On June 30, the Ministry of Industry and Information Technology
("MIIT") issued the Opinion on
Regulating Conducts of Basic Telecoms Enterprises on College
Campuses ("MIIT Opinion"). The MIIT
Opinion governs specified conduct by basic telecom
enterprises1 -in relation to unfair competition issues
within college or university campuses.
Specifically, the MIIT Opinion prohibits basic telecoms
entering into exclusive agreements (both oral and written) with
school authorities such that other competitors will not be able to
enter school campuses;
disparaging competitors or carrying on any promotion that
compares the networks or equipment of competitors;
including SIM or UIM cards in the enrolment notices mailed to
purchasing cell phones (or batteries), SIM or UIM cards from
clients of competitors;
mandating the use of designated service plans or equipment
(such as cell phones).
Basic telecoms enterprises are also required to respect the
users' right to know and the right of selection. They are not
allowed to restrict customers from choosing competitors'
Unfair competition conducts such as those listed above are
common in China's campus telecoms market. The MIIT Opinion can
be seen as an application of anti-unfair competition provisions in
the Regulation on Telecommunications (the
"Regulation") in the campus telecoms
market. For example, Article 41 of the Regulation prohibits
telecoms operators from harming customers' rights by limiting
customers to use designated services or buy designated equipment.
Article 42 of the Regulation prohibits unfair competition conducts
such as restricting customers from using competitors' services.
According to the Regulation, a violation of Article 41 may be
subject to a fine of RMB10,000 to 100,000; a violation of Article
42 may be subject to a fine of RMB100,000 to 1 million. The MIIT is
the competent authority in charge of the telecommunications
The State Administration for Industry and Commerce
("SAIC"), along with its local
counterparts, is the agency in charge of anti-unfair competition
issues in China. Yet, pursuant to Article 3 of the Anti-unfair
Competition Law ("AUCL"), agencies other
than the SAIC may also undertake a supervisory role when authorized
by law or administrative regulations. The Regulation on
Telecommunications (an administrative regulation) authorizes the
MIIT, as the industry supervisory authority, to regulate unfair
competition acts of telecoms enterprises. Therefore, MIIT is well
placed to regulate unfair competition issues within this
On the other hand, whether MIIT has the authority to enforce the
Anti-monopoly Law ("AML") remains
unclear and controversial. Earlier this year, MIIT issued the draft
Interim Rules for Supervision and Management of Internet
Information Service Market, which touches upon not only competition
issues but also antitrust issues in relation to the internet
information service industry (see our article entitled MIIT
Releases Draft Rules Which Govern Antitrust Issues
Doubts have arisen as to whether MIIT has the authority under the
AML to enforce antitrust issues and how MIIT is to work with the
other antitrust enforcement agencies, such as SAIC, to perform such
tasks. We note that this draft rule has not yet been enacted.
1. Basic telecoms operators in China include China
Telecommunications, China Mobile and China Unicom.
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.
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