China's Anti-Monopoly Law Regime
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This article looks at the development of antitrust/anti-monopoly/competition law in China, and provides an analysis of the various regulations involved and the government departments involves in enforcing these regulations in China.
History and development of China’s Anti-Monopoly Laws and regulations
As early as 1994, China planned to formulate its Anti-Monopoly Law, a plan that lasted for 13 years. Finally in 2007, Congress promulgated China's first Anti-Monopoly Law (the "AML"). The Law became effective on August 1, 2008.
Before the enactment of the AML, the relevant anti-monopoly provisions were set off in the Interim Provisions on the Takeover of Domestic Enterprises by Foreign Inverstors (Revised 2006) (the "Decree 10"), which took effect on 2006 and were amended again in 2009 by the Ministry of Commerce (the “ MOFCOM”).
The AML first introduced the concept of “Concentration of Business Operators”. Subsequently, a number of regulations or guiding opinions on the “Concentration of Business Operators” have been enacted. These include (1) the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators, which is clarified the standards for the declaration of concentration of business operators, issued by the State Council and took effect on August 3, 2008; (2) the Measure for the Undertaking Concentration Examination, issued by the MOFCOM on January 1, 2010, which set forth the procedures for anti-monopoly examination of undertaking concentration; (3) the Measure for the Undertaking Concentration Declaration, also enacted by the MOFCOM on January 1, 2010; (4) the Guiding Opinions of the Anti-monopoly Bureau of the Ministry of Commerce on the Declaration of the Concentration of Business Operators, which came into force on January 5, 2009; (5) the Guiding Opinions of the Anti-monopoly Bureau of the Ministry of Commerce on the Declaration Documents and Materials of the Concentration of Business Operators, enacted by the MOFCOM on January 5, 2009; (6) the Interim Provisions on the Divestiture of Assets or Business in the Concentration of Business Operators, issued by the MOFCOM on July 5, 2010; and (7) the Interim Provisions on Assessing the Impact of Concentration of Business Operators on Competition issued by the MOFCOM on September 5, 2011.
On January 4, 2011 and on January 7, 2011, the antitrust enforcement authorities in China-the National Development and Reform Commission (the "NDRC") and the SAIC respectively promulgated five new regulations implementing the AML: There are (1) the Provisions against Price Fixing, Provisions for the Industry and Commerce Administrations on the Prohibition of Monopolistic Agreements, the Provisions for the Industry and Commerce Administrations on the Prohibition of Abuse of Dominant Market Position, and the Provisions for the Industry and Commerce Administrations to Stop Acts of Abusing Administrative Power for the Purpose of Eliminating or Limiting Competition which apply to the price-related monopolization agreements, the price-related abuse of dominant market status by business operators and the price-related abuse of administration power by administration agencies, with the purpose of preventing and curbing the price fixing acts,; (2) the Provisions on the Administrative Procedures for Law Enforcement against Price Fixing, which provides further guidance as to how to conduct investigations in relation to price-related breaches of the AML. All of the above mentioned five newly issued regulations came into force on February 1, 2011.
Enforcement Agencies for Anti-Monopoly Laws and Regulations
At present, four government authorities are respectively in charge of enforcing various anti-monopoly regulations:
(1) the Enforcement Office for Anti-Monopoly and Countering Unfair Competition of the SAIC (http://www.saic.gov.cn/fldyfbzdjz/jgsz/). The function of the Office is to stipulate regulations on anti-monopoly and countering unfair competition issue; to enforce the work of anti-monopoly; to investigate unfair competition, bribery claims, smuggling and other illegal economic cases. It is mainly responsible for enforcement work regarding agreements, the abuse of dominant market position and the abuse of administrative power to eliminate or restrict competition (except for price-fixing behavior);
(2) the Anti-monopoly Bureau of the MOFCOM (http://fldj.mofcom.gov.cn/. It is responsible for reviewing on concentrations of undertakings according to law and investigating into cases on concentrations of undertakings reported by anti-monopoly enforcement authorities;
(3) the Department of Price Supervision of the NDRC (http://en.ndrc.gov.cn/mfod/t20081218_252213.htm. It is in charge of drafting administrative laws and regulations for price supervision and inspection; guiding and organizing price supervision and inspection, and handling activities and cases related to commodity prices, service prices and fee collection involving violation of price-related laws by central government agencies, handling price monopoly activities and reconsideration cases and appeals concerning the punishment of price violations and decisions; and
(4) Besides, the Anti-Monopoly Committee founded by the State Council on 2008 is responsible for coordination of the above mentioned three agencies.
It is called “3+1” mode for enforcement of the anti-monopoly regime in China
Analysis of Key Anti-Monopoly Laws and Regulations
The AML is the most important law in the anti-monopoly regime. The AML stipulates that “monopolistic conducts” includes: (1) Monopoly agreements reached between business operators; (2) Abuse of dominant market position by business operators; and (3) Concentration of business operators that may have the effect of eliminating or restricting competition.
1. Monopoly Agreements
The Monopoly Agreements reached between business operators is the most common and typical monopolistic behavior in the market, it brings serious harm to market competition. According to the Article 13 of the AML, “Monopoly Agreements” refers to agreements, decisions or other concerted behaviors that eliminate or restrict competition. It consists of the “Horizontal Monopoly Agreements” and the “Vertical Monopoly Agreements”.
Horizontal Monopoly Agreements means the competing business operators reach any of the following agreements with each other:
(1) Fixing or changing the price of commodities;
(2) Restricting the production quantity or sales volume of commodities;
(3) Dividing the sales market or the raw material supply market;
(4) Restricting the purchase of new technology or new facilities or the development of new technology or new products;
(5) Jointly boycotting transactions; or
(6) Other monopoly agreements as determined by the Anti-monopoly Law Enforcement Agency under the State Council.
Vertical Monopoly Agreements refers to the business operators make any of the following agreements with their trading parties:
(1) Fixing the price of commodities for resale to a third party;
(2) Restricting the minimum price of commodities for resale to a third party; or
(3) Other monopoly agreements as determined by the Anti-monopoly Law Enforcement Agency under the State Council.
Both the Horizontal Monopoly Agreements and the Vertical Monopoly Agreements are expressly prohibited by the AML. However, Article 15 of AML states that if the business operators can prove that monopoly agreement meets any of the following circumstances, the monopoly agreement is exempt from the above mentioned prohibitions:
(1) For the purpose of improving technologies, researching, and developing new products;
(2) For the purpose of upgrading product quality, reducing costs, improving efficiency, unifying product specifications or standards, or carrying out professional labor division;
(3) For the purpose of enhancing operational efficiency and reinforcing the competitiveness of small and medium-sized business operators;
(4) For the purpose of realizing public interests such as conserving energy, protecting the environment and providing disaster relief, etc.;
(5) For the purpose of mitigating the severe decrease of sales volume or obviously excessive production during economic recessions;
(6) For the purpose of protecting the justifiable interests of the foreign trade or foreign economic cooperation; or
Moreover, with regard to monopoly agreements, the Provisions against Price Fixing (NDRC, February 1, 2011) provides further regulations on the price-related monopoly agreements. According to the provisions, price-related monopoly agreements cover specific agreements, decisions and other concerted behaviors. The factors to identify the existence of concerted behaviors including: (1) Whether or not business operator's price behavior is consistent; (2) Whether or not business operator has communicated with each other. Besides, the factors also relate to the change of market vehicle, market demands and so on.
2. Abuse of Dominant Market Position
According to the AML, “Dominant market position” refers to a market position held by the business operators that have the ability to control the price or quantity of commodities or other trading conditions in the relevant market or block or affect the entry of other business operators into the relevant market.
A business operator may be presumed to have a dominant market position under any of the following circumstances, order Article 19 of the AML:
(1) The market share of one business operator accounts for 1/2 or more in the relevant market;
(2) The joint market share of two business operators accounts for 2/3 or more in the relevant market; or
(3) The joint market share of three business operators accounts for 3/4 or more in the relevant market.
The following factors are used to ascertain whether or not a business operator has the dominant market position: the market share and competitive status in the relevant market, the ability to control the sales market or the raw material supply market, the financial and technological conditions, the extent of reliance by other business operators, the degree of difficulty for other business operators to enter the relevant market and so on.
3. Concentration of business operators
The “Concentration of business operators” refers to any of the following circumstances according to the AML: (1) Merger of business operators; (2) A business operator acquires control over other business operators by acquiring their equities or assets; or (3) A business operator acquires control over other business operators or is able to exert a decisive influence on other business operators by contract or any other means.
However, the AML also indicates, not all concentration of business operators will be prohibited, business operators need to declare in advance only when reaching the standards of declaration prescribed by the State Council.
A Business operator’s turnover objectively and specifically reflects its economic ability, the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators (State Council, August 3, 2008) adopts the index of “turnover” as the standards of declaration. The Article 3 of the Provisions gives, a concentration of undertakings reaches any of the following thresholds, need to file a prior notification, otherwise the concentration may not be implemented:
(1) the combined worldwide turnover of all the undertakings concerned in the preceding financial year is more than RMB 10 billion yuan, and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year is more than RMB 400 million yuan; or
(2) the combined nationwide turnover within China of all the undertakings concerned in the preceding financial year is more than RMB 2 billion yuan, and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year is more than RMB 400 million yuan.
Besides, the provision states that if a concentration of undertakings does not reach any of the above mentioned standards, but the facts and evidences collected in accordance with the prescribed procedures indicate that such concentration effects is likely to eliminate or restrict competition, the competent department is required to initiate an investigation.
The AML states, the enforcement agency under the State Council need to make a decision to prohibit the concentration of business operators if it eliminate or restrict competition. However, if the business operators can prove either that the favorable impact of the concentration on competition obviously exceeds the adverse impact, or that the concentration meets the public interests, the concentration may be approved.
Moreover, with regard to the approved concentration of business operators, the enforcement agency may decide to attach restrictive conditions for reducing the adverse impact of such concentration on competition. At the same time, the decision on prohibiting the concentration of business operators or a decision on attaching restrictive conditions to the concentration need to be timely announced.
Generally speaking, the attaching restrictive conditions to the concentration will be separated into 3 classes:
(1) To divesture of some of the assets or businesses and the behaviors in connection to business operators to be concentrated (the“Structure Relief”).
The Interim Provisions on the Divestiture of Assets or Business in the Concentration of Business Operators (the MOFCOM, July 5, 2010) requires, the divestiture obligor need to find a proper purchaser and enter into the sales agreement and other relevant agreements; if the divestiture obligor fails to complete a default divestiture within the specified time limit, the party who is entrusted with divestiture (the “divestiture trustee”) need to find a proper purchaser within the time limit and reach the sales agreement or other relevant agreements (the “entrusted divestiture”).
Besides, the Provisions also requires, the divestiture obligor need to transfer the divested businesses to the purchaser and go through all the legal procedures relating to ownership transfer, within three months after the date of the execution of the sales agreement and other relevant agreements. The MOFCOM may extend the time limit according to the application and explanations provided by the divestiture obligor.
(2) To require business operators to be concentrated open their basic facilities on net or platform, license their key technologies (the “Behavior Relief”).
The Behavior Relief requires parties to the transaction committed will not conduct new takeover, not provide products or services to their divestiture enterprises, not establish new enterprises, not increase the shareholding ownership of specific third party within a certain period. And parties to the transaction need to timely report their circumstance for change of shareholding.
(3) The Comprehensive Relief consists of both structure relief and behavior relief.
4. Penalties
For business operators reach and fulfill a monopoly agreement, the business operators will be confiscated the illegal gains and imposed a fine of 1% up to 10% of the sales revenue made in the previous year. However, if the reached monopoly agreement has not been fulfilled, a fine of less than 500,000 yuan may be imposed.
For business operators abuse their dominant market position, they will be confiscated the illegal gains, and imposed a fine of 1% up to 10% of the total sales volume made in the previous year.
With regard to business operators implement the concentration in violation of the AML, the enforcement agency will order them to stop the concentration, to dispose shares or assets, transfer the business or adopt other necessary measures to restore the market situation before the concentration within a time limit, and may impose a fine of less than 500,000 yuan for these business operators.
Conclusion
The promulgation of the AML is an important step for China regarding leveling the playing field for private companies competing with state owned enterprises and administrative monopolies. The AML is geared to international standards, such as it adopts “three basic monopolistic conducts” - Monopoly Agreements, Abuse of Dominant Market Position and Concentration of business operators. Some interesting cases are making their way through the courts and government departments, involving various provisions of the AML and its regime in China – these cases are sure to test the metal of the regime.
ABOUT THE AUTHOR: Sara Xuan
Sarah Xuan is an Associate in the MMLC Group.
Copyright MMLC Group
More information about MMLC Group
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
As early as 1994, China planned to formulate its Anti-Monopoly Law, a plan that lasted for 13 years. Finally in 2007, Congress promulgated China's first Anti-Monopoly Law (the "AML"). The Law became effective on August 1, 2008.
Before the enactment of the AML, the relevant anti-monopoly provisions were set off in the Interim Provisions on the Takeover of Domestic Enterprises by Foreign Inverstors (Revised 2006) (the "Decree 10"), which took effect on 2006 and were amended again in 2009 by the Ministry of Commerce (the “ MOFCOM”).
The AML first introduced the concept of “Concentration of Business Operators”. Subsequently, a number of regulations or guiding opinions on the “Concentration of Business Operators” have been enacted. These include (1) the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators, which is clarified the standards for the declaration of concentration of business operators, issued by the State Council and took effect on August 3, 2008; (2) the Measure for the Undertaking Concentration Examination, issued by the MOFCOM on January 1, 2010, which set forth the procedures for anti-monopoly examination of undertaking concentration; (3) the Measure for the Undertaking Concentration Declaration, also enacted by the MOFCOM on January 1, 2010; (4) the Guiding Opinions of the Anti-monopoly Bureau of the Ministry of Commerce on the Declaration of the Concentration of Business Operators, which came into force on January 5, 2009; (5) the Guiding Opinions of the Anti-monopoly Bureau of the Ministry of Commerce on the Declaration Documents and Materials of the Concentration of Business Operators, enacted by the MOFCOM on January 5, 2009; (6) the Interim Provisions on the Divestiture of Assets or Business in the Concentration of Business Operators, issued by the MOFCOM on July 5, 2010; and (7) the Interim Provisions on Assessing the Impact of Concentration of Business Operators on Competition issued by the MOFCOM on September 5, 2011.
On January 4, 2011 and on January 7, 2011, the antitrust enforcement authorities in China-the National Development and Reform Commission (the "NDRC") and the SAIC respectively promulgated five new regulations implementing the AML: There are (1) the Provisions against Price Fixing, Provisions for the Industry and Commerce Administrations on the Prohibition of Monopolistic Agreements, the Provisions for the Industry and Commerce Administrations on the Prohibition of Abuse of Dominant Market Position, and the Provisions for the Industry and Commerce Administrations to Stop Acts of Abusing Administrative Power for the Purpose of Eliminating or Limiting Competition which apply to the price-related monopolization agreements, the price-related abuse of dominant market status by business operators and the price-related abuse of administration power by administration agencies, with the purpose of preventing and curbing the price fixing acts,; (2) the Provisions on the Administrative Procedures for Law Enforcement against Price Fixing, which provides further guidance as to how to conduct investigations in relation to price-related breaches of the AML. All of the above mentioned five newly issued regulations came into force on February 1, 2011.
Enforcement Agencies for Anti-Monopoly Laws and Regulations
At present, four government authorities are respectively in charge of enforcing various anti-monopoly regulations:
(1) the Enforcement Office for Anti-Monopoly and Countering Unfair Competition of the SAIC (http://www.saic.gov.cn/fldyfbzdjz/jgsz/). The function of the Office is to stipulate regulations on anti-monopoly and countering unfair competition issue; to enforce the work of anti-monopoly; to investigate unfair competition, bribery claims, smuggling and other illegal economic cases. It is mainly responsible for enforcement work regarding agreements, the abuse of dominant market position and the abuse of administrative power to eliminate or restrict competition (except for price-fixing behavior);
(2) the Anti-monopoly Bureau of the MOFCOM (http://fldj.mofcom.gov.cn/. It is responsible for reviewing on concentrations of undertakings according to law and investigating into cases on concentrations of undertakings reported by anti-monopoly enforcement authorities;
(3) the Department of Price Supervision of the NDRC (http://en.ndrc.gov.cn/mfod/t20081218_252213.htm. It is in charge of drafting administrative laws and regulations for price supervision and inspection; guiding and organizing price supervision and inspection, and handling activities and cases related to commodity prices, service prices and fee collection involving violation of price-related laws by central government agencies, handling price monopoly activities and reconsideration cases and appeals concerning the punishment of price violations and decisions; and
(4) Besides, the Anti-Monopoly Committee founded by the State Council on 2008 is responsible for coordination of the above mentioned three agencies.
It is called “3+1” mode for enforcement of the anti-monopoly regime in China
Analysis of Key Anti-Monopoly Laws and Regulations
The AML is the most important law in the anti-monopoly regime. The AML stipulates that “monopolistic conducts” includes: (1) Monopoly agreements reached between business operators; (2) Abuse of dominant market position by business operators; and (3) Concentration of business operators that may have the effect of eliminating or restricting competition.
1. Monopoly Agreements
The Monopoly Agreements reached between business operators is the most common and typical monopolistic behavior in the market, it brings serious harm to market competition. According to the Article 13 of the AML, “Monopoly Agreements” refers to agreements, decisions or other concerted behaviors that eliminate or restrict competition. It consists of the “Horizontal Monopoly Agreements” and the “Vertical Monopoly Agreements”.
Horizontal Monopoly Agreements means the competing business operators reach any of the following agreements with each other:
(1) Fixing or changing the price of commodities;
(2) Restricting the production quantity or sales volume of commodities;
(3) Dividing the sales market or the raw material supply market;
(4) Restricting the purchase of new technology or new facilities or the development of new technology or new products;
(5) Jointly boycotting transactions; or
(6) Other monopoly agreements as determined by the Anti-monopoly Law Enforcement Agency under the State Council.
Vertical Monopoly Agreements refers to the business operators make any of the following agreements with their trading parties:
(1) Fixing the price of commodities for resale to a third party;
(2) Restricting the minimum price of commodities for resale to a third party; or
(3) Other monopoly agreements as determined by the Anti-monopoly Law Enforcement Agency under the State Council.
Both the Horizontal Monopoly Agreements and the Vertical Monopoly Agreements are expressly prohibited by the AML. However, Article 15 of AML states that if the business operators can prove that monopoly agreement meets any of the following circumstances, the monopoly agreement is exempt from the above mentioned prohibitions:
(1) For the purpose of improving technologies, researching, and developing new products;
(2) For the purpose of upgrading product quality, reducing costs, improving efficiency, unifying product specifications or standards, or carrying out professional labor division;
(3) For the purpose of enhancing operational efficiency and reinforcing the competitiveness of small and medium-sized business operators;
(4) For the purpose of realizing public interests such as conserving energy, protecting the environment and providing disaster relief, etc.;
(5) For the purpose of mitigating the severe decrease of sales volume or obviously excessive production during economic recessions;
(6) For the purpose of protecting the justifiable interests of the foreign trade or foreign economic cooperation; or
Moreover, with regard to monopoly agreements, the Provisions against Price Fixing (NDRC, February 1, 2011) provides further regulations on the price-related monopoly agreements. According to the provisions, price-related monopoly agreements cover specific agreements, decisions and other concerted behaviors. The factors to identify the existence of concerted behaviors including: (1) Whether or not business operator's price behavior is consistent; (2) Whether or not business operator has communicated with each other. Besides, the factors also relate to the change of market vehicle, market demands and so on.
2. Abuse of Dominant Market Position
According to the AML, “Dominant market position” refers to a market position held by the business operators that have the ability to control the price or quantity of commodities or other trading conditions in the relevant market or block or affect the entry of other business operators into the relevant market.
A business operator may be presumed to have a dominant market position under any of the following circumstances, order Article 19 of the AML:
(1) The market share of one business operator accounts for 1/2 or more in the relevant market;
(2) The joint market share of two business operators accounts for 2/3 or more in the relevant market; or
(3) The joint market share of three business operators accounts for 3/4 or more in the relevant market.
The following factors are used to ascertain whether or not a business operator has the dominant market position: the market share and competitive status in the relevant market, the ability to control the sales market or the raw material supply market, the financial and technological conditions, the extent of reliance by other business operators, the degree of difficulty for other business operators to enter the relevant market and so on.
3. Concentration of business operators
The “Concentration of business operators” refers to any of the following circumstances according to the AML: (1) Merger of business operators; (2) A business operator acquires control over other business operators by acquiring their equities or assets; or (3) A business operator acquires control over other business operators or is able to exert a decisive influence on other business operators by contract or any other means.
However, the AML also indicates, not all concentration of business operators will be prohibited, business operators need to declare in advance only when reaching the standards of declaration prescribed by the State Council.
A Business operator’s turnover objectively and specifically reflects its economic ability, the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators (State Council, August 3, 2008) adopts the index of “turnover” as the standards of declaration. The Article 3 of the Provisions gives, a concentration of undertakings reaches any of the following thresholds, need to file a prior notification, otherwise the concentration may not be implemented:
(1) the combined worldwide turnover of all the undertakings concerned in the preceding financial year is more than RMB 10 billion yuan, and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year is more than RMB 400 million yuan; or
(2) the combined nationwide turnover within China of all the undertakings concerned in the preceding financial year is more than RMB 2 billion yuan, and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year is more than RMB 400 million yuan.
Besides, the provision states that if a concentration of undertakings does not reach any of the above mentioned standards, but the facts and evidences collected in accordance with the prescribed procedures indicate that such concentration effects is likely to eliminate or restrict competition, the competent department is required to initiate an investigation.
The AML states, the enforcement agency under the State Council need to make a decision to prohibit the concentration of business operators if it eliminate or restrict competition. However, if the business operators can prove either that the favorable impact of the concentration on competition obviously exceeds the adverse impact, or that the concentration meets the public interests, the concentration may be approved.
Moreover, with regard to the approved concentration of business operators, the enforcement agency may decide to attach restrictive conditions for reducing the adverse impact of such concentration on competition. At the same time, the decision on prohibiting the concentration of business operators or a decision on attaching restrictive conditions to the concentration need to be timely announced.
Generally speaking, the attaching restrictive conditions to the concentration will be separated into 3 classes:
(1) To divesture of some of the assets or businesses and the behaviors in connection to business operators to be concentrated (the“Structure Relief”).
The Interim Provisions on the Divestiture of Assets or Business in the Concentration of Business Operators (the MOFCOM, July 5, 2010) requires, the divestiture obligor need to find a proper purchaser and enter into the sales agreement and other relevant agreements; if the divestiture obligor fails to complete a default divestiture within the specified time limit, the party who is entrusted with divestiture (the “divestiture trustee”) need to find a proper purchaser within the time limit and reach the sales agreement or other relevant agreements (the “entrusted divestiture”).
Besides, the Provisions also requires, the divestiture obligor need to transfer the divested businesses to the purchaser and go through all the legal procedures relating to ownership transfer, within three months after the date of the execution of the sales agreement and other relevant agreements. The MOFCOM may extend the time limit according to the application and explanations provided by the divestiture obligor.
(2) To require business operators to be concentrated open their basic facilities on net or platform, license their key technologies (the “Behavior Relief”).
The Behavior Relief requires parties to the transaction committed will not conduct new takeover, not provide products or services to their divestiture enterprises, not establish new enterprises, not increase the shareholding ownership of specific third party within a certain period. And parties to the transaction need to timely report their circumstance for change of shareholding.
(3) The Comprehensive Relief consists of both structure relief and behavior relief.
4. Penalties
For business operators reach and fulfill a monopoly agreement, the business operators will be confiscated the illegal gains and imposed a fine of 1% up to 10% of the sales revenue made in the previous year. However, if the reached monopoly agreement has not been fulfilled, a fine of less than 500,000 yuan may be imposed.
For business operators abuse their dominant market position, they will be confiscated the illegal gains, and imposed a fine of 1% up to 10% of the total sales volume made in the previous year.
With regard to business operators implement the concentration in violation of the AML, the enforcement agency will order them to stop the concentration, to dispose shares or assets, transfer the business or adopt other necessary measures to restore the market situation before the concentration within a time limit, and may impose a fine of less than 500,000 yuan for these business operators.
Conclusion
The promulgation of the AML is an important step for China regarding leveling the playing field for private companies competing with state owned enterprises and administrative monopolies. The AML is geared to international standards, such as it adopts “three basic monopolistic conducts” - Monopoly Agreements, Abuse of Dominant Market Position and Concentration of business operators. Some interesting cases are making their way through the courts and government departments, involving various provisions of the AML and its regime in China – these cases are sure to test the metal of the regime.
ABOUT THE AUTHOR: Sara Xuan
Sarah Xuan is an Associate in the MMLC Group.
Copyright MMLC Group
More information about MMLC Group
View all articles published by MMLC Group
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
