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Anti-monopoly Law of the People's Republic of China
Anti-monopoly Law of the
People's Republic of China
Order of the President of the People's Republic of China
(No.68)
The Anti-monopoly Law of the People's Republic of China,
which was adopted at the 29th meeting of the Standing
Committee of the Tenth National People's Congress of the
People's Republic of China on August 30, 2007, is hereby
promulgated, and shall be effective as of August 1, 2008.
President of the People's Republic of China: Hu Jintao
August 30, 2007
Table of Contents
Chapter I - General Provisions
Chapter II - Monopoly Agreement
Chapter III - Abuse of Dominant Market Position
Chapter IV - Concentration of Business Operators
Chapter V - Abuse of Administrative Power to Eliminate or
Restrict Competition
Chapter VI - Investigation into Suspected Monopolistic
Conduct
Chapter VII - Legal Liabilities
Chapter VIII - Supplementary Provisions
Chapter I - General Provisions
Article 1 This Law is enacted for the purpose of guarding
against and curbing monopolistic conduct, protecting fair
market competition, enhancing economic efficiency,
maintaining consumer interests and public interests, and
promoting the sound development of the socialist market
economy.
Article 2 This Law is applicable to monopolistic conduct
in economic activities within the territory of the People's
Republic of China. This Law is applicable to monopolistic
conduct outside the territory of the People's Republic of
China that has the effect of eliminating or restricting
competition on the domestic market of China.
Article 3 The term "monopolistic conduct" as prescribed
in this Law includes:
1. Monopoly agreements reached between business
operators;
2. Abuse of dominant market position by business
operators; and
3. Concentration of business operators that may have the
effect of eliminating or restricting competition.
Article 4 The State shall formulate and implement
competition rules suitable for the socialist market economy,
perfect macro control, and improve on a united, open,
competitive and orderly market system.
Article 5 Business operators may, through fair
competition and voluntary association, concentrate
themselves according to law, expand the scale of business
operations and enhance market competitiveness.
Article 6 No business operator with dominant market
position may abuse that dominant status to eliminate or
restrict competition.
Article 7 With respect to sectors controlled by the
State-owned economy and which have a bearing on the lifeline
of the national economy and national security or the sectors
conducting exclusive operation and sales according to law,
the State shall protect the lawful business operations
conducted by the business operators therein, and shall
supervise and control the business operations of and the
prices of commodities and services provided by these
business operators, so as to protect consumer interests and
facilitate technological progress.
The business operators referred to in the previous
paragraph shall operate according to law, be honest,
faithful and strictly self-disciplined, and accept public
supervision, and shall not harm consumer interests by taking
advantage of their controlling or exclusive dealing
position.
Article 8 No administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs may abuse its administrative
powers to eliminate or restrict competition.
Article 9 The State Council shall establish an
Anti-monopoly Committee, which is responsible for organising,
coordinating and guiding the anti-monopoly work and performs
the following functions:
1. Studying and drafting relevant competition policies;
2. Organising the investigation and assessment of overall
competition situations, and releasing assessment reports;
3. Formulating and releasing anti-monopoly guidelines;
4. Coordinating anti-monopoly administrative law
enforcement; and
5. Other functions assigned by the State Council.
The composition and working rules of the Anti-monopoly
Committee shall be prescribed by the State Council.
Article 10 The anti-monopoly law enforcement agency
designated by the State Council (hereinafter referred to as
the "Anti-monopoly Law Enforcement Agency under the State
Council") shall be responsible for the anti-monopoly law
enforcement work.
The Anti-monopoly Law Enforcement Agency under the State
Council may, as required by the work, empower corresponding
agencies in the people's governments of the provinces,
autonomous regions and municipalities directly under the
Central Government to be responsible for the anti-monopoly
law enforcement work in accordance with this Law.
Article 11 A trade association shall strengthen
self-discipline within the trade, lead the business
operators in the trade towards lawful competition, and
maintain the market competition order.
Article 12 The term "business operator" as stated in this
Law refers to a natural person, legal person, or any other
organisation that engages in the production or business of
commodities or provides services.
The term "relevant market" as mentioned in this Law
refers to the commodity scope or territorial scope within
which the business operators compete against each other over
a certain period of time for specific commodities or
services (hereinafter referred to as "commodities").
Chapter II - Monopoly Agreement
Article 13 Competing business operators are prohibited
from reaching any of the following monopoly agreements with
each other or among themselves:
1. Fixing or changing the price of commodities;
2. Restricting the production quantity or sales volume of
commodities;
3. Dividing the sales market or the raw material
procurement market;
4. Restricting the purchase of new technology or new
facilities or the development of new technology or new
products;
5. Conducting boycott transactions; or
6. Other monopoly agreements as determined by the
Anti-monopoly Law Enforcement Agency under the State
Council.
The term "monopoly agreements" as stated in this Law
refers to agreements, decisions or other concerted behaviour
that eliminates or restricts competition.
Article 14 Business operators are prohibited from
reaching any of the following monopoly agreements with their
trading parties:
1. Fixing the price of commodities for resale to a third
party;
2. Restricting the minimum price of commodities for
resale to a third party; or
3. Other monopoly agreements as determined by the
Anti-monopoly Law Enforcement Agency under the State
Council.
Article 15 Where the business operators can prove that a
monopoly agreement reached by them falls under any of the
following circumstances, the monopoly agreement shall be
exempt from Articles 13 and 14 of this Law:
1. For the purpose of improving technologies, researching
and developing new products;
2. For the purpose of upgrading product quality, reducing
costs, improving efficiency, unifying product specifications
or standards, or carrying out professional labour division;
3. For the purpose of enhancing operational efficiency
and reinforcing the competitiveness of small and
medium-sized business operators;
4. For the purpose of realizing public interests such as
conserving energy, protecting the environment and providing
disaster relief;
5. For the purpose of mitigating the severe decrease of
sales volume or obviously excessive production during
economic recessions;
6. For the purpose of protecting the justifiable
interests in foreign trade or foreign economic cooperation;
or
7. Other circumstances prescribed by the law or the State
Council.
Where a monopoly agreement falls under any of the
circumstances prescribed in Items 1-5 and is exempt from
Articles 13 and 14 of this Law, the business operators shall
also prove that the agreement reached shall not
substantially restrict competition in the relevant market
and can enable the consumers to share the benefits from the
agreement.
Article 16 No trade association may organise the business
operators in its own trade to implement the monopolistic
conduct as prohibited by this Chapter.
Chapter III - Abuse of Dominant Market Position
Article 17 Business operators with a dominant market
position are prohibited from committing any of the following
acts of abusing such dominant market position:
1. Selling products at unfairly high prices or buying
products at unfairly low prices;
2. Selling products at prices below cost without any
justifiable cause;
3. Refusing to trade with a trading party without any
justifiable cause;
4. Restricting their trading party so that it may conduct
deals exclusively with themselves or with the designated
business operators without any justifiable cause;
5. Implementing tying in sales or imposing other
unreasonable trading conditions at the time of trading
without any justifiable cause;
6. Applying discriminatory treatments on trading prices
or other trading conditions to their trading parties with
equal standing without any justifiable cause; or
7. Other forms of abusing the dominant market position as
determined by the Anti-monopoly Law Enforcement Agency under
the State Council.
The term "dominant market position" as mentioned in this
Law refers to a market position held by business operators
that can control the price or quantity of commodities or
other trading conditions in the relevant market or can block
or affect the entry of other business operators into the
relevant market.
Article 18 The dominant market position shall be
determined according to the following factors:
1. The market share of a business operator and its
competitive situation in the relevant market;
2. The ability of the business operator to control the
sales market or the raw material procurement market;
3. The financial and technical conditions of the business
operator;
4. The extent of reliance on the business operator by
other business operators in the transactions;
5. The degree of difficulty for other business operators
to enter the relevant market; and
6. Other factors relevant to the determination of the
dominant market position of the said business operator.
Article 19 Under any of the following circumstances, a
business operator may be presumed to have a dominant market
position:
1. The market share of one business operator accounts for
1/2 or more in the relevant market;
2. The joint market share of two business operators
accounts for 2/3 or more in the relevant market; or
3. The joint market share of three business operators
accounts for 3/4 or more in the relevant market.
Under the circumstance prescribed in Item 2 or 3 of the
previous paragraph, if any of the business operators has a
market share of less than 1/10, that business operator shall
not be considered to have a dominant market position.
A business operator that has been presumed to have a
dominant market position shall not be determined as having a
dominant market position, provided that there is counter
evidence.
Chapter IV - Concentration of Business Operators
Article 20 The "concentration of business operators"
refers to any of the following circumstances:
1. Merger of business operators;
2. A business operator acquires control over other
business operators by acquiring their equities or assets; or
3. A business operator acquires control over other
business operators or is able to exert a decisive influence
on other business operators by contract or any other means.
Article 21 Business operators shall declare in advance
the concentration reaching the threshold of declaration
prescribed by the State Council to the Anti-monopoly Law
Enforcement Agency, and otherwise, they shall not implement
the concentration.
Article 22 Under any of the following circumstances,
business operators may not file a concentration declaration
to the Anti-monopoly Law Enforcement Agency under the State
Council:
1. Among all business operators involved in the
concentration, one business operator possesses 50% or more
of the voting shares or assets of every other business
operator; or
2. A business operator not involved in the concentration
possesses 50% or more of the voting shares or assets of
every business operator that is involved in the
concentration.
Article 23 To make a concentration declaration to the
Anti-monopoly Law Enforcement Agency under the State
Council, business operators shall submit the following
documents and materials:
1. A declaration paper;
2. Explanations on the effects of the concentration on
the relevant market competition situation;
3. The concentration agreement;
4. The financial and accounting statements for the
previous fiscal year of the business operators involved in
the concentration, as audited by an accounting firm; and
5. Other documents and materials as required by the
Anti-monopoly Law Enforcement Agency under the State
Council.
The declaration paper shall contain the names of the
business operators involved in the concentration, their
domiciles, business scopes, the date on which the
concentration is to be implemented, and other matters
prescribed by the Anti-monopoly Law Enforcement Agency under
the State Council.
Article 24 Where the documents or materials submitted by
the business operators are not complete, the business
operators concerned shall supplement the relevant documents
or materials within the time limit prescribed by the
Anti-monopoly Law Enforcement Agency under the State
Council. Otherwise, the declaration shall be deemed as not
filed.
Article 25 The Anti-monopoly Law Enforcement Agency under
the State Council shall, within 30 days upon receipt of the
documents and materials submitted by the business operators
pursuant to Article 23 of this Law, conduct a preliminary
examination of the declared concentration of business
operators, make a decision on whether to conduct further
examination or not, and notify the business operators of
that decision in written form. The business operators shall
not implement the concentration until the Anti-monopoly Law
Enforcement Agency under the State Council makes such a
decision.
Where the Anti-monopoly Law Enforcement Agency under the
State Council makes a decision that no further examination
shall be conducted or where the Anti-monopoly Law
Enforcement Agency fails to make a decision within the time
limit, the business operators may implement the
concentration.
Article 26 Where the Anti-monopoly Law Enforcement Agency
under the State Council decides to conduct further
examination, it shall, within 90 days from the date of
decision, complete the examination, make a decision on
whether to prohibit the concentration, and notify the
business operators concerned of the decision in written
form. If the Anti-monopoly Law Enforcement Agency under the
State Council decides to prohibit the concentration, it
shall explain the reasons. The business operators shall
refrain from implementing the concentration within the
period of examination.
Under any of the following circumstances, the
Anti-monopoly Law Enforcement Agency under the State Council
may, after notifying the business operators concerned in
written form, extend the time limit of examination as
prescribed in the preceding paragraph, with the extension
being no more than 60 days:
1. The business operators agree to extend the time limit
of examination;
2. The documents or materials submitted by the business
operators are inaccurate and need further verification; or
3. The relevant circumstances have significantly changed
after the declaration by the business operators.
Where the Anti-monopoly Law Enforcement Agency under the
State Council fails to make a decision within the time
limit, business operators may implement the concentration.
Article 27 The following factors shall be taken into
account in the examination of the concentration of business
operators:
1. The involved business operators' market share in the
relevant market and their controlling power over that
market;
2. The degree of market concentration in the relevant
market;
3. The impact of the concentration of business operators
on market access and technological progress;
4. The impact of the concentration of business operators
on consumers and other business operators;
5. The impact of the concentration of business operators
on the national economic development; and
6. Other factors that may affect the market competition
and shall be considered as deemed by the Anti-monopoly Law
Enforcement Agency under the State Council.
Article 28 Where the concentration of business operators
will or may eliminate or restrict competition, the
Anti-monopoly Law Enforcement Agency under the State Council
shall make a decision to prohibit the concentration.
However, if the business operators concerned can prove
either that the favourable impact of the concentration on
competition obviously exceeds the adverse impact, or that
the concentration is in harmony with the public interests,
the Anti-monopoly Law Enforcement Agency under the State
Council may decide not to prohibit the concentration.
Article 29 Where the concentration of business operators
is not prohibited, the Anti-monopoly Law Enforcement Agency
under the State Council may decide to attach restrictive
conditions for reducing the adverse impact of such
concentration on competition.
Article 30 The Anti-monopoly Law Enforcement Agency under
the State Council shall timely publicise a decision on
prohibiting the concentration of business operators or a
decision on attaching restrictive conditions to the
concentration of business operators.
Article 31 Where a foreign investor participates in the
concentration of business operators by merging or acquiring
a domestic enterprise or by any other means, and national
security is involved, besides the examination on the
concentration of business operators in accordance with this
Law, the examination on national security shall also be
conducted according to the relevant provisions of the State.
Chapter V - Abuse of Administrative Power to
Eliminate or Restrict Competition
Article 32 No administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs may abuse its administrative power
to limit, or limit in a disguised form, entities or
individuals to the business operation, purchase or use of
commodities provided by business operators designated by it.
Article 33 No administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs may abuse its administrative power
to block the free circulation of commodities among different
regions by:
1. Setting discriminatory charges, implementing
discriminatory charge rates, or fixing discriminatory prices
for non-local commodities;
2. Imposing technical requirements or inspection
standards on non-local commodities that are different from
those on their local counterpart, or taking discriminatory
technical measures, such as repeated inspections or repeated
certifications on non-local commodities, so as to restrict
the entry of non-local commodities into the local market;
3. Adopting administrative licensing regimes aimed at
non-local commodities, so as to restrict the entry of
non-local commodities into the local market;
4. Setting up barriers or adopting any other means to
block either the entry of non-local commodities or the exit
of local commodities; or
5. Other acts that hamper the free circulation of
commodities among different regions.
Article 34 No administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs may abuse its administrative power
to reject or restrict the participation of non-local
business operators in local tendering and bidding activities
by imposing discriminatory qualification requirements or
assessment standards or by failing to publicise information
according to law.
Article 35 No administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs may abuse its administrative power
to reject or restrict either investment in its jurisdiction
or the establishment of local branches by non-local business
operators by imposing unequal treatments on them that are
different from those on the local business operators.
Article 36 No administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs may abuse its administrative power
to compel business operators to engage in monopolistic
activities that are prohibited by this Law.
Article 37 No administrative organ may abuse its
administrative power to formulate provisions on eliminating
or restricting competition.
Chapter VI - Investigation into Suspected
Monopolistic Conduct
Article 38 The Anti-monopoly Law Enforcement Agency shall
investigate any suspected monopolistic conduct according to
law.
An entity or individual shall be entitled to report any
suspected monopolistic conduct to the Anti-monopoly Law
Enforcement Agency. The Anti-monopoly Law Enforcement Agency
shall keep the informer confidential.
The Anti-monopoly Law Enforcement Agency shall conduct
necessary investigations, where the tip-off is made in
written form and supported by relevant facts and evidence.
Article 39 When investigating a suspected monopolistic
conduct, the Anti-monopoly Law Enforcement Agency may take
the following measures:
1. Conducting the inspection by entering into the
business premises of business operators under investigation
or by entering into any other relevant place;
2. Inquiring of the business operators under
investigation, interested parties, or other relevant
entities or individuals, and requiring them to explain the
relevant conditions;
3. Consulting and duplicating the relevant documents,
agreements, account books, business correspondences and
electronic data, etc. of the business operators under
investigation, interested parties and other relevant
entities or individuals;
4. Seizing and detaining relevant evidence; and
5. Inquiring about the bank accounts of business
operators under investigation.
Before any of the measures prescribed in the previous
paragraph is adopted, a written report shall be submitted to
the principal of the Anti-monopoly Law Enforcement Agency
for approval.
Article 40 When investigating a suspected monopolistic
conduct, there shall be at least two law enforcers, and they
shall present their law enforcement credentials.
The law enforcers shall make notes on the inquiry and
investigation, which shall bear the signatures of the
persons under inquiry or investigation.
Article 41 The Anti-monopoly Law Enforcement Agency and
its functionaries shall keep confidential the business
secrets they have access to during the process of law
enforcement.
Article 42 The business operators, interested parties and
other relevant entities or individuals under investigation
shall assist the Anti-monopoly Law Enforcement Agency in
performing its functions; and shall not refuse or obstruct
the investigation conducted by the Anti-monopoly Law
Enforcement Agency.
Article 43 The business operators and interested parties
under investigation shall be entitled to make statements.
The Anti-monopoly Law Enforcement Agency shall verify the
facts, reasons and evidence presented by the business
operators and interested parties under investigation.
Article 44 Where the Anti-monopoly Law Enforcement Agency
deems that monopolistic conduct is constituted after
investigating and verifying the suspected monopolistic
conduct, it shall make a decision on how to deal with such
monopolistic conduct, and may publicize its decision.
Article 45 As for the suspected monopolistic conduct that
the Anti-monopoly Law Enforcement Agency is investigating,
if the business operators under investigation promise to
eliminate the effects of the conduct through the use of
concrete measures within the time limit prescribed by the
Anti-monopoly Law Enforcement Agency, the Anti-monopoly Law
Enforcement Agency may decide to suspend the investigation.
The decision on suspending the investigation shall state the
concrete measures as promised by the business operators
under investigation.
Where the Anti-monopoly Law Enforcement Agency decides to
suspend the investigation, it shall supervise the
implementation of the pledges made by the relevant business
operators. If the business operators are found to have
honoured their commitments, the Anti-monopoly Law
Enforcement Agency may decide to terminate the
investigation.
However, under any of the following circumstances, the
Anti-monopoly Law Enforcement Agency shall resume the
investigation:
1. The business operators fail to honour their pledges;
2. Significant changes have taken place to the facts, on
the basis of which the decision on suspending the
investigation was made; or
3. The decision on suspending the investigation was made
on the basis of incomplete or inaccurate information
submitted by the business operators.
Chapter VII - Legal Liabilities
Article 46 Where the business operators reach and fulfill
a monopoly agreement in violation of this Law, the
Anti-monopoly Law Enforcement Agency shall order them to
stop the violations, confiscate the illegal gains and impose
a fine of 1% up to 10% of the sales revenue in the previous
year. Where the monopoly agreement reached has not been
fulfilled, a fine of less than RMB500,000 may be imposed.
Where the business operators concerned voluntarily report
the conditions on reaching the monopoly agreement and
provide important evidence to the Anti-monopoly Law
Enforcement Agency, they may be given a mitigated punishment
or be exempt from punishment at the discretion of the
Anti-monopoly Law Enforcement Agency.
Where a trade association organises the business
operators in its own industry to reach a monopoly agreement
in violation of this Law, the Anti-monopoly Law Enforcement
Agency may impose a fine of less than RMB500,000; where the
circumstances are serious, the social group registration
authority may deregister the trade association.
Article 47 Where the business operators abuse their
dominant market position in violation of this Law, the
Anti-monopoly Law Enforcement Agency shall order them to
stop such violations, confiscate their illegal gains, and
impose a fine of 1% up to 10% of the total sales in the
previous year on them.
Article 48 Where the business operators implement the
concentration in violation of this Law, the Anti-monopoly
Law Enforcement Agency under the State Council shall order
them to stop the concentration, to dispose of shares or
assets, transfer the business or adopt other necessary
measures to restore the market situation before the
concentration within a time limit, and may impose a fine of
less than RMB500,000.
Article 49 To determine the specific amount of fines
prescribed in Articles 46-48, the Anti-monopoly Law
Enforcement Agency shall consider such factors as the
nature, extent and duration of the violations.
Article 50 The business operators that commit the
monopolistic conduct and cause damages to others shall bear
the civil liability according to law.
Article 51 Where an administrative organ or organisation
empowered by a law or administrative regulation to
administer public affairs abuses its administrative power to
eliminate or restrict competition, the superior authority
thereof shall order it to make correction and impose
punishments on the directly responsible persons in charge
and other directly liable persons. The Anti-monopoly Law
Enforcement Agency may offer suggestions to the relevant
superior authority on the handling according to law.
Where a law or administrative regulation provides
otherwise for the handling of an administrative organ or
organisation empowered by a law or administrative regulation
to administer public affairs that abuses its administrative
power to eliminate or restrict competition, such provisions
shall prevail.
Article 52 As for the examination and investigation
implemented by the Anti-monopoly Law Enforcement Agency, if
business operators refuse to submit related materials and
information, submit fraudulent materials or information,
conceal, destroy or remove evidence, or refuse or obstruct
investigation in other ways, the Anti-monopoly Law
Enforcement Agency shall order them to make rectification,
impose a fine of less than RBM20,000 on individuals, and a
fine of less than RMB200,000 on entities; and where the
circumstances are serious, the Anti-monopoly Law Enforcement
Agency may impose a fine of RMB20,000 up to RMB100,000 on
individuals, and a fine of RMB200,000 up to RMB1 million on
entities; where a crime is constituted, the relevant
business operators shall be subject to criminal liabilities.
Article 53 Where any party concerned is dissatisfied with
the decision made by the Anti-monopoly Law Enforcement
Agency pursuant to Articles 28 and 29 of this Law, it may
first apply for an administrative reconsideration; if it is
dissatisfied with the reconsideration decision, it may lodge
an administrative lawsuit according to law.
Where any party concerned is dissatisfied with any
decision made by the Anti-monopoly Law Enforcement Agency
other than the decisions prescribed in the previous
paragraph, it may apply for an administrative
reconsideration or lodge an administrative lawsuit according
to law.
Article 54 Where any functionary in the Anti-monopoly Law
Enforcement Agency abuses his authority, neglects his duty,
makes falsehood for personal gains, or discloses trade
secrets known in the process of law enforcement, and a crime
is constituted, he or she shall be subject to criminal
liabilities; and if no crime is constituted, he or she shall
face disciplinary sanction according to law.
Chapter VIII - Supplementary Provisions
Article 55 This law shall not apply to the conduct of
business operators to exercise their intellectual property
rights in accordance with the laws and relevant
administrative regulations on intellectual property rights;
however, this Law shall apply to the conduct of business
operators to eliminate or restrict market competition by
abusing their intellectual property rights.
Article 56 This law shall not apply to the alliance or
concerted actions of agricultural producers and rural
economic organisations in the economic activities such as
production, processing, sales, transportation and storage of
agricultural products.
Article 57 This law shall come into effect as of August
1, 2008.
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