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.

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”

Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.