The Anti-monopoly Law's next stage of evolution

China's increasingly assertive antitrust regime has wide-ranging implications for companies doing business or engaging in transactions in China. Business leaders worldwide must now account for China's Anti-monopoly Law (AML) in their business decisions. While the competition laws and enforcement regimes in the United States and European Union are well-established, they have on occasion taken divergent approaches, as regulators on opposite sides of the Atlantic have disagreed on the appropriateness or application of certain theories of competitive harm. Now firms with major cross-border operations must also consider how the development of Chinese antitrust law will affect their activities. This task can be difficult because Chinese antitrust law is still emerging, and its practical application by Chinese regulators is in its infancy.

Recently, China's State Administration for Industry and Commerce (SAIC) proposed new regulations aimed at clarifying some of the prohibitions in the AML. These proposed regulations prohibit certain types of horizontal and vertical agreements, list prohibited abuses of dominant market position, clarify the AML's leniency provisions and even impose restrictions on actions of administrative authorities who exclude or restrain competition. These regulations offer some clarifications, especially with regard to leniency issues, but leave many questions, including what types of vertical arrangements are prohibited and the interplay between intellectual property and the AML. While the regulations are subject to comment and revision, they provide a window into the current thinking and goals of Chinese antitrust regulators.