The New Chinese Anti-Monopoly Law – An Overview

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Adrian Emch, Nov 15, 2007

On August 30, 2007, the Anti-Monopoly Law (“AML”) was enacted by the Standing Committee of the National People’s Congress (“NPC”). This law is the culmination of a drafting process which lasted over 13 years.

During this process, the various actors (including the Chinese government and academia) have shown a relatively high degree of openness. Compared to previous drafts of the AML, its final version is perhaps the most advanced document.

Nonetheless, while the law itself can provide a good basis for future competition policy and enforcement, it needs to be refined. More detailed rules will be required to implement the provisions of the AML. The AML takes effect on August 1, 2008 in order to give the Chinese authorities time to adopt implementing regulations and guidelines.

According to the AML, during this period until August 1, 2008, the State Council will also resolve one of the fundamental issues which the AML has left open – to decide which authority or authorities will be responsible for implementing the AML. The AML itself provides for a two-level structure of governance, with the Anti-Monopoly Commission at the top. Its responsibility is to organize, coordinate, and guide the implementation of the AML, and it is entrusted with a number of specific (but general) tasks. The Anti-Monopoly Enforcement Authority is a body or, perhaps more likely, a number of bodies in charge of the enforcement of the AML.

The language of Article 9 of the AML suggests that the Anti-Monopoly Commission will be newly created. By contrast, at the time of writing, it is not clear whether the functions of the Anti-Monopoly Enforcement Authority will be allocated to a new body or, on the contrary, to existing bodies. Currently, at least three bodies – the Ministry of Commerce (“MOFCOM”), the National Development and Reform Commission (“NDRC”) and the State Administration of Industry and Commerce (“SAIC”) – share responsibility in enforcing competition law rules, and these bodies are also reported to be interested in assuming responsibilities under the AML. Although it is distinctly possible that the Anti-Monopoly Enforcement Authority will be composed of several bodies, we will refer to it in singular in this article, for the sake of simplicity.

The remainder of this article is organized as follows: Section 2 deals with the scope of application of the AML. The subsequent sections examine the four types of restraints on competition at which the AML is targeted. Section 3 analyzes the rules applicable to monopoly agreements. Section 4 examines the provisions regarding abuses of dominant market positions. Section 5 will examine the procedural rules which apply to investigations on monopoly agreements and abuses of dominant market positions. Section 6 looks at the regime for the control of concentrations, and Section 7 briefly explains the concept of “administrative monopolies.” Finally, Section 8 provides some concluding remarks.

Links to Full Content

Emch & Hao (Nov. 2007)