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Enforcement of Competition Law: Public Enforcement and Competition Agencies

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Competition Law in China

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Abstract

The increased focus on an effective enforcement of competition law in both developed and transitional economies has highlighted the debate on enforcement tools and institutions. Designing antitrust institutions became crucial, not only because a desirable substantive outcome of competition issues relies on an appropriate definition of competition policy enforcement organs, but also for the reason that a meaningful reform on the substances of law would be mediated through the reform of how competition institutions investigate and implement the substantive and procedural rules. It is argued that administrative agency policy making is superior to judicial or private systems because agencies are more specialized, while at the same time regulatory agencies may also suffer from insufficient human or financial resources, and being exposed to regulatory pressure and public choice concerns. To design an ideal enforcement agency, the general criteria of structural independence, independence in resourcing, the utility of the agencies should be fulfilled. To build agency capacity, training professional stuff, improving the organization of the agency and improving the leadership of the agency will be the key. Competition agencies in China include SAIC, NDRC, MOFCOM and SAMR. Before the establishment of the SAMR, the division of enforcement power between SAIC, NDRC and MOFCOM had been criticized for inefficiencies and creating overlaps and inconsistencies. It is expected that the institutional reform of establishing SAMR could improve the organizational design, and the agency capacity could be built through training professional staff, preventing regulatory capture and building connections between departments to solve coordination problems.

The prime key to the improvement of the administrative process is the selection of qualified personnel. Good men can make poor laws workable; poor men will wreak havoc with good laws

—James M. Landis, Report on Regulatory Agencies to the President-Elect (Washington: December, 1960)

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Notes

  1. 1.

    As Kovacic, Hollman and Grant put it, “Brilliant theory without skillful implementation is a bad match. Great ideas from economics, law or other disciplines require equally great implementing institutions to move a system of competition policy forward.” Kovacic et al. (2011, p. 25); see also Trebilcock and Iacobucci (2010, p. 455).

  2. 2.

    See First and Shiraishi (2005).

  3. 3.

    As Kovacic and Eversley once claimed, “Both older and newer competition systems have come to realize that a body of competition laws is only as good as the institutions entrusted with their implementation.” Kovacic and Eversley (2007).

  4. 4.

    Winerman and Kovacic (2010, pp. 145–203).

  5. 5.

    In many countries, when blaming the weak enforcement of the competition law, it is the competition agency that receives the most criticism. For example, in Japan, in 2001, the competition authority JFTC was criticized for being a “watch dog that does not bite.” Itoda (2001).

  6. 6.

    Kovacic et al. (2011).

  7. 7.

    Geradin et al. (2005).

  8. 8.

    Engstrom (2013, pp. 616–712).

  9. 9.

    For example, in 2008, it was claimed that “relatively little emphasis has been placed on the institutions and operational considerations through which competition law and policy are implemented.” Competition Policy Implementation Working Group: Subgroup 1, International Competition Network, Agency Effectiveness Report 3 (2008). For similar criticisms on implementation issues in the field of public policy, see for example Robichau and Lynn Jr (2009, p. 21).

  10. 10.

    For example Fox (2010, p. 473); Kovacic (1997, pp. 403–453); Kovacic et al. (2011, pp. 25–45); Kovacic (2009, pp. 903–923).

  11. 11.

    The most prominent research project on institutional design of competition agencies is Global Administrative Law Project of the New York University School of law, chaired by Professors Eleanor Fox and Michael Trebilcock.

  12. 12.

    Daniel Sokol used the example that when snakes threatened Guam’s bird population, the government introduced a mongoose; however, the mongoose also had a taste for birds and bird eggs. It is similar to introducing a specialized court to combat the antitrust institutional problems; but the specialized court may also run sub-optimally and create new problems. See Sokol (2010, pp. 1055–1056); Likewise, there were arguments against introducing private litigation, or doubting the benefits of class action in Europe. Wils (2003, pp. 473–488); Van den Bergh (2013).

  13. 13.

    The author shares the counter-arguments made by Mehra and Meng on antitrust functionalism, which argues that antitrust law can only be promulgated and enforced when institutional infrastructure, such as judicial review, is well-established. See Mehra and Meng (2009, pp. 379–429).

  14. 14.

    Gerber (2002, p. 275).

  15. 15.

    Gerber (2002, p. 276).

  16. 16.

    Buxbaum (2005, p. 117).

  17. 17.

    Landis (1938).

  18. 18.

    Wright and Diveley (2012, p. 5).

  19. 19.

    Eisner, at p. 130.

  20. 20.

    Macey (1992, p. 103).

  21. 21.

    Stephenson (2005, p. 108).

  22. 22.

    Stephenson (2005, p. 107).

  23. 23.

    Stephenson (2005, p. 107).

  24. 24.

    Wright and Diveley (2012, p. 13).

  25. 25.

    Most competition agencies have to combine the task of competition enforcement with consumer protection and other administrative duties. For example, in Peru, the competition authority INDECOPI is in charge of competition law, consumer protection, trade and intellectual property issues, as well as bankruptcy. see Kovacic and Hyman (2013, p. 2).

  26. 26.

    Kovacic and Hyman (2013, p. 2).

  27. 27.

    Weaver (1977).

  28. 28.

    Katzmann (1980).

  29. 29.

    Muris (2005, pp. 165–166).

  30. 30.

    Hyman and Kovacic (2013a, pp. 1446–1516).

  31. 31.

    Hyman and Kovacic (2013a, p. 1472).

  32. 32.

    Hyman and Kovacic (2013a, p. 1474).

  33. 33.

    Hyman and Kovacic (2013b, p. 1475).

  34. 34.

    Hyman and Kovacic (2013b, p.1484).

  35. 35.

    Trebilcock and Iacobucci (2010).

  36. 36.

    Kovacic (2015, p. 242).

  37. 37.

    Muris (2005, p. 167).

  38. 38.

    Muris (2005, p. 168).

  39. 39.

    Hyman and Kovacic (2013b).

  40. 40.

    Pollitt and Hupe (2011, pp. 641–658).

  41. 41.

    Christensen and Laegreid (2006).

  42. 42.

    Busuioc (2009, p. 602).

  43. 43.

    Van Ooik (2005, p. 145).

  44. 44.

    Jordana and Levi-Faur (2005).

  45. 45.

    Busuioc (2009, p. 602).

  46. 46.

    295 U.S. 602 (1935), cited by Selin (2015, p. 972).

  47. 47.

    Trebilcock and Iacobucci (2010, p. 457).

  48. 48.

    Kovacic and Hyman (2012, p. 530).

  49. 49.

    Dworkin (1988); Jackson (2014, p. 259).

  50. 50.

    Custos (2006, p. 616).

  51. 51.

    Custos (2006, p. 616).

  52. 52.

    Kovacic and Hyman (2012, p. 527).

  53. 53.

    Kovacic and Hyman (2012, p. 528).

  54. 54.

    Ottow (2014).

  55. 55.

    Ottow (2014, p. 4).

  56. 56.

    Ottow (2014, p. 4).

  57. 57.

    Wan (2018, p. 7).

  58. 58.

    Kovacic et al. (2011, pp. 30–31).

  59. 59.

    Kovacic et al. (2011, pp. 30–36).

  60. 60.

    Kovacic and Hyman (2012, p. 532).

  61. 61.

    Kovacic and Hyman (2012, p. 532).

  62. 62.

    Kovacic et al. (2011, p. 28).

  63. 63.

    Speech by Commissioner Mario Monti “EU Competition Policy” at the Fordham Annual Conference on International Antitrust Law and Policy, New York, 31 October 2002, available at https://ec.europa.eu/competition/speeches/index_2002.html.

  64. 64.

    Röller and Buigues (2005, p. 5).

  65. 65.

    Röller and Buigues (2005, p. 7).

  66. 66.

    Röller and Stehmann (2006, p. 285).

  67. 67.

    Farrell et al (2010, p. 263).

  68. 68.

    Robinson (1991, p. 652).

  69. 69.

    Robinson (1991, p. 653).

  70. 70.

    Ghosal et al. (2007, pp. 5–6).

  71. 71.

    The three mechanisms are based on Kovacic (1997, p. 409).

  72. 72.

    Kovacic (1997, p. 410).

  73. 73.

    Kovacic (1997, p. 411).

  74. 74.

    Kovacic (1997, p. 431).

  75. 75.

    Kovacic (1997, p. 432–433).

  76. 76.

    According to Deng and Huang (2018).

  77. 77.

    US Chamber of Commerce (2014, p. 11).

  78. 78.

    Kovacic (1997, p. 435).

  79. 79.

    Kovacic (1997, p. 435).

  80. 80.

    Kovacic and Hyman (2012, p. 531).

  81. 81.

    Winerman and Kovacic (2010, p. 146).

  82. 82.

    http://jftc.go.jp/e-page/about/role/organization.pdf.

  83. 83.

    First and Shiraishi (2005, p. 5).

  84. 84.

    For details, see Jung (2011, pp. 551-581).

  85. 85.

    Yi and Jung (2007, p. 158).

  86. 86.

    Yi and Jung (2007, p. 159).

  87. 87.

    Poapongsakorn(2002, p. 190).

  88. 88.

    Poapongsakorn(2002, p. 191).

  89. 89.

    Poapongsakorn(2002, p. 191).

  90. 90.

    Poapongsakorn (2002, p. 202).

  91. 91.

    Poapongsakorn (2002, p. 201).

  92. 92.

    Poapongsakorn (2002, p. 202).

  93. 93.

    Poapongsakorn (2002, p. 202).

  94. 94.

    Poapongsakorn (2002, p. 202).

  95. 95.

    Zhonghua Renmin Gongheguo Fanbuzhengdangjingzheng Fa (中华人民共和国反不正当竞争法) [Anti-Unfair Competition Law of the People’s Republic of China] (promulgated by the Standing Committee of the National People’s Congress, 2 September 1993, effective on 2 September 1993).

  96. 96.

    Jung and Hao (2003, p. 129).

  97. 97.

    Mehra and Meng (2009, p. 403).

  98. 98.

    Jung and Hao (2003).

  99. 99.

    Guowuyuan Bangongting Guanyu Yinfa Guojia Gongshang Xingzheng Guanli Zongju Zhuyao Zhize Neishe Jigou He Renyuan Bianzhi Guiding De Tongzhi (国务院办公厅关于印发国家工商行政管理总局主要职责内设机构和人员编制规定的通知) [The State Council Notice on Major Duties, Internal Organization and Administration of the SAIC], July 11 2008.

  100. 100.

    Hao (2013, p. 30).

  101. 101.

    Wang (2015).

  102. 102.

    Hao (2013, p. 27).

  103. 103.

    Hao (2013, p. 28).

  104. 104.

    Zhizhi Jiage Longduan Xingwei Zanxing Guiding (制止价格垄断行为暂行规定) [Interim Provisions on Preventing the Acts of Price Monopoly] (promulgated by the State Development and Reform Commission, June 18, 2003, effective on November 1, 2003).

  105. 105.

    Interim Provisions on Preventing the Acts of Price Monopoly, id.

  106. 106.

    Mehra and Meng (2009, p. 404).

  107. 107.

    Hao (2013, p. 28).

  108. 108.

    Hao (2013, p. 29).

  109. 109.

    Emch (2014, p. 220).

  110. 110.

    Wang (2015).

  111. 111.

    国家发改委:“十二五”期间反价格垄断取得重大进展 (NDRC: Significant Progress in the 12th Five-Year-Plan Period on the Enforcement of Price-related Monopolistic Agreements). http://www.sdpc.gov.cn/gzdt/201603/t20160304_791948.html

  112. 112.

    http://www.saic.gov.cn/fldyfbzdjz/gzdt/201706/t20170619_266335.html

  113. 113.

    Emch et al. (2016, p. 102).

  114. 114.

    Interim Provisions for Foreign Investors to Merge Domestic Enterprises (外国投资者并购境内企业暂行规定).

  115. 115.

    Emch, Han, and Ingen-Housz (2016, p. 103).

  116. 116.

    Ning and Yin (2011).

  117. 117.

    MOFCOM, The Responsibilities of the MOFCOM, June 13, 2011, MOFCOM website, available at http://fldj.mofcom.gov.cn/article/gywm/200809/20080905756026.shtml.

  118. 118.

    Two guidelines were published by the MOFCOM right after the enactment of the AML: on 03 August 2008, the MOFCOM issued the Thresholds for Prior Notification of Concentrations of Undertakings, and the Guide of the Anti-Monopoly Committee of the State Council for the Definition of the Relevant Market, which was published on MOFCOM website on 24 May 2009.

  119. 119.

    Emch, Han, and Ingen-Housz (2016, p. 104).

  120. 120.

    Wang (2015).

  121. 121.

    Zhan et al. (2018, p. 2).

  122. 122.

    Zhan et al. (2018, p. 2).

  123. 123.

    Zhan et al. (2018, p. 4).

  124. 124.

    Liu et al. (2020).

  125. 125.

    Hao (2013, p. 19).

  126. 126.

    Kovacic and Hyman (2012, p. 532).

  127. 127.

    Kovacic and Hyman (2013, p. 4).

  128. 128.

    Ng (2015, p. 6).

  129. 129.

    Ottow (2014, p. 3).

  130. 130.

    Ottow (2014, p. 9).

  131. 131.

    Ottow (2014, p. 14).

  132. 132.

    Ottow (2014, p. 17).

  133. 133.

    Ottow (2014, p. 17).

  134. 134.

    Ottow (2014, p. 19).

  135. 135.

    Kovacic and Hyman (2012, p. 533).

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    Jingyuan Ma

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Ma, J. (2020). Enforcement of Competition Law: Public Enforcement and Competition Agencies. In: Competition Law in China. Springer, Singapore. https://doi.org/10.1007/978-981-15-5105-5_9

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  • DOI: https://doi.org/10.1007/978-981-15-5105-5_9

  • Published:

  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-15-5104-8

  • Online ISBN: 978-981-15-5105-5

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

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