Keeping Pace with SAIC: Monopoly Agreements and Abuses of a Dominant Position

NDRC, MerNinette Dodoo, Feb 28, 2011

Since the introduction of China’s Anti-Monopoly Law (“AML”) in August 2008, much of the precedent and practice has focused on China’s merger control regime. On January 7, 2011, the State Administration for Industry and Commerce (“SAIC”) published regulations concerning non-price-related anticompetitive practices. A few days earlier, on January 4, 2011, the National Development and Reform Commission (“NDRC”) published a corresponding set of regulations on price-related anticompetitive conduct.

The regulations adopted by SAIC, which took effect on February 1, 2011, deal with the application of the AML to anticompetitive agreements (or monopoly agreements under the AML), abuses of dominant market position, and abuses of administrative power. They are the first substantive rules issued and, as such, offer insight on how SAIC will enforce the conduct-related provisions of the AML. Far from providing legal certainty and predictability, SAIC’s regulations raise questions and leave SAIC with considerable discretion in the enforcement of the AML. This may be inevitable given the relative infancy of China’s competition rules but creates risks, compliance burdens, and uncertainty for companies conducting business in China.

This article examines the SAIC Regulation on the Prohibition of Conduct Involving Monopoly Agreements (“SAIC Monopoly Agreements Regulation”) and the SAIC Regulation on the Prohibition of Conduct Abusing a Dominant Market Position (“SAIC Abuse of Dominance Regulation”) (together “SAIC regulations”), and considers the scope of these regulations while highlighting certain areas of uncertainty. It also considers some of the enforcement issues likely to be encountered as SAIC develops and implements the AML.