# Presentation: 234221

## Overview of Anti-Monopoly  Legislation in China

- Anti-Monopoly Office
- Department of Treaty and Law
- Ministry of Commerce, P.R.C
- Dec. 2006

## The Development of China’s Competition Legislation

- 1st. Stage   Before the “Reforming and Opening” policy in  1978
- 2nd. Stage, 1978-1992: “Market-supplementing-planning approach”
- “Regulations on Development and Protection of Competition”(1980):
- 	“Competition must be introduced by breaking down regional blockades and departmental barriers. No locality or department is allowed to block the market. No locality or department should impose any ban on entry of goods made in other places. Localities should ensure that raw material be transferred out according to state plans and must not create any blockade. Departments in charge of industry, transport, finance and trade must revise any part or parts of their existing regulations and systems which impede competition so as to facilitate competition.”
-      The first official document about competition policy in China.

##     
3rd. Stage, Post 1992: Towards building “a socialist market economy”; diminishing roles of the “visible hand”. Especially after 2003: establishing a socialist market economy “from all aspects”.
    “Anti-unfair Competition Law”(1993), “The Law of Consumer Protection”(1993),“Price Law”(1998) and “Biding Law”(1999)
     “Provisional Rules for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors” (the “Provisional M&A Rules”).

      Drafting the AML (1994-present)

- 3rd. Stage, Post 1992: Towards building “a socialist market economy”; diminishing roles of the “visible hand”. Especially after 2003: establishing a socialist market economy “from all aspects”.
-     “Anti-unfair Competition Law”(1993), “The Law of Consumer Protection”(1993),“Price Law”(1998) and “Biding Law”(1999)
-      “Provisional Rules for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors”** **(the “Provisional M&A Rules”).
-       Drafting the AML (1994-present)

## Legislations On Cartel

** ****●****Price Cartel****:**
-    Price Law
-    Regulations on International Shipping
-  **●****Bid-rigging****:**
-     Anti-Unfair Competition Law
-     Law of Bidding

## Legislations on abuse of dominance

**Predatory pricing****:**
-    Anti-Unfair Competition Law Art.11
-    Price Law Art.14
-    Regulations on Telecommunication Art.42
**Tying**:
-    Anti-Unfair Competition Law Art.12
-     Regulations on Telecommunication Art.41

## Price Discrimination
    Price Law Art.14
   Electric Power Law Art.26
Refusing to Deal:
   Regulations on Telecommunication Art.17  Electricity Law Art.26
Forced Transaction:
    Anti-Unfair Competition Law Art. 6
   Regulations on Telecommunication Art.41

**    **Price Law Art.14
-    Electric Power Law Art.26
**Refusing to Deal****:**
-    Regulations on Telecommunication Art.17  Electricity Law Art.26
**Forced Transaction****:**
-     Anti-Unfair Competition Law Art. 6
-    Regulations on Telecommunication Art.41

## Prohibition on Abuse of IPR:
   Contract Law Art.329
   Regulations on Technology Importation Contract  Art.9
   Patent Law Art.51

-    **Contract Law** Art.329
-    **Regulations on Technology Importation Contract**  Art.9
-    **Patent Law** Art.51

## Legislations on M&A

**Company Law** Art.183
**Securities Law** Chap.4
**Rules on Merger and Acquisition of Domestic Enterprises by Foreign Investors**

## Prohibition on administrative monopoly

**Regional blockades**** & ****Sector/industry monopolies**
**Regulations on Development and Protection of Competition** (1980)
**Anti-Unfair Competition Law** Art.7
**Legislations of State Council in 2001**

## Comments on Current Anti-monopoly Legislation

- Lack of a unified and complete system of anti-monopoly law
- Contents are more of principles, while lack of practicability
- Current regulations are of low level, not authoritative enough
- Lack of legal liabilities and measures of punishment

## Drafting of Anti-monopoly Law

- Initiation in 1994
- MOFCOM submitted the draft to State Council in 2004
- State Council submitted the draft to the Standing Committee of NPC
- The amendment will be made in Anti-Unfair Law and Price Law according  to the legislation plan of NPC

## Relevant parties from U.S., such as DOJ, FTC, ABA, American Chamber Commerce-China, US-China Trade Council, expressed their concerns of the draft.

## Guidelines and Principles of Drafting Anti-monopoly Law

- Based on the domestic status of China; adapting to the level and stage of China’s economic development
- Reflecting the international rules of practice; absorbing and referring to the experience and best practice of other countries
- Reflecting the policy of opening-up; adjusting to the trends of entry to WTO and economic globalization
- Reflecting both fundamentality and flexibility

## The main provisions of the  AML Draft :
 prohibition on monopolistic agreement
 prohibition on abuse of dominance
 concentration control
 Prohibition on abuse of administrative power to eliminate or  restrict competition
 anti-monopoly agencies
 legal liability 

-  prohibition on monopolistic agreement
-  prohibition on abuse of dominance
-  concentration control
-  Prohibition on abuse of administrative power to eliminate or  restrict competition
-  anti-monopoly agencies
-  legal liability

## Anti-monopoly Enforcement by Ministry of Commerce

- The function of MOFCOM in anti-monopoly field
- MOFCOM has established an Anti-monopoly office in August, 2004.
- Works done by the anti-monopoly office of MOFCOM

## 
Q&A

- Q&A

## 
Thank you!

- Thank you!