8.2 Overview of Anti-monopoly Law

Section III Overview of Anti-monopoly Law

I. Overview of Monopoly and Anti-monopoly Law

(I) Overview of Monopoly

Monopoly has a broad and narrow understanding. Monopoly in a narrow sense refers to economic monopoly, that is, monopolistic behavior that occurs in the process of commodity production and exchange, that is, the activities of commodity operators to control the behavior of other operators or consumers through joint means or by taking advantage of market dominance. Monopoly can have the effect of restricting and excluding free competition.

the performance of monopoly is closely related to a country's political system, economic development level, cultural tradition, scientific and technological progress and other factors. In countries, regions or specific periods where the government implements industrial control, monopoly is generally manifested as a monopoly led by the government, such as the government's investment in postal services, aviation and energy products. This monopoly is guaranteed by legislation and belongs to "legal monopoly". In the process of China's transition to the socialist market economy system, the government sometimes uses its administrative power to improperly intervene in economic life and hinder fair competition. For example, the local government restricts the local sales of foreign products, which is called "administrative monopoly".

not all monopolies are illegal. If the government takes measures to prohibit or restrict certain monopolistic behaviors, it is "anti-monopoly"; If licensing measures are taken for certain monopolies, it is "except for anti-monopoly".

(II) Overview of the Anti-monopoly Law

The Anti-monopoly Law is the legislation that stipulates the anti-monopoly object, scope of application, law enforcement agencies, investigation procedures and management measures. In the west, anti-monopoly legislation has developed and improved with the government's control over the market economy. The earliest anti-monopoly law recognized by academic circles is the Sherman Act of the United States in 189, that is, the Act of Resisting Illegal Restriction and Monopoly to Protect Commerce and Trade. Later, the United States also promulgated the Clayton Act, the Federal Trade Commission Act, Sailor Kefer Wilfart, and the Williams Act. The anti-monopoly legislation of other countries includes: Restrictive Trade Act of Britain, Law against Restriction of Competition of Germany, Law on Prohibiting Private Monopoly and Ensuring Fair Trade of Japan, Law on Restricting Monopoly and Fair Trade of South Korea and Law on Monopoly and Restrictive Trade Conduct of India.

on August 3th, 27, the 29th meeting of the 1th the National People's Congress Standing Committee (NPCSC) officially passed the Anti-Monopoly Law of the People's Republic of China (hereinafter referred to as the "Anti-Monopoly Law"), which came into effect on August 1st, 28. Previously, the State Council and its relevant functional departments issued some rules and policies to regulate monopoly, such as the Provisions on Prohibiting Regional Blockade in Market Economy Activities promulgated by the State Council in 21, the Interim Provisions on Stopping Price Monopoly Acts promulgated by the National Development and Reform Commission in 23, and the Provisions on Prohibiting Public Enterprises from Restricting Competition Acts promulgated by the State Administration for Industry and Commerce in 1993. In addition, the Anti-Unfair Competition Law, the Price Law and the Interim Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors also contain relevant provisions on anti-monopoly.

The purpose of China's Anti-monopoly Law is to prevent and stop monopolistic behavior, protect fair competition in the market, improve the efficiency of economic operation, safeguard the interests of consumers and the public, and promote the healthy development of the socialist market economy.

II. Monopolistic Behavior

(I) Overview of Monopolistic Behavior

The Anti-Monopoly Law stipulates three kinds of monopolistic behaviors that restrict and exclude the effect of competition: the operators reach a monopoly agreement; Operators abuse market dominance; Concentration of operators that have or may have the effect of eliminating or restricting competition. Whether these three behaviors affect the effective competition mechanism and whether to take necessary legal sanctions requires the national anti-monopoly law enforcement agencies to make a decision after investigation according to law.

The Anti-Monopoly Law also specifically stipulates the abuse of administrative power to restrict and exclude competition. This kind of behavior belongs to the abuse of power by government agencies, not the market behavior of commodity operators. In principle, anti-monopoly law enforcement agencies cannot directly investigate and deal with it, but the higher authorities order the relevant government agencies to correct and punish the relevant responsible personnel according to law.

(II) Monopoly Agreement

According to the Monopoly Law, a monopoly agreement refers to an agreement, decision or other concerted action that excludes or restricts competition. According to the characteristics of the agreement, monopoly agreement can be divided into horizontal monopoly agreement and vertical monopoly agreement.

1. Horizontal monopoly agreement

A horizontal monopoly agreement refers to an agreement reached between competing operators. These operators usually produce and operate the same or similar products and services. In order to avoid mutual losses in the competition, they may unite to form an alliance. The horizontal monopoly agreements prohibited by the Anti-Monopoly Law include the following forms: (1) fixing or changing commodity prices, such as uniformly raising the price of beef noodles in a restaurant and uniformly determining intermediary fees in a marriage agency; (2) limiting the production quantity or sales quantity of commodities; (3) Divide the sales market or raw material purchasing market; (4) restricting the purchase of new technologies and equipment or restricting the development of new technologies and products; (5) boycott the transaction; (6) Other monopoly agreements recognized by anti-monopoly law enforcement agencies in the State Council.

collusive tendering and bidding prohibited in the Anti-Unfair Competition Law belongs to a horizontal monopoly agreement.

2. vertical monopoly agreement

vertical monopoly agreement refers to the agreement reached between upstream and downstream enterprises with product supply and service relationship. This kind of agreement may cause the upstream enterprises to control the downstream enterprises, which is not conducive to the effective competition of the downstream enterprises. The Anti-Monopoly Law prohibits commodity operators from reaching the following vertical monopoly agreements with counterparties: (1) fixing the price of goods resold to third parties; (2) Limiting the lowest price of goods for resale to a third party; (3) Other monopoly agreements recognized by the anti-monopoly law enforcement agencies in the State Council, such as tying agreements and agreements that force downstream enterprises to buy the minimum quantity of products.

3. Exceptions to application

If the monopoly agreement reached by the operators conforms to the industrial policies encouraged or licensed by the state, the exemption system can be applied, and the anti-monopoly law enforcement agencies will not take investigation and handling measures against them, for example, the monopoly agreement is concluded for the purpose of enhancing the competitiveness of small and medium-sized enterprises, or for the purpose of saving energy and protecting the environment.

4. Prohibition of trade associations

As a non-governmental organization, trade associations are self-regulatory organizations composed of all or part of enterprises in the same industry on a voluntary basis. The basic function of trade association is to provide information communication platform for enterprises in this industry, provide planning and consulting services for the development of this industry, and coordinate the relations between enterprises in this industry. At the same time, trade associations are also a "bridge" between enterprises and the government, and the government can promote the implementation of its legislative policies through trade associations.

in order to prevent trade associations from unilaterally emphasizing the interests of the industry and harming the overall interests of society and consumers, the Anti-Monopoly Law prohibits trade associations from organizing operators in their own industries to engage in monopoly agreements prohibited by legislation.

(III) Abuse of dominant market position

Abuse of dominant market position refers to the behavior of operators with dominant market position to exclude or restrict competition in an improper way. It is only possible for competitive operators or government-licensed commodity operators to implement this behavior. For example, Microsoft Corporation of the United States "bundled" the sale of browsers when selling its windows operating system.

1. Determination of market dominance

The Anti-Monopoly Law stipulates the basic factors for determining that an operator has a market dominance, such as the operator's market share, the ability to control the sales market and the operator's technical conditions. Under any of the following circumstances, the operator can be presumed to have a dominant market position: (1) an operator's market share in the relevant market reaches half; (2) The total market share of the two operators in the relevant market reaches two thirds; (3) The total market share of the three operators in the relevant market reaches three quarters. However, in the circumstances specified in the preceding items (2) and (3), if some operators have a market share of less than one tenth, they should not be presumed to have a dominant market position. An operator presumed to have a dominant market position shall not be deemed to have a dominant market position if there is evidence to prove that he does not have a dominant market position.

2. Manifestations of abuse of market dominance

The Anti-Monopoly Law stipulates the following behaviors that prohibit abuse of market dominance: (1) Selling goods at unfairly high prices or buying goods at unfairly low prices, that is, unreasonably high prices (or profiteering) and unreasonably low prices; (2) selling goods at a price lower than the cost without justifiable reasons, that is, improperly selling at a low price; (3) refusing to trade with the counterparty without justifiable reasons, that is, improperly refusing to trade; (4) Without justifiable reasons, restricting the counterparty to trade only with it or only with its designated operators, that is, improperly restricting trading; (5) tying goods without justifiable reasons, or attaching other unreasonable trading conditions when trading, that is, tying improperly or attaching unreasonable conditions; (6) Without justifiable reasons, differential treatment is applied to counterparties with the same conditions in terms of trading conditions such as trading price, that is, improper differential treatment; (7) Other acts of abusing market dominance as determined by the anti-monopoly law enforcement agencies in the State Council.

The abuse of market dominance stipulated in the Anti-Unfair Competition Law includes purchase restriction, tying, and underpricing.

(4) concentration of business operators

concentration of business operators refers to the activities of commodity operators to improve the competitiveness of enterprises through the adjustment of property rights structure or the change of enterprise organizational form. The Anti-monopoly Law stipulates three forms of concentration of operators: (1) merger of operators; (2) The operator obtains control over other operators by acquiring equity or assets; (3) The operator obtains control over other operators through contracts or can exert decisive influence on other operators.

concentration of operators can make enterprises form economies of scale and expand their market share. Therefore, the concentration of operators does not of course constitute a monopoly prohibited by legislation. In order to prevent the concentration of business operators from restricting and eliminating competition, the Anti-Monopoly Law stipulates the review system of concentration of business operators, that is, if the concentration of business operators meets the declaration standards stipulated by the State Council, they shall report to the anti-monopoly law enforcement agencies in the State Council in advance, and the concentration shall not be implemented without reporting. After the initial review or re-review, the national anti-monopoly law enforcement agency makes a decision to prohibit or permit the concentration of operators.

For the concentration of business operators that is not prohibited, the anti-monopoly law enforcement agencies in the State Council may decide to attach restrictive conditions to reduce the adverse effects of concentration on competition. Where foreign capital merges with domestic enterprises or participates in concentration of business operators in other ways, which involves national security, it shall conduct national security review in accordance with the relevant provisions of the state in addition to the centralized review of business operators.

(5) Abuse of administrative power to exclude and restrict competition

Abuse of administrative power to exclude and restrict competition refers to the behavior of state administrative organs or organizations authorized by laws and regulations with the function of managing public affairs, using their social and economic management power to restrict or control the market transactions of operators and consumers, thus affecting the effective competition order and the credibility of the government.

The Anti-Monopoly Law stipulates that the following acts of abusing administrative power to exclude or restrict competition are prohibited:

1. That is, abusing administrative power, restricting or disguised restricting units or individuals to operate, purchase and use goods provided by their designated operators.

2. hinder the cross-regional circulation of commodities. That is, abusing administrative power and carrying out the following acts that hinder the free circulation of goods between regions: (1) setting discriminatory charging items, implementing discriminatory charging standards or setting discriminatory prices for foreign goods; (2) stipulate different technical requirements and inspection standards for foreign goods from local similar goods, or take discriminatory technical measures such as repeated inspection and certification to restrict foreign goods from entering the local market; (3) Take administrative license specifically for foreign goods to restrict foreign goods from entering the local market; (4) set up checkpoints or take other measures to prevent foreign goods from entering or local goods from being shipped out; (5) other acts that hinder the free circulation of goods between regions.

3. hinder cross-regional bidding. That is, abusing administrative power to exclude or restrict foreign operators from participating in local bidding activities by setting discriminatory qualification requirements, evaluation standards or not releasing information according to law.

4. hinder cross-regional investment. That is, abuse of administrative power, unequal treatment with local operators, etc., to exclude or restrict foreign operators from investing in the local area or setting up branches.

5. Forcing business operators to engage in monopolistic behavior. That is, abusing administrative power and forcing operators to engage in monopolistic behaviors stipulated in the Anti-Monopoly Law.

6. formulate regulations that exclude or restrict competition.

iii. Anti-monopoly implementation mechanism

(I) Anti-monopoly law enforcement agencies

Anti-monopoly law enforcement agencies are administrative agencies that exercise anti-monopoly investigation and review powers according to law and impose sanctions on illegal and monopolistic behaviors. At present, the anti-monopoly law enforcement agencies in the State Council are the National Development and Reform Commission, the Ministry of Commerce and the State Administration for Industry and Commerce. The price supervision department set up in the National Development and Reform Commission is responsible for investigating price monopoly, the Law Department set up in the Ministry of Commerce is responsible for anti-monopoly investigation in domestic and foreign trade and international economic cooperation, and the Fair Trade Bureau set up in the State Administration for Industry and Commerce is responsible for monopolistic behavior in market transactions. In addition, some industry regulators also have certain anti-monopoly law enforcement powers, such as CBRC and SERC. In order to reduce the conflict of multiple law enforcement and improve the efficiency of anti-monopoly, the Anti-monopoly Law has made practical provisions on the establishment of anti-monopoly institutions: first, the establishment of anti-monopoly committees, and second, the establishment of two-level anti-monopoly law enforcement agencies.

The Anti-monopoly Committee was established in the State Council, responsible for organizing, coordinating and guiding the anti-monopoly work, formulating and issuing anti-monopoly guidelines, and coordinating the anti-monopoly administrative law enforcement work. The institutions responsible for anti-monopoly law enforcement as stipulated in the State Council are responsible for anti-monopoly law enforcement according to law, and may authorize the corresponding institutions of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government to be responsible for anti-monopoly law enforcement according to the law.

(II) Anti-monopoly investigation

Anti-monopoly investigation is an organic law enforcement process consisting of a series of links.

1. initiation of anti-monopoly investigation

anti-monopoly investigation can be initiated by anti-monopoly law enforcement agencies ex officio or according to reports. Anti-monopoly law enforcement agencies investigate suspected monopolistic behaviors according to law. Any unit or individual has the right to report the suspected monopolistic behavior to the anti-monopoly law enforcement agency. Anti-monopoly law enforcement agencies shall keep confidential the informants.

2. Anti-monopoly investigation measures

Anti-monopoly law enforcement agencies can take the following measures when investigating suspected monopolistic behaviors: (1) entering the business premises or other relevant places of the investigated operators for inspection; (2) Ask the operators, interested parties or other relevant units or individuals under investigation and ask them to explain the relevant situation; (3) consulting and copying the relevant documents, agreements, accounting books, business correspondence, electronic data and other documents and materials of the operators, interested parties or other relevant units or individuals under investigation; (4) sealing up and detaining relevant evidence; (5) Inquire the bank account of the operator.

3. suspension of anti-monopoly investigation

the suspected monopolistic behavior investigated by anti-monopoly law enforcement agencies was