CHINA: NEW ANTI-MONOPOLY LAW

The Anti-Monopoly Law of China is promulgated on 30 August 2007, and shall be effective as of 1st August 2008.

The table of content of the Law is as follow:

• Chapter I General Provisions
• Chapter II Monopoly Agreement
• Chapter III Abuse of Dominant Market Position
• Chapter IV Concentration of Business Operators
• Chapter V Abuse of Administrative Power to Eliminate or Restrict Competition
• Chapter VI Investigation into Suspicious Monopolistic Conduct
• Chapter VII Legal Liabilities
• Chapter VIII Supplementary Provisions

With respect to the general provisions of the first chapter, there are three kinds of anti-monopoly activities which are Monopoly Agreement, Abuse of Dominant Market Position and Concentration of Business Operators. The responsibility of different actors is prescribed, such as that of the business operators, the associations of business operators, and the organs of administration. The State Council shall establish an Anti-monopoly Committee, which is responsible for organizing, coordinating and guiding the anti-monopoly work.

The second, the third and the fourth chapters prescribe three kinds of anti-monopoly activities:

1. Six kinds of monopoly agreements are prohibited, concerning mainly the price of commodities, the quantity of commodities, the division of market and the boycott of transactions. There are also some circumstances under which the monopoly agreement shall be exempt from this Law.
2. Several kinds of acts may fall into the scope of Abuse of Dominant Position. The law gives a list, mainly concerning the price of commodities and the choice of trade partners. The law also prescribes some factors to be considered to determinate the dominate position, such as the share of market. Under certain circumstances, the dominate position can also be presumed except that the business operator provides opposite evidence.
3. The merger of business operators and the acquisition of control by a business operator over other business operators can be considered as concentration of business operators. Business operators shall declare in advance the concentration reaching the threshold of declaration prescribed by the State Council to the Anti-monopoly Law Enforcement Agency, except for some circumstances prescribed by the law. The law provides the procedure to be followed and the factors to be considered by the Anti-monopoly Law Enforcement Agency in the examination of the declaration of concentration.

The fifth chapter is dedicated to the abuse of administrative power to eliminate or restrict competition. The administrative organs are prohibited to limit the business operators to purchase or use of commodities provided by business operators designated by it, to abuse their administrative power to block the free commodity circulation among different regions, to reject or restrict the participation of non-local business operators in local tendering, to compel business operators to engage in monopolistic activities prohibited by this Law, etc.

The Anti-monopoly Law Enforcement Agency shall investigate any suspicious monopolistic conduct. The law prescribes the procedure to be followed and the measures to be taken in the investigation taken by the Anti-monopoly Law Enforcement Agency. The business operators, interested parties and other relevant entities or individuals under investigation shall assist and shall not refuse or obstruct the Anti-monopoly Law Enforcement Agency in performing its functions. The business operators and interested parties under investigation shall be entitled to make statements. The investigation can be suspended and resumed under some circumstances.

If a monopoly of agreement is signed or a dominate position is abused or a concentration is completed in violation of the law, the Anti-monopoly Law Enforcement Agency may take some measures. It may order to stop the violation, to confiscate the illegal gains, to impose a fine, etc, on considering such factors as nature, extent and duration of the violations. The administrative organ or organization empowered by a law or administrative regulation to administer public affairs shall also respond to its abuse of administrative power to eliminate or restrict competition.

Tang Jue, IDI Country Expert for China

The text of the Law can also be found in the Legislation section of the Website

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