Why it is time for a unified anti-monopoly agency

What are the biggest challenges during anti-monopoly reviews?

Detailed rules of the AML are mostly administrative. Their effect is minimal in the legislation hierarchy. Take MOFCOM as an example; in complex cases it could not clearly define some basic concepts like right of control, efficiency, equity joint-venture and time limit. Also, MOFCOM's review of a business operator concentration requires administrative permission and has to comply with the administrative procedure. A time limit for review of 180 days cannot ensure cases are evaluated sufficiently, because reviews often involve professional and complex knowledge. The serious lack of professional staff and the frequent mobility of personnel have also restricted the efficiency, quality and professionalism of anti-monopoly reviews.

The draft of the regulation on simplified procedures recently published for comments by MOFCOM has been formulated after summarising plenty of cases and taking foreign experience as a reference with a view to meeting market demand. It deserves praise for this move. Simplified procedures are helpful to reduce the burden of plenty of reviews borne by the limited administrative resource and to increase the efficiency of administrative review.

What do you make of the high-profile anti-monopoly actions?

This year, the NDRC imposed fines on six international LCD manufacturers including Samsung and LG, for anti-competitive agreements. The Commission has also issued fines on Maotai and Wuliangye for vertical resale price maintenance (RPM) and on several milk powder enterprises like Nestle, Wyeth and Dumex for vertical resale price fixing. MOFCOM has received more than 800 filings for concentrations, with 700 cases accepted for investigation. The SAIC has opened a platform for publishing anti-monopoly cases and published detailed information on 12 cases where investigations have been completed out of 23 cases in total.

The courts have accepted more than 200 cases involving anti-monopoly agreements and abuse of dominant market position, with 100 cases accepted in 2012. This year, courts in Guangdong Province and in Shanghai tried some major cases, like Huawei against InterDigital, Qihoo 360 against Tencent for abuse of market dominant position and Rainbow against Johnson & Johnson for RPM. The Supreme People's Court opened a court session to hear the appeal of Qihoo 360 against Tencent in the second instance.

My advice to domestic enterprises is they need to understand and study the AML hard. For foreign enterprises, they need to understand the Chinese AML. Of course both domestic and foreign enterprises need to be compliant and strengthen communication with AML enforcement agencies. The government needs to further improve transparency in implementing the law and accept supervision from the public as well as endeavour to realise the unification of three AML enforcement agencies.

What do you see in the future for China's anti-monopoly regime?

Separation has been formed between the AML enforcement agencies. The three agencies simply act as operational bureaus under the three ministries with different duties. The AML is the most important law in the market economy. Based on international experience and actual domestic demand, the effective implementation of the AML will assure the stable running of the market economy. The anti-monopoly law implementing agencies should be consolidated into a unified, relatively independent and professional competent body with a higher administrative level. With respect to law implementation, the administrative agencies should be more open and transparent, perform administrative duties according to law and conduct model guidance.