Provisions for the Suppression by Administrations for Industry and Commerce of Acts of Abuse of Administrative Authority to Eliminate or Restrict Competitive Acts

Article 3: An administrative authority or an organisation authorised by laws or regulations with the function of administrating public affairs may not abuse its administrative authority to engage in the following acts:

(1) restricting or restricting in a disguised fashion entities or individuals from dealing in, buying or using the goods of a business operator designated by it or restricting the normal business activities of a third party by expressly demanding or implicitly indicating the same or refusing or delaying an administrative permission, or repeated inspections, etc.

(2) imposing technical requirements or inspection standards on goods from outside the region that differ from those for the same types of goods from its region, or taking discriminatory technical measures against goods from outside the region, such as repeated inspections, repeated certification, etc. so as to obstruct or restrict their entry into the local market;

(3) adopting administrative permissions directed exclusively at goods from outside the region or, when imposing administrative permissions on goods from outside the region, subjecting them to different permit conditions, procedures, deadlines, etc. so as to obstruct or restrict their entry into the local market;

(4) setting up checkpoints or taking other measures to obstruct or restrict entry into the local market of goods from outside the region or the shipment of local goods to markets outside the region;

(5) precluding or restricting business operators from outside the region from participating in bid invitations and submission activities in its region through means such as setting discriminatory qualification requirements or assessment standards or failing to publish information in accordance with the law, etc.;

(6) adopting unequal treatment or other such means to preclude or restrict business operators from outside the region from investing or establishing branches in its region, or to interfere with the normal business activities in its region of business operators from outside the region; or

(7) compelling business operators to reach and implement monopolistic agreements that eliminate or restrict competition, or compelling business operators with a dominant market position to engage in acts of abuse of their dominant market position.

Article 4: An administrative authority may not abuse its administrative authority to formulate and issue, in the form of decisions, announcements, notices, circulars, opinions, meeting minutes, etc., provisions with contents that eliminate or restrict competition.

The preceding paragraph applies to organisations authorised by laws or regulations with the function of administrating public affairs.

Article 5: Business operators may not:

(1) reach and implement monopolistic agreements or abuse their dominant market position on the grounds of an administrative restriction by an administrative authority or an organisation authorised by laws or regulations with the function of administrating public affairs;

(2) reach and implement monopolistic agreements or abuse their dominant market position on the grounds of administrative authorisation by an administrative authority or an organisation authorised by laws or regulations with the function of administrating public affairs; or

(3) reach and implement monopolistic agreements or abuse their dominant market position on the grounds that the same was based on administrative regulations formulated and issued by an administrative authority or an organisation authorised by laws or regulations with the function of administrating public affairs.

Article 6: If an administrative authority or an organisation authorised by laws or regulations with the function of administrating public affairs violates Article 3 or 4 hereof, the State Administration for Industry and Commerce and the administration for industry and commerce of the province, autonomous region or municipality directly under the central government may, in accordance with Article 51 of the Anti-monopoly Law, in respect of the manner and consequences of the abuse of its administrative authority to eliminate or restrict competition, recommend to the relevant authority at the next higher level that the matter be handled in accordance with the law.

Article 7: If a business operator violates Article 5 hereof by engaging in monopolistic acts, the matter shall be handled in accordance with the Provisions for the Prohibition by Administrations for Industry and Commerce of Acts of Monopolistic Agreements or the Provisions for the Prohibition by Administrations for Industry and Commerce of Acts of Abuse of Dominant Market Position.

Article 8: If business operators reach and implement a monopolistic agreement, the administration for industry and commerce shall order them to cease the illegal act, confiscate the illegal income and impose a fine of not less than 1% and not more than 10% of the previous year's sales turnover; if the monopolistic agreement has yet to be implemented, a fine of up to Rmb500,000 may be imposed. If a business operator abuses its dominant market position, the administration for industry and commerce shall order it to cease the illegal act, confiscate the illegal income and impose a fine of not less than 1% and not more than 10% of the previous year's sales turnover.

Article 9: If a law or administrative regulations provide otherwise in respect of the handling of acts of abuse of administrative authority by administrative authorities and organisations authorised by laws or regulations with the function of administrating public affairs to eliminate or restrict competition, such provisions shall apply.

Article 10: Anti-monopoly law enforcement personnel of an administration for industry and commerce shall, in accordance with the Provisions on Procedures for Investigation and Handling of Cases of Monopolistic Agreements and Cases of Abuse of Dominant Market Position by Administrations for Industry and Commerce, handle cases in strict accordance with the law.

If a member of the anti-monopoly law enforcement personnel of an administration for industry and commerce abuses his/her authority, is derelict in his/her duties, practises favouritism by committing fraud or discloses trade secrets learnt in the course of his/her law enforcement work, he/she shall be dealt with in accordance with relevant provisions.

Article 11: For the purposes of these Provisions, the term “goods” includes services.

Article 12: The State Administration for Industry and Commerce is in charge of interpreting these Provisions.

Article 13: These Provisions shall be effective as of February 1 2011.