China: Three rules which shed light on non-price violations of the Anti Monopoly Law

Last Updated: 1 April 2011
Article by Susan Ning and Angie Ng

Contributions also by Shan Lining and Liu Jia

On 7 January 2011, the State Administration of Industry and Commerce (SAIC) published the following 3 rules which accompany the Anti-Monopoly Law (AML):

  1. Rules in relation to Conduct amounting to Monopoly Agreements (Monopoly Agreement Rules);
  2. Rules in relation to Conduct amounting to Abuse of Dominance (Abuse of Dominance Rules); and
  3. Rules in relation to Conduct amounting to Abuse of Administrative Powers (Abuse of Administrative Powers Rules).

The SAIC governs non-price breaches in respect of the AML; hence the rules above are only applicable to non-price breaches of the AML.

Aside from these 3 rules, the National Development and Reform Commission (NDRC) has published another 2 rules dealing with price monopolies and procedural rules in relation to price breaches of the AML – see our articles entitled " Rules on Anti-Price Monopoly – effective 1 February 2011"and " Procedural Rules re Administrative Enforcement of Anti-Price Monopoly – effective 1 February 2011" .  Together, this suite of 5 rules provide much awaited guidance in relation to how both price and non price prohibitions pursuant to the AML will be interpreted and enforced.

This article outlines the content of the three SAIC rules.

Monopoly Agreement Rules

Article 13 of the AML prohibits anticompetitive agreements or "monopoly agreements" between competitors in the form of agreements, decisions or concerted practices.  Article 13 also lists specified categories of monopoly agreements which are likely to fall foul of this prohibition (e.g. agreements to restrict output, divide markets and jointly boycott competitors).

The Monopoly Agreement Rules provide guidance in relation to non-price breaches of Article 13 of the AML.  The following are some of the salient provisions to note in respect of these rules:

  • the rules provide that conduct may amount to a "concerted practice" even if there were no expressly concluded written or oral agreements;
  • the rules provide certain factors that the SAIC will consider to decide if conduct amounts to a "concerted practice"
  • the rules articulate, in some detail, the types of conduct which may fall into the four major categories of non-price violations (in respect of Article 13 of the AML).  These are: restricting output and sales; dividing markets; restricting innovation and joint boycotts;
  • the rules set out a leniency regime (in respect of Article 13 of the AML).  Broadly, business operators who come forward with evidence of breaches of Article 13 may be granted full immunity or a reduced penalty;
  • in relation to penalties, the rules distinguish between a situation where a monopoly agreement is currently being implemented; as opposed to a situation where a monopoly agreement has been reached but not yet been implemented.  The rules suggest that the former situation may incur greater penalties than the latter situation; and
  • the rules also state that where a business operator ceases to implement a monopoly agreement in its own initiative – the SAIC will possess the discretion to exempt that business operator from pecuniary penalties.

Abuse of Dominance Rules

Article 17 of the AML prohibits dominant business operators from abusing their dominance.  Article 17 also lists specified categories of conduct which are likely to fall foul of this prohibition (e.g. refusal to deal without a valid reason; placing restrictions on trading counterparts to only transact with the dominant business operator without a valid reason; and bundling the sale of commodities without a valid reason).

The Abuse of Dominance Rules provide guidance in relation to non-price breaches of Article 17 of the AML.  The following are some of the salient provisions to note in respect of these rules:

  • the rules provide guidance on what conduct would constitute a refusal to deal; restrict transactions; tying and bundling and discriminatory treatment;
  • the rules provide guidance as to the factors that the SAIC might consider when determining if conduct amounts to a "valid reason".  Factors include: whether actions are undertaken by the dominant business operator on its "normal operating activities"; and whether the impact of the dominant business operator has an impact on economic efficiency, public benefits and economic development;
  • the rules introduce a regime similar to what is known in Europe as the "essential facilities doctrine".  This is where dominant business operators are being placed under greater scrutiny in respect of their conduct where they provide goods or services which are considered as essential facilities; and
  • the rules provide that if a business operator ceases to abuse its dominance on its own initiative – then the SAIC possesses the discretion to immunize the business operator from any penalties or to order a reduced penalty.

Abuse of Administrative Powers Rules

Chapter 5 of the AML deals with administrative authorities in China abusing their powers – resulting in the elimination or restriction of competition.

The Abuse of Administrative Powers Rules provide guidance on how Chapter 5 will be enforced.  Broadly, the rules list examples of how administrative authorities may abuse their powers, resulting in the elimination or restriction of competition.  For instance, by withholding administrative approvals; by restricting entry in relation to non-local products into a local industry by applying different approval conditions; or by excluding non-local business operators from participating in local bids and tenders.

In addition, the rules also state that business operators are prohibited from entering into monopoly agreements and/or an abuse of dominance on the pretext of adhering to administrative restrictions, authorizations or rules articulated by administrative authorities. [Note:  Business operators should be aware of this provision and in doubt seek legal advice as to whether your conduct could potentially flout the AML.]


The 3 rules as set out above (along with the 2 rules on price monopoly, published by the NDRC a little earlier on) shed some light as to how the prohibitions within the AML will be enforced.  Already, we are seeing public enforcement actions against business operators and business associations for price and non-price violations of the AML.  Going forward, we can expect to see even more public enforcement actions.  Now that these rules have been published, it is also somewhat clearer how business operators may go about defending their conduct, if being investigated by the antitrust authorities (such as the NDRC and the SAIC).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
King & Wood Mallesons
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
King & Wood Mallesons
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions