Antitrust Flashcards
Anti-monopoly Law
From August 2008
prohibits monopolistic agreements that restrict or limit competition
later supplemented by other rules and guidelines
3 set of rules of the AML
- prohibition of abuse of a dominant market position
- concentrations of undertakings
- prohibition of monopolistic agreements
Abuse of dominant market position
It enables one or more undertakings to:
- control price volume or trading terms in the market
(others factors that can have a material impact on market purchases)
- block or affect the ability of entering the market
Dominance in the market depends on (5)
- market shares
- competitiveness of the market
- ease of entry
- ability to control sales and input
- financial strength
What rises a presumption of dominance?
1 und. - half of the shares
2 und. - 2/3 of shares
3 und. 3/4 of shares
AML: It doesn’t prohibit dominance but just abuse of dominance
Abuse of dominance: How? (7)
- restrictions that impair consumer interest
- selling lower than cost
- selling at unfair prices
- differential treatments
- Requiring counter-parties to accept unrelated additional conditions
- Restrictions on freedom to purchase products from other sources without good reasons
- Discriminatory pricing without good reasons
Abuse of dominance: related to IP
> Licensing at unfair high prices
Tie-in sales involving IP
imposing unreasonable trade conditions
Economic concentration
they are merges of undertakings (one take control over another)
control concept
- sole control
- joint control
Merging process
> merger notification is compulsory and before execution of transaction
if not noticed = FAILURE TO FILE sanctions under AML
fine of up to 500,000 RMB
Horizontal agreements (5)
Cartel agreements between competing undertaking are ILLEGAL:
1- price fixing
2- restricting production volume or sales volume
3- dividing sales markets or procurement markets
4- restricting procurement of new technologies and products and investment in R&D
5- joint boycott (refuse to supply or sell to a specific undertaking)
Exceptions on horizontal agreements
- joint research and product development
- lowering cost
- improving operation efficiency
- realize public interest
- protect legitimate interest
- other
Vertical agreements
- taken very seriously
- article 14 of AML prohibited Retail Price Maintenance
- authorities can impose a FINE from 1% to 10% of the sales revenue
SMAR
State Administration for Market Regulation
Types of vertical agreements (5)
- purchase and sales agreement
- tripartite agreement (secondary distributors)
- strategic service agreement
- price adjustment letters or notices
- oral notification
Other vertical restraints:
- passive sales
- exclusive dealing (only if dominant)
- loyalty discounts (only if dominant)
Passive sales
Distributors do not actively market the goods or services to consumers but deliver the goods or services upon their request.
exclusive dealing
Exclusive dealing is a target of vertical agreement investigations just if the undertaking holds a dominant market position in the relevant market.
Investigation
> can enter the business premises to INSPECTION
conduct INTERROGATIONS retiring individuals to disclose informations
DUPLICATE documents anf data
DETAIN evidence
CHECK bank accounts
If obstructing an investigation
- individuals: up to RMB 100,000
- companies: RMB 1 million
