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After 14 years, China ushered in the newly revised antitrust law . The Anti-Monopoly Law is known as the "Economic Constitution". In the context of "strengthening anti-monopoly and preventing the disorderly expansion of capital", it is said to solve the problems that arise in practice such as relatively principled regulations, insufficient penalties for some monopolistic behaviors, and in response to the digital economy. and other issues, the Anti-Monopoly Law has been revised for the first time.
What are the highlights of this antitrust law revision? How to strengthen platform economy antitrust rules? What new requirements does the new law impose on corporate compliance? Nandu reporters interviewed many core experts who have long been concerned about the antitrust field and participated in the revision of the law, and took stock of them one by one.
Practice
Responding to the digital economy is key
The revision of the Anti-Monopoly Law has been brewing for a long time. Looking at the timeline of official news, in September 2018, the Standing Committee of the 13th National People's Congress announced a legislative plan, including the revision of the Anti-Monopoly Law as a second-category legislative project. In 2019, the State Administration for Market Regulation, which is responsible for unifying antitrust law enforcement, began the revision work and published a revised draft for review in January 2020 to solicit opinions from the public. On October 19, 2021, the draft amendment to the Anti-Monopoly Law was submitted to the 31st meeting of the Standing Committee of the 13th National People's Congress for review. From June 21 to 24, 2022, the draft amendment to the Anti-Monopoly Law will undergo its second review.
Several antitrust experts told Nandu reporters that discussions on amending the law began as early as 2018, before the three antitrust law enforcement agencies were integrated. The Ministry of Commerce, the National Development and Reform Commission, and the former State Administration for Industry and Commerce had separately or jointly conducted research on the commissioned topic of amending the law, and had many back-and-forth discussions.
Wang Xiaoye told Nandu reporters that since its implementation in 2008, China’s Anti-Monopoly Law has gone through more than ten years. After such a long period of law enforcement practice, we will naturally realize the problems in the law. Currently, the world is setting off an antitrust trend in the field of digital economy. Affected by this, the revision of China's Antitrust Law also needs to consider how to respond to the challenges of the digital economy and clarify and adjust relevant antitrust rules.
The revision of the Anti-Monopoly Law may be inevitable, but the passage of the draft in the second reading made many experts bluntly say that they "didn't expect it." According to the provisions of the Legislation Law, legal bills included on the agenda of the Standing Committee meetings should generally be reviewed by the Standing Committee three times before being submitted for voting. However, if the opinions of all parties are relatively consistent, it can be submitted to a vote after two deliberations; if the adjustment items are relatively single or partial amendments, if the opinions of all parties are relatively consistent, it can also be passed after one review.
Judging from public information, the draft amendment to the Anti-Monopoly Law passed the second review three days ago. On the afternoon of June 21, the 35th session of the Standing Committee of the 13th National People's Congress held its first plenary session. At the meeting, the Constitution and Law Committee believed that the draft amendment to the Anti-Monopoly Law was relatively mature and recommended that it be submitted to this Standing Committee meeting for review and approval.
html On the morning of June 24, the 13th National People’s Congress Standing Committee voted to adopt a decision to amend the Anti-Monopoly Law, which will come into effect on August 1, 2022. At this point, the draft amendment to the Anti-Monopoly Law has been finalized.Highlights
Exploring the regulation of "algorithmic collusion"
During the more than ten years since China's Anti-Monopoly Law was implemented, the Internet industry has developed vigorously, new business forms and new models have emerged in an endless stream, and the digital economy has become a new driving force for economic growth. But at the same time, competition disorder problems such as platform "choose-one", "hunting mergers and acquisitions", and low-price dumping have gradually emerged, which have had a significant impact on competition in related fields and consumer welfare.
At the end of 2020, the central government issued a clear signal - "strengthen anti-monopoly and prevent disorderly expansion of capital." Immediately afterwards, the ice was broken for the first time in the platform economy and anti-monopoly enforcement. After that, the State Administration for Market Regulation released a number of benchmark "choose-one" cases on the platform, which sounded the alarm for the industry. How the antitrust law revision responds to the antitrust challenges brought by the digital economy continues to attract attention from all walks of life.
According to Yang Heqing, spokesperson of the Legal Affairs Committee of the Standing Committee of the National People's Congress, this amendment implements the Party Central Committee's decision-making and deployment on strengthening anti-monopoly and preventing disorderly expansion of capital. It further clarifies anti-monopoly in accordance with the competition methods and characteristics of the platform economy. Applicable rules of relevant systems in the field of platform economy.
can see that the newly revised Anti-Monopoly Law has added new provisions in the general provisions. Operators shall not use data and algorithms, technology, capital advantages, platform rules, etc. to engage in monopolistic behavior prohibited by this law. The chapter on abuse of market dominance also stipulates special provisions: operators with market dominance shall not use data and algorithms, technology, platform rules, etc. to engage in abuse of market dominance as specified in the preceding paragraph.
Deng Zhisong, senior partner of Dacheng Law Firm, told Nandu reporters that actively responding to platform economic antitrust issues through legislation and law enforcement has become a global consensus including major jurisdictions such as China, the United States, and the European Union. In fact, the monopoly issues involved in the platform economy are very wide, including common monopoly behaviors suspected of abusing market dominance such as "choosing one of two", "self-preferential treatment" and "big data killing", and may also involve "algorithmic collusion". " most-favored-nation clauses" and "strangling mergers and acquisitions" and other monopolistic behaviors related to monopoly agreements and concentration of operators. Therefore, the general provisions provide comprehensive provisions on the platform economy and pay attention to various monopolistic behaviors that platform operators may be involved in, which can play an outlining and guiding role.
Not only that, Deng Zhisong believes that the problems of the platform economy appear more in the form of abuse of market dominance. At the same time, the impact of eliminating and restricting competition caused by platform companies’ abuse of market dominance is usually the most typical and widespread, so it is necessary to reiterate it in the chapter on abuse of market dominance.
It is worth mentioning that Wang Jian, dean of the School of Law and Political Science at Zhejiang Science and Technology University and a member of the Expert Advisory Group of the Anti-Monopoly Committee of the State Council, specifically pointed out the above two subtle legislative adjustments to Nandu reporters. For example, the general provisions of the first draft of the Anti-Monopoly Law are stated as "Operators shall not abuse data and algorithms...", and the latest legislative expression has adjusted the word "abuse" to "utilization". "'Abuse' has a derogatory connotation. Before making a specific judgment on the illegality of the behavior, this expression is suspected of prejudgment; and the legislative term should be objectively described, and it is more appropriate to change it to 'utilization'."
stated elsewhere The adjustment was to delete one sentence. The previous draft of the first review stipulates that "if an operator with a dominant market position uses data... to impose unreasonable restrictions on other operators, it is an abuse of market dominance as specified in the preceding paragraph." The latest legislative statement will "restrict other operators." Delete the sentence "the operator imposes unreasonable restrictions".
In Wang Jian’s view, the original statement may lead people to misunderstand that the abuses of platform companies are independent abuses, but in fact the nature of platform abuses has not changed, but the tools for committing abuses have increased, such as data And algorithms, technology, platform rules, etc.; and unreasonable restrictions are only one form of abuse by platform companies, and cannot be the entire abuse by platform companies. Therefore, deleting this expression makes the legislative expression more precise.
Deputy Dean of the School of Civil, Commercial and Economic Law of China University of Political Science and Law Liu Jifeng mentioned that from a global perspective, China's digital economy antitrust governance is at the forefront of the world. Among the three major types of monopoly, the latest legislation has responded to the abuse of market dominance by platforms and the concentration of operators. Currently, there is still a monopoly agreement left. In particular, how to regulate global problems such as "algorithmic collusion" still needs further work. explore.
Standards
Setting up a separate chapter on the digital economy may undermine legislative harmony
A Nandu reporter learned from an interview that academic circles generally agree to amend the law to respond to antitrust issues in the digital economy. In the earliest version of the law revision, the four words "digital economy" were written. Later it was revised repeatedly. There are different opinions on how to fix it specifically.
For example, some scholars suggested "creating a separate chapter" - setting up a special chapter under the current antitrust law framework. There are also " radicals " who proposed to follow the example of Europe and the United States and issue a special law on digital economy antitrust. However, more experts believe that the current antitrust law framework is sufficient to respond to the challenges of the digital economy.
Judging from the final document, the proposal to establish a special antitrust chapter for the digital economy was not adopted by legislators.An important reason is that the establishment of special chapters will lead to overlapping and duplication of laws, which creates logical problems.
Wang Xianlin told Nandu reporters that it is indeed unnecessary and feasible to set up a special chapter. At present, the provisions of legislation involving the digital economy have been reflected, but they are relatively principled and general. The antitrust law itself can only determine some broad principle frameworks, and some specific issues need to be resolved through detailed rules such as relevant antitrust regulations or guidelines in the future to enhance the effectiveness and operability of legal regulations.
Wang Jian also holds similar opinions. He believes that the establishment of a special chapter will destroy the integrity and harmony of the entire antitrust legislative system, and there is no precedent for setting up a special chapter. Moreover, the overarching provisions in the General Provisions of the Anti-Monopoly Law actually cover situations such as monopoly agreements, abuse of market dominance, and concentration of operators.
As for whether special legislation is needed, Wang Jian believes that my country’s platform companies are different from Europe and the United States in many aspects such as their development foundation, scale and strength, market environment, and behavioral manifestations. It is not realistic to “copy” the governance experience of Europe and the United States. “We still have to go.” Walk, keep steady, and take a look.”
Wang Yong is deputy director of the Institute of Economics at Tsinghua University. Like the above-mentioned interviewed legal scholars, he also believes that the current legislative layout is very suitable as he is an economist. "If there is special legislation, it means that it will be highly targeted and restrictive for the platform economy."
Wang Yong particularly emphasized, The digital economy is an economic form relative to the agricultural economy and industrial economy. In the form of the digital economy, the most important organizational form is platform enterprises. At present, China still regards itself as a developing country. Whether from the perspective of geopolitics and global digital competition, it should continue to deepen its understanding of the platform economy and capital, and pay attention to the important role of the platform economy in connecting the industrial chain. .
Therefore, Wang Yong believes that anti-monopoly law should not only promote the continuous standardization of the platform economy, but also emphasize healthy development. After legislating to determine the bottom line of behavior and basic game rules of the platform economy, the next step is to enter normalized supervision.
Fines
Fines for undeclared mergers and acquisitions increased tenfold
The applicable rules for antitrust in the platform economy not only have special provisions in the general provisions and abuse of market dominance chapters, but are also reflected in some provisions on the concentration of operators, and responded to the "amount of penalties" There are prominent problems such as "low" and "killing mergers and acquisitions".
Nandu reporter noticed that due to factors such as low penalties, law enforcement agencies not clarifying whether VIE architecture companies should be included in the scope of antitrust review, and corporate compliance awareness being weak, there have been a large number of "reported but not reported" cases in the Internet industry. .
For the original legislators, the current boom in the platform economy was unexpected. In order to solve this problem, the newly revised Anti-Monopoly Law has significantly increased the intensity of penalties. The maximum fine for such "reportable but not reported" cases will be adjusted from 500,000 yuan to 5 million yuan; if it has the effect of eliminating or restricting competition, , a fine of less than 10% of the previous year's sales may be imposed.
Deng Zhisong told Nandu reporters, "This means that the fines paid by platform companies for failing to declare in accordance with the law may increase at least 10 times from the previous 500,000 yuan, which is a drop in the bucket."
On June 8, " China Antitrust Enforcement Annual Report (2021)" was officially released. It was disclosed that in 2021, law enforcement agencies "in-depth verified more than a thousand clues in cases where platform companies failed to declare operator concentration in accordance with the law, opened nearly 200 cases for investigation, and imposed penalties on 98 cases of failure to declare in accordance with the law and disclosed them to the public." It can be seen that there are also In more than half of the cases filed for investigation, the results have not been publicly disclosed. After the antitrust amendments are passed, whether these cases will be governed by the new law or the old law is also an issue that the market is more concerned about.
Wang Xianlin told Nandu reporters that in principle, neither the enacted law nor the revised law has retroactive effect. Article 93 of the Legislation Law stipulates that laws, administrative regulations, local regulations, autonomous regulations and separate regulations and rules are not retroactive, but are made to better protect the rights and interests of citizens, legal persons and other organizations. Except for special provisions.According to this principle, for cases that occurred before the amendment came into effect, the principle of should be followed and should be given leniency.
Dai Long, executive director of the Competition Law Research Center of China University of Political Science and Law, analyzed that if a company meets the declaration standards but fails to declare, this itself is an illegal act, and there is no so-called "no prosecution after the statute of limitations" in the Anti-Monopoly Law. According to regulations, as long as the state and impact of illegal concentration of undertakings are still there, or have caused the effect of eliminating actual competition, then anti-monopoly law enforcement agencies have the right to investigate.
In his view, although there is a principle of non-retroactivity of laws, in terms of legal choice, new laws are generally better than old laws. Therefore, for concentration cases that were illegally implemented but not reported in the past, it is possible that severe penalties will be imposed according to the new standards.
Deng Zhisong also noticed the particularity of illegal implementation of concentration of undertakings. He said that unlike general behavior, a merger and acquisition does not terminate when the transaction is completed, and its post-merger status continues. Therefore, illegal concentration behaviors may be regarded as continuing. "On the one hand, law enforcement agencies can pursue accountability at any time regardless of whether the transaction has been completed; on the other hand, no matter when the investigation is conducted, the illegal concentration of illegal activities is in the present tense. Therefore, whether the new law or the old law should be applied during the investigation , there is a certain ambiguity. "
Declaration
Anti-monopoly law enforcement agencies may require operators to declare
According to Article 21 of the current Anti-Monopoly Law, if the concentration of operators reaches the reporting standards specified by the State Council, the operator shall file a complaint with the State Council in advance. Monopoly law enforcement agencies must declare, and concentration shall not be implemented if no declaration is made.
If the declaration threshold is not reached, should the company declare? This revision of the law is in response to this - if there is evidence that the concentration of operators has or may have the effect of eliminating or restricting competition, the anti-monopoly law enforcement agency of the State Council can require the operator to declare.
Many experts told Nandu reporters that this was in response to the concentration of mergers and acquisitions in the platform economy. According to the current rules and regulations, the mandatory reporting standard for concentration of undertakings is based on turnover, which results in some transactions possibly evading antitrust review.
Deng Zhisong gave an example to Nandu reporters. Some companies rely on subsidies to seize the market, forming a competitive pattern in which two companies dominate and divide the market. A merger between these two companies is likely to have the effect of eliminating or restricting competition. However, both companies have had no turnover for a long time due to the "subsidy war", or even though they have turnover, they are far from meeting the declaration standards.
Therefore, the new provisions in this revision of the law will help fill the gaps in law enforcement and allow antitrust law enforcement agencies to be more flexible and calmly face future changes.
In Wang Jian’s view, compared with directly launching an investigation, this change can act as a buffer and actually give companies an opportunity to “reform their mistakes.” In this regard, Deng Zhisong also holds a positive attitude - "This makes companies that have not met the declaration standards more predictable as to whether they need to declare, and also reduces the situation where companies directly receive fines due to their own mistakes in judgment."
Nandu Reporter It is noted that the "Regulations of the State Council on Declaration Standards for Concentrations of Undertakings" promulgated in 2008 has been included in this year's legislative plan of the State Administration for Market Regulation. Taking into account factors such as China's economic development level and inflation in the past 14 years, how the concentration reporting standards will change after the passage of the newly revised Anti-Monopoly Law has also attracted much attention.
Many experts speculate that this adjustment may increase the current reporting standards for a turnover of 400 million, or add new indicators such as "transaction volume" in accordance with the practices of foreign jurisdictions. It may also clarify special reporting standards for large enterprises or specific industries. , and even authorize antitrust law enforcement agencies to make regular adjustments.
