Competition Law at China
Competition Law in China
China has a comprehensive legal framework governing competition, primarily centered around the Anti-Monopoly Law (AML), which came into effect on August 1, 2008. It is the foundational statute regulating competition in China and is enforced by multiple authorities.
Key Features of Competition Law in China
1. Legal Framework
Anti-Monopoly Law (AML) 2008
Supplementary regulations, guidelines, and enforcement rules issued by regulatory authorities.
2. Enforcement Authorities
State Administration for Market Regulation (SAMR): Main enforcement agency.
Three divisions under SAMR handle:
Anti-monopoly enforcement on mergers
Anti-monopoly enforcement on abuse of dominance
Anti-monopoly enforcement on restrictive agreements
3. Prohibited Conducts
a. Anti-competitive agreements (Article 13)
Price-fixing, market division, bid-rigging, production/output restriction.
Applies to both horizontal (between competitors) and vertical agreements (between suppliers and distributors).
b. Abuse of Dominant Market Position (Articles 17-19)
Predatory pricing.
Refusal to deal.
Tying or exclusive dealing.
Discriminatory pricing or unfair trading terms.
c. Merger Control (Articles 20-30)
Pre-merger notification is mandatory if the parties meet specific thresholds related to turnover and market share.
SAMR reviews mergers and acquisitions to prevent substantial reduction of competition.
4. Investigation and Penalties
Authorities have broad powers to investigate, inspect business premises, and require documentation.
Penalties can include fines up to 10% of the offending company's turnover.
Illegal agreements may be declared void.
Criminal penalties may apply in severe cases.
5. Recent Trends and Enforcement
China has been increasingly active in enforcing AML, focusing on large tech companies and monopolistic practices.
New guidelines on platform economy, intellectual property, and abuse of dominance.
Greater transparency and procedural safeguards are being developed.
6. Exceptions and Exemptions
Certain agreements or practices can be exempted if they promote technology, economic efficiency, or public interest.
Summary Table:
| Aspect | Details |
|---|---|
| Key Legislation | Anti-Monopoly Law (2008) |
| Enforcement Authority | State Administration for Market Regulation (SAMR) |
| Prohibited Practices | Anti-competitive agreements, abuse of dominance, anti-competitive mergers |
| Merger Notification | Mandatory if thresholds met |
| Penalties | Fines up to 10% of turnover, void contracts, criminal sanctions possible |
| Recent Focus | Tech sector, platform economy, digital markets |
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