China’s Recent Antitrust Investigations and Lessons for Foreign Companies

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Liu Yang, Feb 12, 2015

The Anti-Monopoly Law, in force since August 1, 2008, is often considered the “economic constitution,” safeguarding fair competition and China’s sound market economy. The AML established an administrative and judicial framework that is conceptually similar to that of other jurisdictions’ competition law systems. Since its entry into force, the AML has been used to prevent undue concentrations of market power, combat cartels and abuse of market dominance, and pursue other goals that enhance the overall competitive environment in China. However, China’s recent antitrust investigations have triggered widespread backlash among western business circles by involving some world-famous multi-national companies, including Microsoft, Qualcomm, BMW, etc. Some have accused China of using the AML as a weapon to target foreign companies, while others have condemned the AML for the lack of clarity in its provisions and transparency and certainty in enforcement.

To better interpret the AML and the trends in its enforcement, MNCs that have business operations in China should acquire better knowledge on China’s unique socialist market economy and take into consideration procedural issues as to antitrust enforcement in China.