China
Answer ... The principal statutes governing cartels in China are:
- the Anti-Monopoly Law, which was promulgated on 30 August 2007 and took effect on 1 August 2008; and
-
the Interim Provisions on Prohibition of Monopoly Agreements, which were promulgated on 26 June 2019 and took effect on 1 September 2019. They were issued by the State Administration for Market Regulation (SAMR), the newly established anti-monopoly enforcement agency, which integrates the anti-monopoly departments of the Ministry of Commerce, the National Development and Reform Commission (NDRC) and the State Administration for Industry and Commerce (SAIC) in a single body.
With respect to the substantive law on cartels, the interim provisions correspond to those of the Anti-monopoly Law on the classification of cartel behaviour. However, the interim provisions go further and provide greater detail, in particular on:
- the recognition of monopoly agreements;
- the suspension of investigations;
- exemptions; and
- the leniency programme.
This has significantly increased the clarity and the practicality of applying these provisions.
With regard to the procedural laws on cartels, the interim provisions cover major aspects of anti-monopoly investigations, such as:
- SAMR’s remit;
- authorisation;
- the complaint;
- the investigation procedure;
- sanctions; and
- publication of the decision.
In addition, detailed provisions on hearings and penalties are set out in the Interim Measures for Hearing the Administrative Penalty and the Interim Measures on the Procedures for Administrative Penalty, both of which were promulgated by SAMR on 21 December 2018 and took effect on 1 April 2019.
Prior to the promulgation of the Anti-monopoly Law, both the Price Law and the Bidding Law included similar, albeit more general provisions on the prohibition of collusive activities. The Anti-monopoly Law – which sets out more detailed and specific provisions, and provides for higher penalties – is commonly understood as the primary legal basis for cartel practice.
On 2 January 2020 SAMR published for consultation the draft amendment to the Anti-monopoly Law. Under the draft amendment, the types of monopoly agreement will be expanded to cover not only ‘hub-and-spoke’ schemes, but also schemes where a company facilitates the establishment of a monopoly agreement.
China
Answer ... The Anti-monopoly Law sets forth exemptions for alliances or other concerted conduct by agricultural producers and rural economic organisations in relation to activities such as the manufacture, processing, sale, transportation and storage of agricultural products.
China
Answer ... Before the institutional reform that established SAMR, the SAIC and NDRC were responsible for investigating monopoly agreements. On 10 April 2019 SAMR was formally established, which has consolidated the responsibilities of cartel enforcement of the SAIC and NDRC in a single integrated agency. Since then, SAMR has been responsible for enforcing the Chinese cartel regime.
In addition, SAMR may authorise its provincial branches to carry out anti-monopoly enforcement.
China
Answer ... Cartel enforcement increased steadily in 2019. Eight enforcement initiatives were conducted that year, all of which were aimed at industries that relate directly to people’s everyday lives, such as construction, catering and automobiles. The investigations are set out below.
|
Cases |
Date |
Agency |
Penalty |
1. |
A price-fixing case involving three Hubei local vehicle inspection firms |
14 March |
Hubei Administration for Market Regulation (AMR) |
RMB 225,095
($33,525) |
2. |
A price-fixing case involving eight Zhejiang local concrete firms |
8 May |
Zhejiang AMR |
RMB 7.7 million
($1.12 million) |
3. |
A price-fixing case involving four Inner Mongolia local catering entities and a trade association |
31 July |
Inner Mongolia AMR |
RMB 650,000
($92,083.6) |
4. |
A price-fixing case involving six Chongqing local baked brick firms |
9 August |
Chongqing AMR |
RMB 1.94 million
($274,511),
with RMB 900,000 ($130,900) as confiscation of illegal gains |
5. |
A price-fixing case involving 10 Shannxi local pre-mixed concrete firms |
9 August |
Shaanxi AMR |
RMB 4.9 million
($685,084) |
6. |
A price-fixing case involving five Shanxi pre-mixed concrete firms |
17 September |
Shanxi AMR |
RMB 250,000
($35,003) |
7. |
A price-fixing case involving a Shandong local automotive industry association |
8 October |
Shandong AMR |
RMB 300,000
($42,633) |
8. |
A price-fixing case involving seven Hunan bottled gas firms |
21 December |
Hunan AMR |
RMB 412,801
($58,659) |
Three decisions relating to the construction sector – Decisions 2, 5 and 6 in the table above – were key decisions issued in 2019. Before they were issued, in early April 2019, SAMR met with six major cement manufacturers to warn them against monopolistic practices. In addition to three national industry associations in the construction sector, 15 provincial building materials cement concrete industry associations, and representatives from 10 provincial anti-monopoly enforcement authorities attended the meeting with SAMR. Later in 2019, the three construction decisions were handed down.
All eight decisions illustrate SAMR’s commitment to rigorous anti-monopoly law enforcement in sectors that affect people’s livelihoods.