Anti-Monopoly%20Law%202007-08-30[1]

Anti-Monopoly Law of the People's Republic of China(Adopted by the Twenty Ninth Session of the Standing Committee of the Tenth NationalPeople's Congress On August 30, 2007)Chapter I - General ProvisionsArticle 1.This Law is enacted for the purposes of preventing and prohibiting monopolistic conduct, protecting market competition, promoting efficiency of economic operation, safeguarding the legitimate rights and interests of consumers and public interests, and ensuring the healthy 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 conducts outside the territory of the People's Republic of China that have eliminative, restrictive effects on competition in the domestic market of the People's Republic of China.Article 3.Monopolistic conduct defined in this Law includes the following:(i)Concluding monopoly agreements by operators;(ii)Abusing of dominant market positions by operators;(iii)Concentration of operators that have or may have the effects of eliminating, restricting competition.Article 4.The state shall enact and implement competition rules appropriate for the socialist market economy, improve macroeconomic measures, and build a united, open, competitive, andwell-ordered market system.Article 5.Operators may implement the concentration pursuant to the laws, enlarge business scales, and improve market competitiveness trough fair competition and voluntary union.Operators with dominant market positions shall not abuse the dominant market positions, eliminate, restrict competitions.Article 7.The state protects legitimate business activities of operators subject to sectors wherestate-owned economy is in a dominant position and that are vital to the national economy or related to national security, or sectors with monopoly operation and sale that implement pursuant to the laws, monitors and controls business activities of operators and prices of commodities and service pursuant to the laws, safeguards the interests of consumers, and promotes scientific and technological progress.The operators subject to sectors mentioned in the preceding paragraph shall operate pursuant to the laws, be honesty, be in strict self-discipline, and accept supervision of government and public communities; they shall not impair consumers’ interests through their dominant positions or monopoly operation and sale status.Article 8.Administrative organs and the public organizations with administrative function of public affairs authorized by laws and regulations shall not abuse their administrative powers to exclude, restrict competition.Article 9.The State Council shall set up the Anti-Monopoly Commission, being responsible to organize, lead, and coordinate the anti-monopoly activities and implementing the following functions:(i)studying and making competition policies;(ii)organizing the investigation, assessing the overall market competition status, and publishing an assessment reports;(iii)enacting and promulgating anti-monopoly guidelines;(iv)coordinating the anti-monopoly law enforcement activities;(v)other functions assigned by the State Council.The composition and rules of the Anti-Monopoly Commission under the State Council shall be developed by the State Council.The Anti-monopoly Enforcement Authority designated by the State Council (hereinafter "the Anti-Monopoly Law Enforcement Authority") is responsible for anti-monopoly enforcement activities in accordance with this Law.The Anti-monopoly Enforcement Authority under the State Council, if appropriate, may empower corresponding government agencies at the provincial, autonomous region, and municipal level to be responsible for anti-monopoly enforcement activities in accordance with this Law.Article 11.The industry associations shall strengthen the industry self-discipline, guide operators in the industry to compete pursuant to the laws, and maintain market competition order.Article 12.An operator in this Law refers to a natural person, legal person, other organization that engages in commodity production, operation or providing services.A relevant market in this Law refers to the commodity scope or geographic area within which the operators compete against each other during a certain period of time for specific commodities or services (hereinafter "commodities ").Chapter II Monopoly AgreementsArticle 13.The following Monopoly Agreements among competing operators shall be prohibited:(i)fix or change prices of commodities;(ii)limit the outputs or sales volume of commodities;(iii)segment the sales markets or the raw material purchasing markets;(iv)limit the purchase of new technology, new facilities or limit the development of new products, new technology;(v)jointly boycott transactions;(vi)other monopoly agreements determined by the Anti-Monopoly Law enforcement Authority.Monopoly agreements in this Law refer to agreements, decisions or other concerted practices that eliminate, restrict competition.Article 14.The following monopoly agreements between operators and trading partners shall be prohibited:(i) fixing the resale prices of commodities to third persons;(ii) restricting the minimum resale prices of commodities to third persons;(iii) other monopoly agreements determined by the Anti-monopoly Law Enforcement Authority under the State Council.Article 15.If the operators can prove that the concluded agreements fulfill any of the following circumstances, shall be exempt from the application of Articles 13 and 14:(i)to improve technology, research and develop new product;(ii)to upgrade the product quality, reduce cost, enhance efficiency, unify the specifications, standards of product, or implement specialization division;(iii)to improve operational efficiency and enhance competition capacity of small and medium-sized operators;(iv)to realize the social public interests such as to save energy, protect environment, and relieve disaster;(v)during the period of economic depression, to moderate serious decreases in sales volumes or distinct production surpluses;(vi)to ensure the legitimate interests in foreign trade and economic cooperation;(vii)other circumstances stipulated by law and the State Council.In situations stipulated in the preceding condition (i) to (v), where Article 13 and Article 14 shall not apply, operators shall also prove that the concluded monopoly agreements will not substantially restrict competition in the relevant market, and can enable consumers to share the interests derived from it.Article 16.The industry associations shall not organize the operators in the industry to conduct monopolistic activities prohibited by this Chapter of this Law.Chapter III Abuse of Dominant Market PositionArticle 17.Operators with dominant market positions shall be prohibited from following activities that abuse the dominant market positions:(i)selling commodities at unfair high or buying commodities at unfair low prices;(ii)without valid reasons, selling commodities at prices below cost;(iii)without valid reasons, refusing to trade with trading partners;(iv)without valid reasons, restricting trading partners to only trade with the operator or the operators designated by the operator;(v)without valid reasons, tying commodities or imposing other unreasonable trading conditions during the deals;(vi)without valid reasons, applying differentiated treatment in regards to transaction conditions such as trading prices to equivalent trading partners;(vii)other activities that abuse the dominant market position determined by the Anti-Monopoly Law Enforcement Authority under the State Council.Dominant Market Position in this Law refers to the operator which is capable of controlling the price or quantity of commodities or other trading conditions in the relevant market or restricting or affecting other operators in entering into the relevant market.Article 18.The dominant market position of an operator shall be determined based on the following factors:(i)market share of the operator and the competition situation in the relevant market;(ii)ability of the operator to control the sales market or the purchase market of the raw materials;(iii)financial and technical conditions of the operator;(iv)the dependent relationship on the operator of other operators and the extent of it;(v)the difficulty of entering the relevant market by other operators;(vi)other factors relating to the dominant market position of the operator.Article 19.Operators that have any of the following conditions can be assumed to hold a dominant market position:(i)the market share of one operator in relevant market accounts for more than 1/2;(ii)the joint market share of two operators as a whole in relevant market accounts for more than 2/3;(iii)the joint market share of three operators as a whole in relevant market accounts for more than 3/4.In situations stipulated in the preceding condition (ii) or (iii), and if any operator has market share less than 1/10, it shall not be assumed to hold a dominant market position.Chapter IV Concentrations of OperatorsArticle 20.A concentration of operators refers to the following situations:(i) a merger of operators;(ii)an acquisition of control of other operators by acquisition of shares or assets with voting right of other operators to an adequate extent;(iii)an acquisition of control of other operators or the capability of imposing determinative effects on other operators by contract or other means.Article 21.Where the concentration of operators reach the standard for notification stipulated by the State Council, the operators shall notify the Anti-Monopoly Law Enforcement Authority under the State Council in advance. The concentration shall not be implemented without notification.Article 22.If a concentration of operators fulfills any of the following circumstances, the operators need not file the notification with the Anti-monopoly Law Enforcement Authority under the State Council:(i)One operator involved in the concentration owns more than 50% of the shares or theassets with voting rights of each and every other operator;(ii)More than 50% of the shares or the assets with voting rights of every operator involved in the concentration are owned by the same operator which is not involved in the concentration.Article 23.Operators that make notification of a concentration shall submit the following documents, materials to the Anti-Monopoly Law Enforcement Authority under the State Council:(i) anotification;(ii)explanations regarding the influence on the competition in the relevant market by the concentration;(iii)the agreement of the concentration;(iv)the financial accounting reports of the operators involved in the concentration in the preceding accounting year, which are audited by a certified public accountant;(v)other documents, materials required by the Anti-monopoly Law Enforcement Authority under the State Council.The notification shall indicate clearly the name, address, business scope of the operators involved in the concentration, the proposed execution date of the concentration, and other matters stipulated by the Anti-monopoly Law Enforcement Authority under the State Council.Article 24.In case the documents, materials submitted by the operators are not complete, the operators shall supplement the documents and information within the time limit stipulated by theAnti-Monopoly Law Enforcement Authority under the State Council. Notification shall be deemed as failed to notify if the documents, materials fails to be supplemented within the set period by the operators.Article 25.The Anti-Monopoly Law Enforcement Authority under the State Council shall conduct preliminary review of the filed concentration, make a decision on whether to initiate further review within 30 days from the date of receipt of the documents, materials submitted in compliance with Article 23 by the operators, and shall inform the operators of the decision in writing. Before the decision is made by the Anti-Monopoly Law Enforcement Authority under the State Council, the operators shall refrain from implementing the concentration.Where the Anti-monopoly Law Enforcement Authority under the State Council makes the decision of not to initiate the further review or no decision of further review at the expiry of the period of time, the operators may implement the concentration.Article 26.If the Anti-monopoly Law Enforcement Authority under the State Council makes a decision to further review, it shall complete the review within ninety days from the date of its decision, decide whether to prohibit the concentration of the operators and notify the operators in writing. It shall indicate the reasons in the decision to prohibit the concentration. The operators shall not implement the concentration during the period of review.Under any of the following circumstances, the Anti-monopoly Law Enforcement Authority under the State Council may extend the time limit stipulated in the preceding paragraph by written notice to the operators, provided that the extension does not exceed sixty days at the maximum:(i)the operators agree to extend the time limit for the review;(ii)the documents submitted by the operators are inaccurate and need further verification;(iii)the relevant circumstances have significantly changed after notification by the operators.If the Anti-monopoly Law Enforcement Authority under the State Council fails to make decision at the expiry of the period of time, operators may implement concentration.Article 27.The following factors shall be considered in the examination of the concentration:(i)the market shares of the operators participating in the concentration on the relevantmarket and their ability to control the market;(ii)the extent of concentration in the relevant market;(iii)the effect of the proposed concentration on market access and technological progress;(iv)the effect of the proposed concentration on consumers and other related operators;(v)the effect of the proposed concentration on the development of the national economy;(vi)other elements affecting market competition, determined by the Anti-Monopoly Law Enforcement Authority under the State Council.Article 28.The Anti-Monopoly Law Enforcement Authority under the State Council shall make a decision to prohibit a concentration if the concentration has or may have the effect of excluding or restricting competition. However, the Anti-Monopoly Law Enforcement Authority under the State Council may make a decision not to prohibit a concentration where the operators can prove that the positive elements of the concentration obviously overweight the negative elements, or the concentration is in accordance with public interest.Article 29.For the concentration decided not be prohibited, the Anti-Monopoly Law Enforcement Authority under the State Council may decide to attach restrictive conditions reducing the negative effects of concentration on competition.Article 30.The Anti-monopoly Law Enforcement Authority under the State Council shall promptly publish the decision prohibiting the concentration or the decision attaching restrictive conditions to the concentration to the public.Article 31.Merger and acquisition of domestic enterprises by foreign investors or participation through other means in a concentration of operators, which affects national security, shall be reviewed on concentration in accordance with this Law, and shall also be reviewed on national security according to the relevant regulations of the State.Chapter V Abuse of Administrative Powers to Exclude, Restrict CompetitionArticle 32.Administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations shall not abuse their administrative powers to requireorganizations or individuals to deal in, purchase or use the commodities supplied by any operators designated by them.Article 33.Administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations shall not abuse their administrative powers to take the following measures hindering the free circulation of the commodities among the regions:(i)to set discriminatory charging items, implement discriminatory standards for chargingfees, or fix discriminatory prices on the commodities originated from other regions;(ii)to impose technical requirements or inspection standards, or take discriminatory technical measures such as repeated inspection, certification on commoditiesoriginated from other regions, which are different from those on local like commodities, so as to restrict entry of commodities originated from other regions into the localmarkets;(iii)to conduct administrative licensing targeting commodities originated from other regions, so as to restrict entry of commodities originated from other regions into thelocal markets;(iv)to set up checkpoints or other means to block the entry of commodities originated from other regions or exit of their own local commodities;(v)other activities hindering the free circulation of the commodities among the regions.Article 34.Administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations shall not abuse their administrative powers to restrict or reject the participation of operators from other regions in local bidding activities by measures such as prescribing discriminatory qualification requirements or assessment standards, or by not publishing information according to law.Article 35.Administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations shall not abuse their administrative powers to restrict or reject investment or establishment of branches from operators in other regions, by resorting to such manners as according treatment unequal to that on their local operators.Article 36.Administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations shall not abuse their administrative powers to compel operators to pursue monopolistic conducts which are prohibited under this Law.Article 37.Administrative organs shall not abuse their administrative powers to set rules with contents which eliminate, restrict competition.Chapter VI Investigation of the Suspicious Monopolistic ConductsArticle 38.The Anti-Monopoly Law Enforcement Authority investigates the suspect monopolistic conducts pursuant to the laws.Any organizations or individuals may report to the Anti-Monopoly Law Enforcement Authority the suspect monopolistic conducts prohibited by this Law. The Anti-monopoly Authority shall keep the confidentiality for the reporting party.If the report is in writing, and including related facts and evidences, the Anti-Monopoly Law Enforcement Authority shall carry out necessary investigation.Article 39.To investigate the suspicious monopolistic conducts, the Anti-Monopoly Authority may take the following measures:(i)to exam by entering into the business locations or other relevant places of theoperators;(ii)to make inquiries of the operators, interested parties or other relevant entities or individuals under the investigation, requiring them to provide relevant information;(iii)to inquire about, duplicate documents and materials of related documents, agreements, accounting books, correspondence, electronic data etc. of operators,interested parties and other relevant entities or individuals subject to the investigation;(iv)to seal or retain relevant evidence;(v)to inquire the bank account of the operators;To implement above regulated measures, written report shall be submitted to the person in charge of the Anti-Monopoly Enforcement Authority, and approval shall be obtained.Article 40.There shall be at least two investigating officers from the Anti-monopoly Law Enforcement Authority during the investigation of suspicious monopolistic conducts, and examination credentials shall be issued.When officers make inquiries and investigations, written record shall be made and signed by the persons under inquiry or investigation.Article 41.The Anti-monopoly Law Enforcement Authority and its staffs shall keep the confidentiality of the commercial secrets obtained during the course of enforcement pursuant to the laws.Article 42.The operators, interested parties or other relevant entities or individuals subject to the investigation shall cooperate with the Anti-monopoly Law Enforcement Authority to perform the function pursuant to the Law, and shall not refuse, hinder the investigation by theAnti-monopoly Law Enforcement Authority.Article 43.The operators and interested parties subject to investigation are entitled to submit statements. The Anti-monopoly Law Enforcement Authority shall verify the alleged facts, justifications and evidences raised by the operators and interested parties subject to investigation.Article 44.Where the Anti-monopoly Law Enforcement Authority after investigation and verification determines the suspicious monopolistic conducts constitute monopolistic conducts, it shall make a decision in accordance with the Law, and may publish the decision to the public.Article 45.For the suspicious monopolistic conducts being invested by the Anti-Monopoly Law Enforcement Authority, if the operators subject to the investigation undertake to take specific measures within certain time limit accepted by the Anti-Monopoly Law Enforcement Authority to eliminate the effect of the monopolistic conducts, the Anti-Monopoly Law Enforcement Authority may decide to stay the investigation. The decision of the stay of the investigation shall state the detailed content committed by the operators.Where the Anti-Monopoly Law Enforcement Authority decides to stay the investigation, it shall supervise the implementation of the commitment by the operators. Where the operatorsperform the commitments, the Anti-Monopoly Law Enforcement Authority may decide to terminate the investigation.The Anti-Monopoly Law Enforcement Authority shall resume the investigation, where one of the following circumstances occurs:(i)the operator fails to perform the commitments;(ii)substantial changes occurred to the facts based on which the decision to stay the investigation was made;(iii)the decision to stay the investigation was made based on incomplete or untrue information provided by the operator.Chapter VII Legal LiabilityArticle 46.In case the operators violate the relevant provisions of this Law, concluding and implementing Monopoly Agreements, the Anti-Monopoly Law Enforcement Authority shall order the operators to cease such act, impose fines more than 1% but less than 10% of the total turnover in the preceding year and confiscate the illegal gains; where the Monopoly Agreement is not implemented, a fine less than RMB 500,000 can be imposed.If the operators involved in Monopoly Agreement on its own initiative report information concerning the conclusion of Monopoly Agreements and provide important evidences to the Anti-Monopoly Law Enforcement Authority, they may be given a mitigated punishment or be exempted from punishment in accordance with the circumstances.Where the industrial associations violate this Law, organizing the operators in the industry to conclude Monopoly Agreements, the Anti-Monopoly Law Enforcement Authority may impose a fine less than RMB 500,000; in serious circumstances, the agency of social organization administration and registration may cancel its registration.Article 47.In case the operators violate the relevant provisions of this Law, abuse of dominant market position, the Anti-Monopoly Law Enforcement Authority shall order the operators to cease such act, confiscate the illegal gains and impose fines more than 1% but less than 10% of the total turnover in the preceding year.Article 48.In case the operators implemented the concentration in violation of the relevant provisions of this Law, the Anti-Monopoly Law Enforcement Authority under the State Council shall order the operators to stop implementing the concentration, to dispose the stock or assets, to transfer its business or to take other necessary measures to revert to the condition of the operators before the concentration, and may impose fines less than RMB 500,000.Article 49.As for the imposition of the fines stipulated by the Article 46, 47 and 48 of this Law, theAnti-Monopoly Law Enforcement Authority shall take elements such as the nature, extent and time it lasts of the illegal act into consideration in determining the specific amount of the fines.Article 50.Where the operators implement monopolistic conducts and cause loss to others, the operators shall be responsible for the civil liabilities in accordance with the laws.Article 51.Where administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations abuse administrative powers, performing activities which exclude, restrict competition, the superior entity shall order it to correct; impose administrative penalty on the chief officer and other staffs directly responsible pursuant to the laws. The Anti-Monopoly Law Enforcement Authority may give recommendations on disposal of activities to the relevant superior entity.Where there are other stipulations in laws and administrative regulations concerning the disposal of activities excluding, restricting competition by administrative organs and public organizations with administrative function of public affairs authorized by laws and regulations' abusing administrative powers, the other stipulations shall apply.Article 52.In case of refusing to submit relevant materials, information or submitting fraudulent materials, information, or concealing, destroying or removing the evidence, or having other conducts hindering or refusing to be investigated during the course of examination and investigation by the Anti-Monopoly Law Enforcement Authority pursuant to the laws, the Anti-Monopoly Law Enforcement Authority shall order it to correct and may impose the fine below RMB 20,000 on the individuals, and below RMB 200,000 on entities; in serious circumstances, it shall impose fines above RMB 20,000 and below RMB 100,000 on the individuals, above RMB 200,000 and below RMB 1,000,000 on entities; if constitutes crimes, criminal liabilities shall be imposed.Article 53.If the party refuses to accept the decision made by the Anti-Monopoly Law Enforcement Authority under Article 28, Article 29 of this Law, it may apply the administrative review pursuant to the laws; if the party refuses to accept the decision of the administrative review, it may bring an administrative law suit.Where the party refuses to accept the decision made by the Anti-Monopoly Law Enforcement Authority under provisions other than Articles mentioned in the preceding paragraph, it may apply the administrative review or bring an administrative law suit pursuant to the laws.Article 54.Where the staffs of the Anti-Monopoly Law Enforcement Authority abuse the powers, fail to fulfill the duties, practice favoritism, or disclose business secrete of the operators obtained in the course of the enforcement of the Law, if it constitutes crime, criminal liabilities shall be imposed; if it does not constitute crime, the relevant staff shall be given administrative sanctions pursuant to the laws.Chapter VIII Supplementary ProvisionsArticle 55.Where the operators utilize the intellectual property rights pursuant to the stipulations in laws and administrative regulations relating to intellectual property, this Law is not applicable. However, this Law is applicable to the conducts by the operators eliminating, restricting competition by the abuse of the intellectual property rights.Article 56.This Law is not applicable to the association or concerted conducts by agricultural producers and the rural economic organizations during the course of the production, processing, sale, transportation, storage and other operating activities of the agricultural products.Article 57This Law is effective as of August 1, 2008.。