By Susan Ning and Huang Jing
On 7 September 2011, the Shanxi Combined Transportation Group Company (SCTG) filed an administrative law suit with the Taiyuan Xinghualing District People’s Court against the Taiyuan Bureau of Railways (the "SCTG Case"). On 15 September 2011, the Taiyuan Xinghualing District People’s Court accepted the SCTG Case.
SCTG alleged that it had submitted two applications to the Taiyuan Bureau of Railways for establishing new railway ticket agent stores on 25 January 2011; but Taiyuan Bureau of Railways did not respond to such applications. According to SCTG, Taiyuan Bureau of Railways’ conduct was a violation of the Anti-monopoly Law (AML), and constituted administrative omission. Thus SCTG filed the administrative lawsuit.
SCTG is a Taiyuan company active in many transportation related services. It has been running the railway ticket agent business since 1987, and currently owns 15 railway ticket agent stores in Taiyuan city. Ever since 2007, SCTG has been applying for establishing new railway ticket agent stores with the Taiyuan Bureau of Railways for 4 years, but has never received any responses.
According to the current regulations in China, local bureaus of railways, like Taiyuan Bureau of Railways, are in charge of granting authorization to railway ticket agents. The local bureaus of railways are also the authority in charge of the operation of railways. Since 2006, the Taiyuan Bureau of Railways has authorized 74 new railway ticket agents, all of which are controlled by affiliates of Taiyuan Bureau of Railways.
SCTG alleged that Taiyuan Bureau of Railways had abused their dominance in the railway ticket agent market, unfairly deprived other non-related applicant like SCTG the right to engage in the railway ticket agent service; and that this was in breach of the AML.
It is not exactly clear what SCTG’s petitions are from public information .
China’s railway authorities faced lots of blames for its monopolistic management and operation of the railway and railway related industries. The SCTG Case represents the pressing demand of the public for an open market and fair competition in these industries.
The interesting issue of the SCTG Case is that the case is an administrative litigation rather than a civil litigation, although SCTG accused Taiyuan Bureau of Railways for abuse of dominance, rather than abuse of administrative power to eliminate and restrict competition.
The AML only provides that civil litigation can be initiated against business operators’ monopolistic conducts (i.e. Article 50), and does not expressly provide administrative litigation as the dispute resolution mechanism for alleged abuse of administrative powers. If the government agencies abuse its administrative power to eliminate and restrict competition, according to Article 51 of the AML, its superior authority shall order it to correct such action.
It remains to be seen how the SCTG Case would proceed after the acceptance.