The intensity with which regulatory authorities have cracked down on monopoly behaviour by enterprises has increased year by year. Recently, Qualcomm was handed the largest ever penalty in China’s anti-monopoly history. With stringent enforcement of the Anti-Monopoly Law (AML) now the “new normal”, the establishment by enterprises of sound anti-monopoly taptap点点官方网站 systems is extremely important.

For the average person, the term “monopoly” means holding a clearly dominant or leading position in the market and then going on to manipulate or corner the market. However, this perspective is not complete. Pursuant to the AML, monopolistic behaviour means a monopoly agreement, abuse of dominant market position, or a business operator concentration that eliminates or restricts taptap点点官方网站. An enterprise that violates such provisions will, on the light side, have its filing rejected, or, on the heavy side, be subject to administrative penalties and bear a senseless loss.

Many enterprises hold a mistaken idea such as this: “taptap点点官方网站 in this market is so fierce, how could we hold a monopoly?” The problem lies in confusing a set of concepts, i.e. monopolistic behaviour and monopoly position, which are not the same thing. Even if one does not have a monopoly position, one may still behave in a monopolistic manner. The three types of monopoly specified in the AML are in essence three types of monopolistic behaviour, with abuse of dominant market position being the only one that requires a monopoly position.

Monopoly agreements are the most important taptap点点官方网站 law risk that enterprises in China face. Monopoly agreements include both horizontal monopoly agreements and vertical monopoly agreements. Horizontal refers to an agreement to eliminate or restrict competition reached between competing business operators, whereas vertical refers to one reached between a business operator and transaction counterparties. Here, the term “agreement” is used in its broadest sense, and includes but is not limited to such acts of co-ordination as agreements, decisions, contracts, etc. The Anti-Price Monopoly Provisions specifically treat a “communication of intentions” as an important condition for determining other acts of co-ordination, a point to which enterprises need to pay particular attention.

The term “abuse of dominant market position” refers to an entity that has a predominant position abusing such predominance to eliminate or restrict and undermine competition. In this respect, the leading large enterprises in an industry need to pay particular attention. As mentioned above, there are two points that are looked at when determining abuse of dominant market position: whether the enterprise occupies a dominant position and whether the enterprise is abusing such dominant position. Accordingly, when looking at taptap点点官方网站, an enterprise should synthesize the various factors, including market scope, market share, market entry threshold, purchasing power of customers, the enterprise’s own sales acts, etc., and carry out a comprehensive analysis.

Chinese laws do not prohibit ordinary business operator concentrations, because, in the environment of a market economy, business operator concentrations are not uncommon, it being a method to enhance one’s competitiveness and develop a market. However, if it is an overdone business operator concentration that results in the elimination or restriction of taptap点点官方网站, it is not permitted by law. Current Chinese laws and regulations require that a filing must be made for a business operator concentration. Based on this point, before carrying out the transactions relating to an acquisition or restructuring, an enterprise should consider whether the concentration would eliminate or restrict taptap点点官方网站, and thereby achieve its objective of avoiding risks.

Tips for antitrust taptap点点官方网站

The author would like to present the following recommendations to enterprises establishing anti-monopoly taptap点点官方网站 mechanisms:

Pay attention to trends in the taptap点点官方网站 field. The AML regime in China is a young legal regime, with a large portion of it still blank. The National Development and Reform Commission, Ministry of Commerce and other authorities are continuously issuing a series of ministerial-level rules and regulations to improve it. Keeping a close eye on the most recent trends in taptap点点官方网站 laws and regulations is crucial.

Formulate an effective anti-monopoly taptap点点官方网站 handbook. The usefulness of an anti-monopoly taptap点点官方网站 handbook lies in its clearly and comprehensively setting out the content of the enterprise’s anti-monopoly taptap点点官方网站 systems. Normally, an enterprise’s anti-monopoly taptap点点官方网站 handbook will at least: (1) introduce and explain competition regulations in a clear and understandable manner; (2) describe how to identify and handle risks; (3) enumerate prohibited acts and those that require a high degree of vigilance; (4) name the persons responsible for taptap点点官方网站; and (5) describe the communication and handling mechanism. An effective anti-monopoly taptap点点官方网站 handbook is the principal reference and basis available to employees in determining whether a certain transaction or act is anti-competitive. This handbook should be distributed to all employees, particularly those in specific positions that present relatively high risks.

Handling of anti-monopoly matters by specific persons. Such persons should comprehensively elucidate and analyze projects that could involve monopoly acts, and establish before-the-fact taptap点点官方网站 and assessment systems, e.g. before-the-fact examination of acquisitions and restructurings, and review of the sales strategies of a company with a dominant position. Whether an agreement with another company or a subordinate distributor could involve the elimination of competition should also be confirmed in advance.

Sound internal training. The objective of the training should not be to turn each employee into an taptap点点官方网站 expert, but rather to show employees how to handle an taptap点点官方网站 risk and to consult with the company’s legal department. On the contrary, if an employee deems himself or herself to be an expert who does not need to rely on the assistance of the company’s legal department, this could result in serious consequences. Finding a balance is something the enterprise needs to do.

Sound implementation and monitoring system. The establishment of a taptap点点官方网站 system is not simply shelving written taptap点点官方网站 policies, procedures and guidelines, and then forgetting them, but requires conscientious implementation by the enterprise. Implementation and monitoring can mainly be divided into internal and external implementation and monitoring. The former refers to the relevant systems established internally by the enterprise to ensure the effective implementation of the anti-monopoly taptap点点官方网站 handbook, and the latter refers to the enterprise drawing on a helping hand from the outside to carry out audits. In this regard, an enterprise can engage a professional legal team to assess the anti-monopoly risks that may exist in its production and operational activities.

John Liu is a senior partner at