he/it may bring an administrative suit according to law.”

Wang (2011), p. 338.