It is generally known that the antitrust enforcement powers are shared by three government authorities in China: the Ministry of Commerce (“MOFCOM”), which is responsible for merger control, the National Development and Reform Commission (“NDRC”), which is responsible for price-related monopoly conducts, and the State Administration for Industry and Commerce (“SAIC”), which is responsible for non-price related monopoly conducts. Compared to the former two authorities, SAIC keeps a relatively low profile on its antitrust enforcement actions.
On July 11, Director General of the Anti-Monopoly and Anti-Unfair Competition Enforcement Bureau of SAIC (“AMAUCEB”), Ms. Ren Airong (任爱荣) made a speech at a conference and introduced the fruits of antitrust enforcement by SAIC since the Anti-Monopoly Law (“AML”) came into effect on August 1, 2008.
Authorized by SAIC, AMAUCEB is in charge of the administrative enforcement of the AML and the Anti-Unfair Competition Law (“AUCL”). Its enforcement efforts involve dealing with monopoly conducts, unfair-competition conducts and other illegal commercial activities of business operators.
- SAIC’s actions under the AML
According to Ms. Ren, since the AML came into force in 2008, AMAUCEB has actively heard complaints from consumers and business operators, and organized antitrust investigations into high-profile cases. So far, SAIC has authorized provincial AICs in Jiangsu, Jiangxi, Henan, Zhejiang, Sichuan, Liaoning, Hunan, Hei Longjiang, and Yunan to launch investigation on a total of 14 cases, among which 3 cases have been closed and 1 case is suspended .1
- SAIC’s administrative rules on anti-monopoly enforcement
Up to the present, SAIC has promulgated 5 rules to fulfill its responsibilities under the AML, which provide a framework for the antitrust enforcement by SAIC and provincial Administrations for Industry and Commerce (“AICs”).
|Title of Rules
|Provisions on Prohibiting Monopoly Agreements by Administrations for Industry and Commerce
|Provisions on Prohibiting Abuse of Dominance by Administrations for Industry and Commerce
|Provisions on Preventing Abuse of Administrative Power to Eliminate or Restrict Competition by Administrations for Industry and Commerce
|Procedural Rules of Administration of Industry and Commerce on Investigation of Cases regarding Monopoly Agreements and Abuse of Dominance
|Procedural Rules of Administration of Industry and Commerce on Prohibition of Abuse of Administrative Power to Eliminate or Restrict Competition
- SAIC’s other enforcement efforts
Besides the AML related actions, in the past 5 years all levels of AICs have investigated and imposed punishment on over 3,000 cases where public enterprises such as water, electricity and gas suppliers forced transactions or restricted competition, which substantially protects market competition and consumers’ welfare.
- SAIC’s international cooperation
According to Ms. Ren, SAIC actively communicates and cooperates with its counterparts in more than 40 countries and regions. In addition, it has signed Memorandum of Understanding on cooperation on antitrust affairs with the antitrust authorities of US, England, Russia, Korea, etc.
Though Ms. Ren stated that SAIC has closed 3 monopoly cases, we are only able to find information about one of them, which is in relation to the penalties imposed by the AIC of Jiangsu province on certain concrete manufacturers for entering into and executing a monopoly agreement.2 It seems that SAIC does not want to attract much public attention to its antitrust enforcement actions. We will continue to keep track of public information about any decisions of SAIC. In the meantime, we believe that SAIC will be more active going forward with its accumulated experience in AML enforcement practice.
1. During the investigation of the suspected monopolistic conduct, the undertakings being investigated may apply for suspension of investigation and make commitment to take specific measures within specified time approved by AIC to eliminate the effects brought about by the suspected violations.
2.In February 2011, Jiangsu Administration for Industry & Commerce issued sanctions against the Concrete Committee of the Construction Materials and Construction Machinery Industry Association of Lianyungang City and 16 concrete manufacturers for breach of the AML, by way of entering into a monopoly agreement. Jiangsu AIC ordered an injunction against the Association to cease the illegal conduct; as well as a fine of RMB 200,000. This is the first publicly released AML enforcement decision by the SAIC (which delegated power onto the provincial AIC) since the enactment of the AML in August 2008. For more details of this case, please refer to our article entitled “First Public Enforcement Decision by SAIC against Concrete Manufactures“.