Recently, the 35th meeting of the Standing Committee of the 13th National People's Congress voted to adopt a decision on amending the Anti-Monopoly Law. According to the official website of the National People's Congress of China, the new Anti-Monopoly Law has made significant ch

revised

A few days ago, the 35th meeting of the Standing Committee of the 13th National People's Congress voted to adopt a decision on amending the Anti-Monopoly Law . According to the official website of the National People's Congress of China, the new Anti-Monopoly Law has made significant changes to 24 clauses, and the relevant expressions of 10 clauses have been adjusted.

has been revised for the first time in more than ten years since its implementation. What "patches" have been made to the antitrust law? Why does the safe harbor system not include horizontal monopoly agreements? Fair Competition Review System What is the significance of entering the law for the first time? After improving the anti-monopoly related systems from a legal perspective, which implementation details still need to be clarified by supporting regulations?

Innovation

Added the legislative goal of "encouraging innovation"

Returning to the legislative purpose of the Anti-Monopoly Law, the first-instance draft added "encouraging innovation" to the first article of the general provisions. This change has caused a lot of discussion. An interview with a reporter from Nandu found that supporters believe that innovation is the first driving force for development. In the context of countries all over the world strengthening their strategic deployment of innovation, it is of practical significance to include the promotion of "encouraging innovation" in my country's anti-monopoly law revision.

Han Wei, associate professor of at the University of the Chinese Academy of Social Sciences, remembers that in the early years, some people advocated adding "innovation" to the antitrust law as a legislative goal. With the development of the digital economy , more attention should be paid to innovation. Some companies believe that many behaviors of platform companies are based on innovation. If encouraging innovation is included in the legislative goals, companies will have greater room for defense.

Regarding this view, Han Wei holds a conservative opinion. He told Nandu reporters that among the multiple legislative goals of the antitrust law, the core should be to "protect fair market competition", while the newly added goal of "encouraging innovation" may artificially create cognitive troubles, and it is more suitable to focus on knowledge. In the property rights law system, or based on the competitive pressure mechanism of antitrust on innovation, it is more accurate to express it as "promoting innovation".

Distinguished Professor of Shenzhen University and researcher of the Institute of Law of the Chinese Academy of Social Sciences Wang Xiaoye also believes that the direct purpose of antitrust law is to protect the competition process. Under the pressure of full market competition, companies will naturally find ways to improve their own efficiency and enhance innovation capabilities to improve business management and save costs. Moreover, the current antitrust law has relevant provisions to protect innovation - for example, the chapter on monopoly agreements stipulates that if the monopoly agreement reached by operators is "for the purpose of improving technology and researching and developing new products," it can be exempted.

Distinguished Professor of Shanghai Jiao Tong University and member of the Expert Advisory Group of the State Council Anti-Monopoly Commission Wang Xianlin also noticed that there is great controversy among all parties as to whether the anti-monopoly law needs to add a new legislative goal of "encouraging innovation". "This disagreement is not about whether antitrust law needs to pay attention to innovation, but whether this value function itself included in maintaining competition needs to be separately proposed."

If you want to add the expression "innovation", different experts have different opinions. Views - For example, slightly adjust its position to "encourage innovation", and some suggest changing the wording in consideration of coordination with intellectual property law.

Wang Xianlin mentioned that unlike intellectual property law, which directly encourages innovation by granting rights holders exclusive rights for a certain period of time ("carrot"), antitrust laws promote innovation by regulating monopolistic behavior and maintaining competition mechanisms ("stick"). , therefore, if the value goal of innovation is introduced into the purpose of the antitrust law, it should not be expressed as “encouraging innovation”, but should be expressed as “promoting innovation”.

In this revision of the law, the legislative purpose of “encouraging innovation” was finally retained. The new antitrust law adds "encouraging innovation" after Article 1 of "protecting fair market competition". In Wang Xiaoye's view, this has declaratory significance and may not have much impact on law enforcement. However, if the protection of competition and the encouragement of innovation are simply opposed to each other, there will be obvious problems.

Competition

Strengthening the basic position of competition policy

Since the announcement of the plan to amend the law, the specific how to amend the antitrust law has attracted much attention.Previously, China University of Political Science and Law Vice President Shi Jianzhong mentioned in an exclusive interview with Nandu that the anti-monopoly law revision should highlight key points and grasp the required areas, including clarifying the basic status of competition policy and incorporating the fair competition review system. legalization. The suggestion

was adopted. This revision of the law emphasizes that the country adheres to the principles of marketization and rule of law, strengthens the basic position of competition policy, formulates and implements competition rules that are compatible with the socialist market economy, improves macro-control, and establishes a unified, open, competitive, and orderly system. market system.

strengthens the basic position of competition policy. Dai Long, executive director of the Competition Law Research Center of China University of Political Science and Law, feels deeply about this.

He told Nandu reporters that the changes in the status of competition policy are closely related to my country's economic development ideas in different periods. Looking back at the time when the Anti-Monopoly Law was promulgated in 2008, the overall level of my country's economic development was not high and development was the most important task. Therefore, the orientation at that time was to focus on industrial policy and supplemented by competition policy. Nowadays, with the continuous improvement of my country's economic level, more emphasis is placed on creating a fair competitive market environment and giving play to the decisive role of the market in resource allocation. Therefore, competition policy represented by anti-monopoly law has finally "come to the forefront."

In addition, this revision of the law also includes "the state establishing and improving a fair competition review system". This means that fair competition review has been elevated from a previous policy provision to a legal system.

Specifically, the new Article 5 of the Anti-Monopoly Law stipulates that administrative agencies and organizations authorized by laws and regulations with the function of managing public affairs shall conduct fair competition reviews in accordance with the law when formulating regulations involving the economic activities of market entities.

According to Nandu reporters, the fair competition review system aims to regulate the behavior of government agencies, prevent the introduction of policies and measures that eliminate or restrict competition, and curb administrative monopoly behavior. The

system can be traced back to 2016, when the State Council's [2016] No. 34 document first proposed establishing a fair competition review system in the construction of the market system. In May 2021, five ministries and commissions including the State Administration for Market Regulation issued the " Fair Competition Review System Implementation Rules ", requiring the full implementation of the fair competition review system and strengthening the rigid constraints of the fair competition review system.

Antitrust law and fair competition review system are two important starting points for strengthening competition policy. Deputy Dean of the School of Civil and Commercial Economics of China University of Political Science and Law Liu Jifeng likened the fair competition review system and anti-monopoly law to two protective nets - the fair competition review system is the first protective net, emphasizing prior supervision, mainly through Administrative agencies use self-examination to filter monopoly risks, and antitrust laws come into play in the middle and later stages of the implementation of abstract administrative behavior .

Nandu reporter noticed that in May this year, the State Administration for Market Regulation organized four pilot projects in nine provinces (cities) including Tianjin, Jilin, and Shanghai, including information construction of fair competition review, reporting handling, joint review of major policies and measures, and fair competition index. It is reported that this pilot will cover the entire chain of fair competition review implementation.

It is worth mentioning that anti-administrative monopoly is also a major law enforcement focus this year, and many places have launched special law enforcement actions. On June 9, the State Administration for Market Regulation reported this year’s first batch of 12 special action cases to stop the abuse of administrative power to exclude and restrict competition, mainly involving the fields of medical and health, transportation, insurance, education, construction and other fields.

Safe Harbor

Safe Harbor rules were first enacted into law

After more than ten years, the Antitrust Law has been revised for the first time. This revision also further improves antitrust-related institutional rules and attempts to clarify divergent issues that arise in law enforcement practice. . For example, in order to solve the practical problem of "non-stop mergers and acquisitions and insufficient time", the law was revised to introduce a "stop clock" system that suspends the calculation of the review period for concentration of undertakings, leaving more flexible and sufficient time for law enforcement agencies and enterprises.

In addition, Nandu reporters found that the new "safe harbor" rule in the monopoly agreement chapter was one of the most discussed focuses in the process of amending the law.

Paragraph 1 of Article 18 of the New Anti-Monopoly Law stipulates that operators are prohibited from entering into the following monopoly agreements with transaction counterparts: (1) fixing the price of goods for resale to third parties; (2) limiting resale to third parties The lowest price of goods; (3) Other monopoly agreements identified by the anti-monopoly law enforcement agency of the State Council.

On this basis, the second paragraph of the revised law clearly stipulates, "As for the agreements specified in the first and second paragraphs of the previous paragraph, if the operator can prove that they do not have the effect of excluding or restricting competition, they will not be prohibited." Also. That is to say, if the company can provide evidence to prove that its resale price maintenance behavior does not have anti-competitive effects, then this can be used as a defense.

At the same time, the new paragraph 3 of Article 18 of the new law stipulates the introduction of a "safe harbor" system, clarifying that operators can prove that their market share in the relevant market is lower than the standards stipulated by the anti-monopoly law enforcement agency of the State Council, and complies with the anti-monopoly law enforcement agency of the State Council. Other conditions stipulated shall not be prohibited.

This will help reduce the risks of vertical monopoly agreements faced by small businesses. An expert who has been deeply involved in the law revision pointed out to Nandu reporters that the introduction of quantifiable thresholds will help increase market confidence, make self-assessment more convenient for companies, and have clear expectations for compliance risks. Until then, this uncertainty will cause huge confusion for law enforcement agencies and businesses, especially those with smaller market sizes.

Nandu reporter learned from the interview that in the first instance draft, the "safe harbor" rule is not limited to vertical monopoly agreements. Its scope of application covers horizontal monopoly agreements , and does not apply to "core cartel " such as fixed prices and limited production quantities. make a distinction. Because core cartels harm competition particularly seriously, they are subject to strict regulations in antitrust jurisdictions in various countries. Therefore, the first-instance draft applied the "safe harbor" principle to the design of both horizontal and vertical monopoly agreements, which was strongly opposed by many experts.

Judging from the final result, the opinions of experts were adopted. Some people believe that this reflects the cautious attitude of legislators when facing controversial provisions. Although the scope of application of the "safe harbor" has been narrowed, some people believe that the current design is still flawed, and it should be further clarified that it only applies to the cover clause .

Wang Xiaoye believes that according to Paragraph 2 of Article 18 of the New Anti-Monopoly Law, safe harbor rules cannot be applied to agreements that fix resale prices and limit resale minimum prices, because the exemption of these agreements requires operators to prove that these agreements do not exclude or restrict competition. Effect. That is to say, in this case, the operator cannot be exempted based on market share. She believes that according to this revision, the "safe harbor" rule mainly applies to the safety clause in Article 18, paragraph 1, item 3, that is, "other monopoly agreements identified by the anti-monopoly law enforcement agency of the State Council."

Han Wei also proposed that on the premise that Article 20 already includes several exemptions, "safe harbor" rules should be added. The main value is that it can alleviate the uncertainty caused by the safety clause. "The safe harbor should mainly deal with the gray list (cover clauses) and dig out a white area from the gray area, rather than targeting the black list (principled prohibition clauses)."

In Deng Zhisong's view, the "safe harbor" rules play an important role in practice Its role has yet to be explored by law enforcement agencies in the subsequent formulation of supporting regulations and the development of law enforcement activities.

Penalties

Increase the penalties for some monopolistic behaviors

This revision of the law has significantly increased the penalties for some monopolistic behaviors. This is also the adjustment that the industry is most concerned about. With the formal implementation of the new law, the illegal costs for operators to implement monopolistic behavior will increase significantly.

Regarding the illegal implementation of concentration of undertakings, the newly revised Anti-Monopoly Law clarifies that the maximum fine amount for "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, then A fine of up to 10% of the previous year's sales may be imposed.

operators reach and implement monopoly agreements, and the legal responsibilities they face have also changed. The new anti-monopoly law stipulates that violators with no sales in the previous year may be fined up to 5 million yuan. If the monopoly agreement reached has not been implemented, the fine will be significantly increased from a maximum of 500,000 yuan to 3 million yuan.If an industry association organizes operators in the industry to reach a monopoly agreement, the maximum fine will also increase from 500,000 yuan to 3 million yuan.

Not only enterprises, but also individuals may face antitrust penalties for participating in the implementation of monopoly agreements. The new law stipulates that if the legal representative, principal person in charge and directly responsible personnel of an operator bear personal responsibility for reaching a monopoly agreement, they may be fined up to 1 million yuan. If an operator organizes other operators to reach a monopoly agreement or provides substantial assistance to other operators to reach a monopoly agreement, the provisions of the preceding paragraph shall apply.

In the past anti-monopoly law enforcement process, there have been cases of violent resistance to the law and obstruction of anti-monopoly law enforcement agencies in handling cases. For this type of behavior, the newly revised anti-monopoly law has significantly increased the cost of violating the law.

Article 62 of the new law shows that for review and investigation carried out by anti-monopoly law enforcement agencies in accordance with the law, refuse to provide relevant materials and information, or provide false materials and information, or conceal, destroy, transfer evidence, or otherwise refuse or hinder the investigation. If the violation occurs, the anti-monopoly law enforcement agency shall order it to make corrections. The fine for the unit has been changed from a maximum of 1 million yuan to a fine of less than 1% of the previous year's sales. If there was no sales in the previous year or the sales are difficult to calculate, a fine of less than 5 million yuan will be imposed. The maximum individual fine has also been increased from 100,000 yuan to 500,000 yuan.

It is worth noting that the introduction of special deterrence clauses is also a major manifestation of the revision of the law to increase the intensity of administrative penalties. Article 63 of the new law states that “for violations of the provisions of this law, the circumstances are particularly serious, the impact is particularly bad, and the consequences are particularly severe”, the law enforcement agencies may determine the specific amount of the fine between two and five times the corresponding fine amount.

This means that if an operator illegally implements monopolistic behavior and is fined 10% of the previous year's sales, he may also face a double fine. In order to improve the stability and predictability of the law, some scholars have suggested explaining the three "special" prerequisites for the application of this article.

After the special deterrent clause, the new law also adds an article stating that operators who are subject to administrative penalties for violating the provisions of this law shall be recorded in their credit records in accordance with relevant national regulations and made public to the public. In addition, public interest litigation was included in the antitrust law for the first time. The new clause clarifies that if an operator implements monopolistic behavior and harms public interests, the People's Procuratorate at or above the districted city level may file a civil public interest litigation with the People's Court in accordance with the law.

According to Deng Zhisong’s understanding, since the Anti-Monopoly Law was implemented 14 years ago, compared with administrative enforcement, court litigation has not been active. An important reason is that the burden of proof in antitrust litigation is relatively heavy, and it is difficult for victims of monopolistic behavior to obtain evidence of monopolistic behavior. However, my country does not have a class action system or a triple damages system similar to the United States. Anti-monopoly administrative law enforcement relies on the state's public power to investigate and collect evidence, and has strong efficiency and deterrence. Victims of monopolistic behavior, whether they are enterprises or individual consumers, lack the corresponding resources to conduct investigations and evidence collection, and often cannot afford the high litigation costs.

Wang Jian, dean of the School of Law and Politics at Zhejiang Sci-Tech University and a member of the expert advisory group of the Anti-Monopoly Committee of the State Council, also said that there is currently no effective connection mechanism between law enforcement and justice to form a synergy. In overseas law enforcement, after a company is investigated and handled by antitrust law enforcement agencies, consumers often file subsequent lawsuits. The winning rate is very high, but this is rare in China, and the success rate is very low. In this regard, he suggested that the linkage mechanism between administrative law enforcement and justice should be further improved. Article 11 of the revised Anti-Monopoly Law also clearly stated the requirements. How to implement it in the future deserves attention.

A10-13 version

Produced by: Nandu Antitrust Research Group

Written by: Nandu Reporter Li Ling Huang Huishi Huang Liling