Competition enforcement under old laws is declining
June 06, 2009 | BY
clpstaff &clp articles &The State Administration for Industry and Commerce (SAIC) has released its enforcement statistics for the first quarter of 2009. The figures include details…
The State Administration for Industry and Commerce (SAIC) has released its enforcement statistics for the first quarter of 2009. The figures include details of competition law-related cases, and seem to show that the agency is shifting its focus away from pre-2008 laws.
All the cases described on the SAIC's website were dealt with according to provisions which were in force before the enactment of the PRC Anti-monopoly Law (AML) in 2008, including the PRC Anti-unfair Competition Law. The figures show the SAIC dealt with only 76 cases relating to restrictions on competition in the last quarter – a year-on-year decrease of 25.49% compared with the same period last year – indicating a move away from the old laws (although the exact reason for the decrease is not clear).
“Does this indicate a general winding down of enforcement under the Anti-unfair Competition Law in advance of the introduction of the AML? Or is this a result of the diversion of SAIC resources to AML enforcement, resulting in fewer resources available to deal with Anti-unfair Competition Law cases?” asked Kirstie Nicholson, of counsel with Lovells in Shanghai.
The SAIC is one of the agencies responsible for enforcing China's anti-monopoly legislation. The latest figures seem to verify that the SAIC, along with the National Development and Reform Commission (another AML enforcement agency), has not been actively dealing with the enforcement of AML-related cases while it is has been working on its new implementing regulations. This lack of active enforcement has already led to several private cases being brought directly to court.
Practitioners hope that two sets of draft rules – the Draft Rules on Prohibition of Abuse of Dominant Market Position and Draft Rules on Prohibition of Monopoly Agreements – will clarify the situation after they are finalised.
According to Nicholson, the latest SAIC figures also provide clues as to why the SAIC has specifically included bid-rigging as an activity prohibited by the AML (under both the prohibition on monopolistic agreements and the abuse of a dominant position) in recently published draft guidelines on non-price-related cases under the AML.
The SAIC says that “among the [76 cases relating to restrictions on competition], 32 cases are bid- or tender-rigging cases”. PT
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now