Chinese antimonopoly law
The Chinese Antimonopoly Law (反垄断法 in Chinese) was enacted by the Standing Committee of the Chinese Parliament (全国 人民 代表 大会 常务委员会) on August 30, 2007 and will come into effect on August 1, 2008. It is the first antitrust law in the People's Republic of China .
Design process
Whether China needs an antimonopoly law has long been debated. A group of experts was set up as early as 1987, which was responsible for drafting the law against unfair competition as well as the anti-monopoly law. After the Unfair Competition Act was passed in 1993, a draft Antimonopoly Act was not yet in sight. A group of experts was re-established in 1994 to draft the Antimonopoly Act and the enactment of this act was included in the legislative plan that same year. However, both lawyers and economists doubted the necessity of enacting an antimonopoly law in China's economic situation at the time. Although there were drafts in the meantime, the drafting process made little progress due to a lack of interest.
With the rising Chinese economy, more and more competitive problems emerged, particularly from dominant state-owned and strong foreign companies. Legislators quickly agreed that an anti-monopoly law was needed to oversee corporate market behavior. Now the question was no longer whether, but how. The main obstacle to the enactment of the Antimonopoly Act came mainly from the powerful state-owned companies, as the Antimonopoly Act opposed the so-called administrative monopoly from its first draft. State-owned companies, most of which had significant market dominance, and authorities responsible for the sectors of state-owned companies, such as B. for the oil, telecommunications, banking, insurance and transport industries to abolish the chapter on the administrative monopoly in the planned antimonopoly law or even to stop the drafting process of the antimonopoly law entirely. This has been a major reason the law has not been enacted in recent years, despite the intense efforts of some government agencies. There were also organizational obstacles. Since the importance of the Antimonopoly Act was now recognized by most government agencies, several agencies including the Ministry of Commerce, the State Administration for Industry and Commerce, and the Development and Reform Commission (Development and Reform Commission) worked on the draft at the same time. These separate efforts, or rather the battle for decision-making power in antitrust surveillance, slowed the drafting process down considerably. The draft was presented to the Standing Committee of the Chinese Parliament for the first time in June 2006 and passed on August 30, 2007.
Content of the law
The Antimonopoly Law has eight chapters and 57 articles. Both the structure and the wording of the law clearly show a strong influence of European and German antitrust law. However, there are also numerous Chinese characteristics that are largely oriented towards industrial policy.
1. Competition principles
Chapter 1 of the Act is devoted to the general principles of competition policy. The main objective of the Antimonopoly Act is, according to Art. 1, to prevent monopoly behavior by companies, to protect competition in the market, to shape the functioning of the economy effectively, to take into account the legitimate interests of consumers and the common good and to maintain the healthy development of the socialist market economy .
According to Art. 2, the law will not only apply to the competitive behavior of companies within the People's Republic of China. The applicability also extends to the competitive behavior of companies outside the People's Republic, insofar as their behavior hinders competition on the Chinese market. This provision corresponds to the principle of effect as it is also found in most leading antitrust laws, e.g. B. in German, European and US antitrust law. The Antimonopoly Act does not apply in the Hong Kong and Macau Special Administrative Areas.
2. Prohibited monopoly behavior
The law evaluates three market behaviors of companies as monopoly behavior. First, Chapter 2 prohibits monopoly agreements between companies that are in competition with one another. The term monopoly agreement encompasses not only agreements or resolutions that eliminate or restrict competition, but also the concerted practices of companies without agreements. Specifically, Article 13 prohibits monopoly agreements that fix the prices of products, restrict the production or sale of products, divide up sales or supply markets, restrict the acquisition of new technologies or the development of new technologies or products or boycott trade. According to Art. 14, the setting of sales prices is also prohibited. However, according to Art. 15, agreements that serve to a. to improve technology and product quality, to develop new products, to increase the efficiency of small and medium-sized enterprises, to save energy, to protect the environment and to protect national interests in foreign trade or in cooperation with foreign companies.
Second, abuse of a dominant position by companies is prohibited in Chapter 3 of the law. According to Art. 18, whether a company has a dominant position is examined on the basis of its market share in the relevant market, its access to the procurement or sales markets, its financial strength, its technological level, the barriers to entry in the relevant market, etc. According to Art. 19, it is assumed that a company is dominant if it has a market share of 50% or more in the relevant market. If two companies together have a market share of two thirds, or three companies together have a market share of three quarters, the entirety of the companies is considered to be dominant, unless one of the companies has a market share of less than 10%. The abuse of a dominant position is prohibited according to Art. B. selling at inflated prices, buying at dumping prices, selling below cost without good reason, boycotting trade, different conditions for equivalent services to trading partners and coupling sales.
Third, business combinations that eliminate or hinder competition in the relevant market are to be prohibited under Chapter 4. The law uses the word “corporate concentration” for the term “concentration”. According to Art. 12, companies within the meaning of the law are natural or legal persons as well as other entities that produce, sell products or offer services on the relevant market. According to Art. 20, the term corporate concentration is to be understood as three facts. Firstly, mergers between two or more companies are viewed as corporate concentrations. The acquisition of voting rights or assets of one company by another company represents the second fact of company concentration, provided that the acquiring company can control the company to be acquired through the acquisition. Third, the corporate agreements are to be seen as corporate concentration through which one company can control another company or exert sufficient influence over its decisions. Similar to Europe and the USA, the antimonopoly law sets a threshold, beyond which a merger must be registered with the government authorities with an antimonopoly function. However, the law does not regulate exactly how high the threshold is. According to Art. 21, the Council of State is empowered to publish a specific threshold and to modify it every year according to economic developments.
3. Administrative monopolies
In addition to monopoly behavior by companies, the so-called administrative monopolies are prohibited under Chapter 5 of the law. According to Art. 32, the government authorities or public institutions may not abuse their administrative power to force companies or consumers to buy products from the suppliers they have chosen. Art. 33 and Art. 34 provide for it to be illegal if the regional authorities discriminate against products or market participants from another region or issue regional regulations with anti-competitive provisions.
4. Competition authorities
According to the Antimonopoly Act, the competition authorities in China are the Antimonopoly Commission and the government authorities with antimonopoly functions. According to Art. 9, the Antimonopoly Commission is set up within the State Council. Its function is to lead, organize and coordinate the government's antimonopoly activities. In order to perform its function, it has the power to determine competition policy, to investigate and report on the overall competitive situation in the market, to publish anti-monopoly guidelines and to assist government agencies in handling important anti-monopoly cases. How the Antimonopoly Commission is formed is not regulated in the law. It is only prescribed that the State Council should determine the formation of the Antimonopoly Commission and its rules of procedure.
The government authorities with an antimonopoly function are to be distinguished from the Antimonopoly Commission. While the Antimonopoly Commission has primarily strategic tasks, the government authorities with an antimonopoly function rather implement the Antimonopoly Act in specific cases. They investigate and prevent companies' antimonopoly behavior, receive merger notifications and carry out merger control. While the Antimonopoly Commission has yet to be formed, the government authorities with an antimonopoly function according to Art. 10 are the already existing central government authorities, which are mandated by the State Council to implement the Antimonopoly Act. Exactly which authorities are commissioned to implement the antimonopoly law is not regulated by the law. According to the current political situation, u. a. the Ministry of Commerce, the State Administration for Industry and Commerce, and the Development and Reform Committee. The commissioned government agencies will have broad powers of investigation, decision-making and sanctioning and may commission their subordinate authorities in the provinces, autonomous regions and cities to carry out their antimonopoly function on the ground.
literature
- Zhaoxia Chen: Problems of European merger control after the reform of the FCVO. A comparative study of merger control in the EU and the US and its effects on the Chinese antimonopoly law. Publishing house Dr. Kovač , Hamburg 2008, ISBN 978-3-8300-3470-4 .
