Abstract
China’s introduction of its Anti-Monopoly Law (“AML”) on 30 August 2007, marks a legal milestone in the country’s unprecedentedly adventurous journey towards marketization. However, the AML only launched a transformation that centers on fulfilling a declaration of fair competition within preexisting legal and institutional constraints. Since the day that the statute entered into force, largely due to enforcement actions and sporadic high-profile court cases, details of the AML have gradually been filled in. During the process, China’s competition regime has received a major makeover and is still continually evolving, with wide-ranging implications on the country’s legal as well as economic development. This paper traces the origin and progression of China’s competition law, in order to identify the factors that have shaped it, and analyze its various components, with a particular focus on how administrative enforcement has dominated the development of the AML.
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Notes
- 1.
Legislation of the NPC Standing Committee is of the highest level next to that of the National People’s Congress. As the permanent office of the NPC, the Standing Committee also exercises the state legislative powers. Laws made by the Standing Committee outrank all those by any other legislatures except the NPC. http://www.china.org.cn/english/kuaixun/76337.htm.
- 2.
Article 1.
- 3.
Article 10.
- 4.
Article 21.
- 5.
- 6.
Provisional Regulation on the Development and Protection of Socialist Competition, issued by the State Council on 17 October 1980, available at http://vip.chinalawinfo.com/newlaw2002/slc/slc.asp?db=chl&gid=816.
- 7.
Report of the 14th National Congress of the Chinese Communist Party (12 October 1992).
- 8.
Article 10 Consumer Protection Law of the People’s Republic of China, [1993] Presidential Order No. 11, 31 October 1993.
- 9.
Arts. 14.1, 14.2, and 14.5 Price Law.
- 10.
Articles 32, 53 Tender and Bidding Law of the People’s Republic of China, [1999] Presidential Order No. 21, 30 August 1999.
- 11.
Arts. 19−22 Provisional Regulation on Mergers with an Acquisition of Domestic Enterprises by Foreign Investors, [2003] Ministry of Foreign Trade and Economic Cooperation, State Administration of Taxation, State Administration for Industry and Commerce, State Administration of Foreign Exchange, Order No. 3, 7 March 2003.
- 12.
Regulation on Mergers with an Acquisition of Domestic Enterprises by Foreign Investors, [2006] Ministry of Commerce, State-Owned Assets Supervision and Administration Commission, State Administration of Taxation, State Administration for Industry and Commerce, China Securities Regulatory Commission, State Administration of Foreign Exchange, Order No. 10, 8 August 2006, Chapter V, Arts. 51−54.
- 13.
Articles 1 and 2.
- 14.
Provisional Regulation on the Prohibition of Price Monopoly Conduct, [2003] NDRC Order No. 3, 18 June 2003.
- 15.
Ibid., Art. 1.
- 16.
Ibid., Arts. 2−8.
- 17.
E.g., Regulations against Unfair Competition in the Civil Air Transportation Market, 27 February 1996. Telecommunications Regulations of the PRC, 25 September 2000.
- 18.
- 19.
Cao (then the Chairman of the Legislative Affairs Office of the State Council) (2007), p. 20.
- 20.
See, e.g., Liu (2005).
- 21.
See Art. 9 2004 Draft AML (on file with the author).
- 22.
See Hao (2013), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2275699.
- 23.
Article 10 AML.
- 24.
Articles 13 and 14.
- 25.
Anti-Price Monopoly Regulation [2010] NDRC Order No. 7, 29 December 2010. Regulation on the Anti-Price Monopoly Administrative Enforcement Procedure [2010] NDRC Order No. 8, 29 December 2010. Regulation on the Procedure for the Handling Cases Involving Monopoly Agreements and Abuses of Dominant Market Position, [2009] SAIC Order No. 42, 5 June 2009. Regulation on the Prohibition of Monopoly Agreement Conduct, [2010] SAIC Order No. 53, 31 December 2010.
- 26.
Jung and Hao (2003).
- 27.
Article 16 AML.
- 28.
Article 46 AML.
- 29.
Although the decision was based on Price Law rather than the AML, NDRC has explicitly labeled the target behavior as “price monopoly activities.” See NDRC’s press release on the LCD case, available at http://jjs.ndrc.gov.cn/gzdt/201301/t20130117_523203.html.
- 30.
The original decisions are available at http://jjs.ndrc.gov.cn/fjgld/.
- 31.
The article is open-ended by including “other monopoly agreements as determined by the Anti-monopoly Authority under the State Council.”
- 32.
Guizhou Price Bureau, 22 February 2013, Kweichow Moutai, Announcement by Guizhou Price Bureau [2013] No. 1.
- 33.
Sichuan Development and Reform Commission, 22 February 2013, Wuliangye, Press Release “Wuliangye Fined RMB 202 Million for Price Monopoly”.
- 34.
The press release of the decision is available at http://www.ndrc.gov.cn/xwfb/t20130807_552991.htm.
- 35.
Biostime was fined 162.9 million yuan, representing 6 % of its sales amount last year. Mead Johnson was fined 4 % of its revenues of 2012, which is 203.76 million yuan. Penalties on all the other four brands account for 3 % of their sales last year. Dumex was fined 171.99 million yuan, while Abbott was fined 77.34 million yuan, and FrieslandCampina was fined 48.27 million yuan. Fonterra had to pay the lowest amount, which is 4.47 million yuan.
- 36.
Article 7: The state protects the lawful business operations conducted by undertakings in the industries controlled by the State economy that concern the lifeline of national economy and national security, or the industries implementing exclusive operations and sales in accordance of the law. The state also lawfully regulates and controls their business operations and the prices of their products and services so as to safeguard the interests of consumers and promote technical progresses.
The business operators as mentioned above shall lawfully operate, be honest and faithful, be strictly self-disciplined, accept social supervision, shall not damage the interests of consumers by virtue of their dominant or exclusive positions.
- 37.
For account of the investigation, see a new analysis at http://www.techweb.com.cn/tele/2014-02-20/2009329.shtml.
- 38.
A brief announcement form the NDRC is available at http://jjs.ndrc.gov.cn/gzdt/201111/t20111115_444599.html.
- 39.
NDRC’s announcement is available at http://jjs.ndrc.gov.cn/gzdt/201404/t20140403_605787.html.
- 40.
See NDRC’s news release at http://jjs.ndrc.gov.cn/gzdt/201407/t20140711_618477.html.
- 41.
The decision can be found at http://jjs.ndrc.gov.cn/fjgld/201503/t20150302_666170.html.
- 42.
SAIC’s announcement is available at http://www.saic.gov.cn/ywdt/gsyw/zjyw/xxb/201407/t20140729_147122.html.
- 43.
In 2008 (from 1 August − 31 December), 16 merger reviews were completed. See MOFCOM, MOFCOM Held Press Conference on Development of the Anti-Monopoly Enforcement in 2012, http://www.gov.cn/gzdt/2012-12/30/content_2302199.htm.
- 44.
Article 20 AML.
- 45.
Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings, [2008] State Council Decree No. 529, 3 August 2008. http://fldj.mofcom.gov.cn/aarticle/c/200903/20090306071501.html.
- 46.
Article 23 AML.
- 47.
A list of such cases is available at http://fldj.mofcom.gov.cn/article/jyzjzjyajgs/?.
- 48.
Article 27 AML.
- 49.
Article 30 AML.
- 50.
Now the list is released every quarter at http://fldj.mofcom.gov.cn/article/zcfb/.
- 51.
Articles 32−37 AML.
- 52.
Article 51 AML.
- 53.
SAIC’s account of this case is available at http://www.saic.gov.cn/ywdt/gsyw/dfdt/xxb/201107/t20110727_111694.html.
- 54.
NDRC’s announcement is available at http://jjs.ndrc.gov.cn/gzdt/201409/t20140926_626773.html.
- 55.
- 56.
The letter is available at http://jjs.ndrc.gov.cn/fjgld/201508/t20150826_748682.html.
References
Cao K (2007) Explanation of the AML draft, reprinted in the anti-monopoly law of the People’s Republic of China. China Democracy and Legal Press, Beijing
Hao Q (2013) Trade Associations and Private Antitrust Litigation in China. CPI Antitrust Chronicle 1. Available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2275699
Jung Y, Hao Q (2003) The new economic constitution in China: a third way for competition regime? Northwest J Int Law Bus 24:107–172
Liu J (2005) The difficulties in drafting the anti-monopoly law and the monopolistic interests of the agencies. http://www.66law.cn/news/1083.aspx
Wang X (2008) Highlights of China’s new anti-monopoly law. Antitrust Law J 75:133–150
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Hao, Q. (2016). An Overview of the Administrative Enforcement of China’s Competition Law: Origin and Evolution. In: Cauffman, C., Hao, Q. (eds) Procedural Rights in Competition Law in the EU and China. China-EU Law Series, vol 3. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-48735-8_3
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