China: First Public Enforcement Decision by the Jiangsu SAIC against concrete manufacturers

Last Updated: 28 February 2011
Article by Susan Ning

Recently, the Jiangsu Administration for Industry & Commerce ("Jiangsu AIC") issued sanctions against the Concrete Committee of the Construction Materials and Construction Machinery Industry Association of Lianyungang City ("Association") and 16 concrete manufacturers for breach of the Anti-Monopoly Law, by way of having entered into a monopoly agreement.

This is the first publicly released enforcement decision by the SAIC (which delegated power onto the AIC) in respect of the Anti-Monopoly Law (AML), since the enactment of the AML in August 2008.

This is the first publicly released enforcement decision by the SAIC (which delegated power onto the AIC) in respect of the AML, since the enactment of the AML in August 20081.

The State Administration for Industry & Commerce ("SAIC") possesses the jurisdiction to govern and enforce non-price prohibitions in respect of the AML. And, according to the Article 10 of the AML and the Article 2 of the Procedural Rules by Administration of Industry and Commerce regarding Investigation and Handling of Cases relating to Monopoly Agreement and Abuse of Dominant Market Position, where necessary, SAIC may delegate to relevant AIC of a province, an autonomous region, or a municipality ("Provincial AIC") the authority of anti-monopoly law enforcement with regard to monopoly agreement and abuse of dominant market position.


The salient facts of this case are as follows:

On 3 March 2009, the Association facilitated the coordination of 16 members (who were manufacturers of premixed concrete) to enter into what they called a "Self-disciplinary Agreement" and the "Supervision and Punishment Rules". The following agreement was reached:

  • Allocating market shares to each of the 16 members according to their capacities;
  • dividing the market in Lianyungang City;
  • requiring the manufacturers to file their concrete sales agreements to the Association for record (any failure in doing so would incur some sort of sanction or "punishment" by the Association);
  • manufacturers who do not cooperate with the Association will be fined by the Association.

According to the SAIC press release, the "Self-disciplinary Agreement" and "Supervision and Punishment Rules" were put into effect by the Association and the members. On 17 March 2009, the Association required the manufacturers to report their daily project volumes with the Association. On 21 March 2009, the Association required the manufacturers to file their sales agreements with the Association.  The Association governed and enforced the Self-disciplinary Agreement.  The Association also organized inspections to the sites of the members and also punished manufacturers for allegedly violating the "Self-disciplinary Agreement".

Jiangsu AIC's Investigation

  • In June 2009, a construction enterprise filed a complaint to the Lianyungang Bureau of Industry and Commerce (Lianyungang AIC) against the Association, alleging that several construction projects had to be suspended because there wasn't sufficient supply of premixed concrete.  The construction enterprise alleged that the Association prohibited its members from entering into sales agreements with downstream entities, without first seeking the Association's approval.
  • The Lianyungang AIC immediately reported this case to the Jiangsu AIC as it considered this case involved a violation of the AML.
  • After undertaking a preliminary investigation, the Jiangsu AIC submitted a written report to SAIC seeking instructions.
  • The Antimonopoly and Anti-Unfair Competition Enforcement Bureau of SAIC identified this case as possibly having the effect of restricting competition (by wat of a monopoly agreement) and therein authorized the Jiangsu AIC to initiate a formal investigation.
  • The Jiangsu AIC formed a special investigation team comprising 10 officers ("the Special Investigation Team") in order to undertake investigating this case. The Special Investigation Team interviewed employees working at the Association and employees of some 18 concrete manufacturers.  The Special Investigation Team also conducted on-site inspections of more than 20 construction projects, and collected  approximately150 "pieces" of evidence including the Self-disciplinary Agreement, meeting minutes, evidence which displayed the effects of the conduct of the Association and its members on the pricing of concrete, etc. The investigation lasted for more than 200 days.

Final Decision by the Jiangsu AIC

  • Jiangsu AIC found that the Association violated the AML by organizing for competing concrete manufacturers to enter into the Self-disciplinary Agreement.  This conduct was found to have restricted competition in the premixed concrete industry in Lianyungang City, in breach of Article 16 of the AML (prohibition against industry associations who "organize" business operators to engage in monopoly conduct) Taking into consideration that Association actively cooperated with the investigation, the Jiangsu AIC ordered an injunction against the Association to cease the illegal conduct; as well as a fine of RMB 200,000.
  • Jiangsu AIC also found that the 16 manufacturers entered into the monopoly agreement to divide sales regions, in breach of Article 13 (3) of the AML. In light that the 16 manufacturers cooperated with the investigation and stopped the illegal conduct timely, pursuant to Article 46 of the AML, Jiangsu AIC ordered the 16 manufacturers to stop the illegal conduct and imposed fines to 5 of them.  The SAIC press release did not stipulate the amounts in relation to these fines.


From a procedural point of view, it appears that the investigation procedure of the case is fully in compliance with the Procedural Rules by Administration for Industry and Commerce regarding Investigation and Handling of Cases relating to Monopoly Agreement and Abuse of Dominant Market Position issued by SAIC which became effective on 1 July 2009.

(a)   The Jiangsu AIC imposed sanctions on both the Association as well as its members.  This is distinct from the first public enforcement decision by the National Development Reform Commission (NDRC, the authority in charge of price-related prohibitions of the AML) against the Zhejiang Fuyang Paper Making Industry Association,  where only the association, rather than its members, was found to have breached the AML (see article entitled " First price enforcement action by the NDRC in 2011 - against paper association" for more on the Zhejiang Fuyang Paper case).  It is clear that both "facilitators" and "implementers" of monopoly acts will be punished pursuant to the AML.

We note that amongst the 16 business operators that were being investigated in this case, only 5 members were being fined.  There are two possible explanations: either the rest of the members were "let off" pursuant to the leniency regime; or there wasn't sufficient evidence to establish a breach in relation to the other members (with the exception of 5 members).  We note also that there was some recognition in the SAIC press release that cooperation during investigation was a mitigating factor in relation to the determination of remedies.

Pursuant to the SAIC press release, we note that Mr. Ning Wanglu (SAIC Director General of the Antimonopoly and Anti-unfair Competition Enforcement Bureau) was quoted as saying that this case sets a good example for AIC to get involved in the enforcement of the AML.  We can expect that more AICs will be active in the governing and enforcing the AML in the near future.

1 Please see SAIC's press release at

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.