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Examining the first amendment of China’s anti-monopoly law: suggestions to improve the regulation on monopoly agreements

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Abstract

China’s Anti-monopoly Law has been amended for the first time since its implementation in 2008. The new law, China’s 2022 Anti-monopoly Law, makes four main changes to the chapter on monopoly agreements. This article summarises these changes and sets out the reasons for the changes. Based on the revisions in the new law, the paper points out that by adding the effect defence, the law implies three levels of severity for monopoly agreements, and by adding the safe harbour rule, it alleviates the shortcomings of the “general prohibition and exceptional exemption” model for vertical monopoly agreements. Although the new law is an improvement over the previous version, there are still issues that need to be improved further: the effect defence is difficult to apply; the exemption clause lacks rationalization and clarification; the penalty for organisers and supporters of monopoly agreements shall be clarified; and the interpretation of “organise” in Article 19 conflicts with the word in Article 21.

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Notes

  1. State Administration for Market Regulation (SAMR) The first Draft Amendment to the Anti-Monopoly Law of the People’s Republic of China (Hereinafter referred to as “First Draft”), Exposure Drafts, 2 January 2020, https://www.samr.gov.cn/hd/zjdc/202001/t20200102_310120.html Accessed 30 August 2022.

  2. Standing Committee of the National People’s Congress (NPCSC) Request for Public Comments on the Bill to Amend the Anti-Monopoly Law (Hereinafter referred to as “Second Draft”), Exposure Drafts, 23 October 2021, https://www.pkulaw.com/en_law/cac194c6018f6020aeca6f94a88cf192bdfb.html?keyword=反垄断法 Accessed 30 August 2022.

  3. Standing Committee of the National People’s Congress (NPCSC) Decision of the Standing Committee of the National People’s Congress to Amend the Anti-Monopoly Law of the People’s Republic of China, 24 June 2022, http://www.npc.gov.cn/npc/c30834/202206/e42c256faf7049449cdfaabf374a3595.shtml Accessed 30 August 2022.

  4. Article 16 of The Anti-Monopoly Law of the People’s Republic of China, 1 August 2022.

  5. Article 18(2) of The Anti-Monopoly Law of the People’s Republic of China, 1 August 2022.

  6. Article 18(3) of The Anti-Monopoly Law of the People’s Republic of China, 1 August 2022.

  7. Article 19 of The Anti-Monopoly Law of the People’s Republic of China, 1 August 2022.

  8. Article 2 of Act on Prohibition of Private Monopolization and Maintenance of Fair Trade of Japan, Act No. 54 of April 14, 1947.

  9. Article 2 of Competition Act 2010 of Malaysia.

  10. Liu (2020, p. 149).

  11. Article 13 of Anti-Monopoly Law of the People’s Republic of China.

  12. 2012 Hu Gao Min San (Zhi) Zhong Zi No. 63, https://cclp.sjtu.edu.cn/Show.aspx?info_lb=682&info_id=3050&flag=679 Accessed 30 August 2022.

  13. 2010 Hu Yi Zhong Min Wu (Zhi) Chu Zi No. 169.

  14. 2012 Hu Gao Min San (Zhi) Zhong Zi No. 63.

  15. 2016 Shanghai 73 Civil Judgment No. 866.

  16. Li (2014, p. 136).

  17. Liu (2012, p. 14).

  18. Fu (2013, p. 76).

  19. Wang (2014, p. 45).

  20. Liu (2020, p. 155).

  21. Ding (2017, p. 160).

  22. Shi (2022, pp. 185–186).

  23. 2018 Supreme Court Xing Shen No. 4675.

  24. 2017 Qiong 01 Xing Chu No. 681.

  25. 2017 Qiong Xing Zhong No. 1180, http://www.zggpjz.com/housenews/sifazhongcai/2018/0206/3265.html Accessed 30 August 2022 l.

  26. 2018 Supreme Court Xing Shen No. 4675.

  27. 2018 Supreme Court Xing Shen No. 4675.

  28. 2018 Supreme Court Xing Shen No. 4675.

  29. Article 13 of Guide of the Anti-Monopoly Committee of the State Council for Countering Monopolization in the Field of Intellectual Property Rights (hereinafter referred to as “IP Guide”).

  30. Article 4 of Guide of the Anti-Monopoly Committee of the State Council for Countering Monopolization in the Field of Automobile (hereinafter referred to as “Automobile Guide”).

  31. Wang (2022, p. 45).

  32. Wang (2022, p. 45).

  33. Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union (De Minimis Notice) (2014/C 291/01).

  34. Guidance on Restrictions of Competition “by object” for the purpose of defining which agreements may benefit from the De Minimis Notice, 25 June 2014, SWD (2014) 198 final.

  35. COMMISSION REGULATION (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices.

  36. United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940).

  37. OECD Recommendation (2019b).

  38. ICN 4th Annual Conference (2005, p.15).

  39. Elhauge and Geradin (2018, p. 101).

  40. Elhauge and Geradin (2018, p. 101).

  41. Wu (2022, p. 9).

  42. Xu (2008, p. 18).

  43. Ye (2017, p. 101).

  44. Whish (2021, p. 121).

  45. Case 5/69, Volk v. Vervaecke, [1969] E. C. R. 295, p. 300–301.

  46. 湖南查处首起垄断案件 7单位被处罚金219万 (Hunan investigated and dealt with the first monopoly case, 7 undertakings were fined 2.19 million) http://www.gov.cn/jrzg/2012-12/28/content_2301393.htm Accessed 30 August 2022.

  47. OECD Hub-and-spoke Arrangements (2019a).

  48. Hou (2022, p. 156).

  49. The same in 2022 AML.

  50. Wang (2011, p. 116–125).

  51. Wang (2011, p. 118).

  52. Wang (2014, p. 40).

  53. 2010 Hu Yi Zhong Min Wu (Zhi) Chu Zi No. 169.

  54. 合生元等乳粉生产企业违反《反垄断法》限制竞争行为共被处罚6.6873亿元 (Biostime and other milk powder manufacturers were fined a total of 668.73 million yuan for violating the Anti-Monopoly Law to restrict competition) https://www.ndrc.gov.cn/xwdt/xwfb/201308/t20130807_956179.html?code=&state=123 Accessed 30 August 2022.

  55. https://www-pkulaw-com.ezproxy.cityu.edu.hk/chl/96d0fd1e5e3cd802bdfb.html?keyword=%E7%A6%81%E6%AD%A2%E5%9E%84%E6%96%AD%E5%8D%8F%E8%AE%AE&way=listView Accessed 30 August 2022.

  56. https://www-pkulaw-com.ezproxy.cityu.edu.hk/protocol/dc5b51b338ab219a11489795f0e432cfbdfb.html?way=textRightFblx Accessed 30 August 2022.

  57. The Chinese word of this term is “组织”. Some versions translate it as “organise” and others as “arrange”, both meaning the same thing. This article uses the word “organise”.

  58. Wu (2014, p. 6).

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Acknowledgements

This paper is based on our presentation at the online competition law seminar on 7 April 2022, held by Maastricht University. We would like to express our sincere appreciation to the organizers and participants of the webinar. After this seminar, the 35th session of the Standing Committee of the 13th National People’s Congress passed the Anti-Monopoly Law of the People’s Republic of China on June 24, 2022. The final confirmation of the Anti-Monopoly Law adjusted the provision of the safe harbour rule, and this article gives a response to the changes in the new Anti-monopoly Law.

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  1. School of Law, Central University of Finance and Economics (CUFE), Beijing, China

    Tao Wu & Yihan Wang

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Wu, T., Wang, Y. Examining the first amendment of China’s anti-monopoly law: suggestions to improve the regulation on monopoly agreements. China-EU Law J 9, 3–23 (2023). https://doi.org/10.1007/s12689-023-00102-7

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