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This article was written by Nathalie Boué, lawyer and professor at Temple University Beasley School of Law (Tokyo, Japan campus) and Sorbonne-Assas International Law School (Singapore campus).
ABSTRACT (in english):
The liberalization of the Chinese economy started in 1978 with the “Open Door Policy” initiated by Deng Xiaoping and lately accelerated with the adoption of the first Anti-Monopoly Law (“AML”). The law was adopted in August 2007 and came into effect on August 1, 2008. The AML is the first comprehensive law entirely relating to competition issues and providing a specific regulatory framework for Mainland China’s antitrust law regime.
In this regard, the AML can be seen as a strategic element in the process of transformation of China’s legal landscape with the conscious goal of the Chinese authorities to set up in the country a — relatively — free and fair competitive environment among the operators doing business in China or contemplating doing it. The purpose of the law is to protect a healthy market competition mechanism from any distortion but it is noteworthy mentioning that the aim of the law is also to “promote the healthy development of socialist market economy” (Article 1). China definitely remains a socialist market economy with its own characteristics.
The AML assigns three institutions with the task of monitoring competition and market order in China: the Ministry of Commerce (“MOFCOM”) is responsible for reviewing merger control cases and business concentrations, the National Development and Reform Commission (“NDRC”) is responsible for price-related conducts (agreements and abuses of market dominance) and the State Administration for Industry and Commerce (“SAIC”) is responsible for non-price related conducts. In addition with these government agencies, the intermediate courts can also examine the private civil liability of any business operator engaged into a monopolistic behavior infringing the AML.
This article examines the significant developments for the Chinese antitrust law regime that took place in 2014 and explores the perspectives for 2015.
Despite the fact that the implementation of the AML is still in its infancy, the decisions released in 2014 by the three antitrust enforcement agencies together with the China’s Supreme People Court raise fears that the AML might be used as a tool of industrial policy in order to protect domestic companies or force foreign operators to lower their prices or royalties with their Chinese licensees.
In addition, the foreign business community and practitioners have expressed their growing concerns regarding the lack of fairness of the investigating methods and the aggressive raids reportedly targeting the foreign subsidiaries in China over the last months.
The latest decisions and the on-going investigations carried out by the enforcement agencies should convince the foreign operators to follow thoroughly the antitrust law developments and the necessity for them to comply with this new legal environment in China. Given this context, it is clear today that almost seven years after the AML came into effect, China has become a major antimonopoly jurisdiction with its antitrust agencies gaining more experience and improving their ability to handle complex and high profile cases. The foreign business operators cannot ignore this anymore.
ABSTRACT (in french):
La libéralisation de l’économie chinoise a débuté en 1978 avec la reforme dite de « la Porte Ouverte » initiée par Deng Xiaoping et a récemment connu un tournant avec l’adoption de la première loi anti-monopole (« AML »). Cette loi, adoptée en Août 2007, est entrée en vigueur le 1er Août 2008. Première loi entièrement dédiée aux questions de concurrence, l’AML définit un cadre réglementaire spécifique pour les comportements anti-concurrentiels en Chine Continentale.
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