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
