Recently, Decree No.65 of the State Administration of Market Supervision and Administration promulgated the prohibition of monopoly agreements, which came into effect on April 15, 2023.
Market Supervision authorizes the market supervision and administration departments of provinces, autonomous regions and municipalities directly under the Central Government (hereinafter referred to as provincial market supervision departments) to be responsible for the anti-monopoly law enforcement of monopoly agreements within their respective administrative areas. The anti-monopoly law enforcement agencies referred to in
these Provisions include the General Administration of Market Supervision and the provincial market supervision departments. Article
3 The General Administration of Market Supervision shall be responsible for investigating and dealing with the following monopoly agreements:
(1) those that cross provinces, autonomous regions and municipalities directly under the Central Government;
(2) those that are relatively complicated or have a significant impact on the whole country; and
(3) those that the General Administration of Market Supervision deems it necessary to directly investigate and deal with. The General Administration of Market Supervision may designate provincial market supervision departments to investigate and deal with the monopoly agreements listed in the
preceding paragraph. When
provincial market supervision departments investigate and deal with monopoly agreements according to authorization, they shall report to the General Administration of Market Supervision in a timely manner if they find that they do not fall within the scope of investigation and punishment of their own departments, or if they fall within the scope of investigation and punishment of their own departments, but it is necessary for them to be investigated and punished by the General Administration of Market Supervision. Article
4 When investigating and dealing with monopoly agreements, the Anti-monopoly Law Enforcement Agency shall treat all business operators equally. Article
5 a monopoly agreement refers to an agreement, decision or other concerted action to eliminate or restrict competition.
The agreement or decision may be in writing, oral, etc.
Other concerted acts refer to the acts in which there is no explicit agreement or decision between operators, but there is coordination in essence. Article
6 The following factors shall be taken into consideration in determining other concerted acts:
(1) whether the market acts of business operators are consistent;
(2) whether business operators have contacted each other or exchanged information;
(3) Whether the operator can give a reasonable explanation for the consistency of the act;
(4) The market structure, competition situation and market changes of the relevant market. Article
7 Relevant markets refer to the scope of commodities and regions in which operators compete for specific commodities or services (hereinafter referred to as commodities) within a certain period of time, including relevant commodity markets and relevant regional markets.
To define the relevant market, demand substitution analysis should be carried out from the perspective of demanders. Supply substitution should also be considered when the competitive constraints of supply substitution on the behavior of operators are similar to demand substitution. To
define the relevant commodity market, from the perspective of demand substitution, we can consider the response of demanders to changes in commodity prices and other factors, the characteristics and uses of commodities, and sales channels. From the perspective of supply substitution, we can consider the difficulty of other operators to change production, the market competitiveness of the goods provided after the change of production and other factors.
To define the relevant commodity market in the economic field of the platform, we can define the relevant commodity market according to the commodities on one side of the platform, or define the platform as a whole as a relevant commodity market according to the multilateral commodities involved in the platform, or define multiple relevant commodity markets separately, and consider the relationship and impact between the relevant commodity markets. To
define the relevant regional market, from the perspective of demand substitution, we can consider the transportation characteristics and costs of commodities, the actual areas where most demanders choose commodities, and the trade barriers between regions. From the perspective of supply substitution, we can consider the timeliness and feasibility of commodities supplied by other regional operators. Article
8 The following monopoly agreements on fixing or changing commodity prices are prohibited for operators with competitive relations:
(1) fixing or changing the price level, the range of price changes, the profit level or other fees such as discounts and handling fees;
(2) It is agreed to adopt the standard formula, algorithm and platform rules based on which the price is calculated;
(3) It restricts the independent pricing power of the operators participating in the agreement;
(4) It fixes or changes the price by other means. The operators with competitive relationship referred to in
these Provisions include the actual operators competing in the same relevant market and the potential operators who may enter the relevant market to compete. Article
9 The following monopoly agreements on the limitation of the production or sale quantity of commodities are prohibited for operators with competitive relations:
(1) to limit the production quantity of commodities by means of limiting the output, fixing the output or stopping the production, or to limit the production quantity of specific varieties or models of commodities;
(2) limiting the quantity of goods sold or the quantity of goods of a particular variety or type sold by limiting the quantity of goods put into sale or other means;
or (3) limiting the quantity of goods produced or sold by any other means. Article
10 It is prohibited for operators with competitive relations to reach the following monopoly agreements on the division of sales markets or raw material procurement markets:
(1) The division of commodity sales areas, market shares, sales targets, sales revenue, sales profits or the types, quantities and time of commodities sold;
(2) Dividing the procurement area, type, quantity, time or supplier of raw materials such as raw materials, semi-finished products, spare parts and related equipment;
(3) Dividing the sales market or raw material procurement market by other means. The provisions of the
preceding paragraph on the division of sales markets or raw material procurement markets shall apply to data, technology and services. Article
11 Competitive operators are prohibited from reaching the following monopoly agreements on restricting the purchase of new technologies and new equipment or restricting the development of new technologies and new products:
(1) Restricting the purchase and use of new technologies and new processes;
(2) Restricting the purchase, lease and use of new equipment and new products;
(3) Restricting investment, research and development of new technologies, new processes and new products;
(4) Refusing to use new technologies, new processes, new equipment and new products;
(5) Restricting the purchase of new technologies and equipment or the development of new technologies and products by other means. Article
12. The following monopoly agreements on boycott of transactions by competing undertakings are prohibited:
(1) joint refusal to supply or sell goods to specific undertakings;
(2) joint refusal to purchase or sell goods of specific undertakings;
(3) Joint restriction of specific business operators not to conduct transactions with their competing business operators;
(4) Joint boycott of transactions by other means. Article
13 Competitive operators shall not use data and algorithms, technology and platform rules to reach monopoly agreements as stipulated in Articles 8 to 12 of this Regulation by means of communication, exchange of sensitive information and coordination of behavior. Article
14 An operator is prohibited from reaching any of the following monopoly agreements with its trading counterpart on commodity prices:
(1) fixing the price level, the range of price changes, the profit level, or discounts, handling charges, or other charges for the resale of a commodity to a third party;
(2) fixing the minimum price for the resale of a commodity to a third party or fixing the minimum price for the resale of a commodity to a third party by limiting the range of price changes, the profit level or the discount, handling fee and other expenses;
and (3) fixing the price of a commodity for resale or fixing the minimum price of a commodity for resale by other means. If an operator can prove that the agreement specified in the
preceding paragraph does not have the effect of eliminating or restricting competition, it shall not be prohibited. Article
15 Operators shall not use data and algorithms, technology and platform rules to reach monopoly agreements as stipulated in Article 14 of this Regulation by means of price unification, limitation or automatic setting of resale commodity prices. Article
16 Other agreements, decisions or concerted actions that do not fall into the circumstances listed in Articles 8 to 15 of these Provisions shall be recognized as monopoly agreements and prohibited if there is evidence to prove that they exclude or restrict competition. The General Administration of Market Supervision shall be responsible for the determination of the monopoly agreement mentioned in
the preceding paragraph, and the following factors shall be taken into account in the determination:
(1) the fact that the operator has reached and implemented the agreement;
(2) the market competition situation;
(3) The market share of the operator in the relevant market and its control over the market;
(4) The impact of the agreement on the price, quantity and quality of the commodities;
(5) The impact of the agreement on market access and technological progress;
(6) The impact of the agreement on consumers and other business operators;
and (7) Other factors related to the determination of the monopoly agreement. Article
17 If an operator reaches an agreement with the counterpart of the transaction, and the operator can prove that the market share of the operator participating in the agreement in the relevant market is lower than the standard prescribed by the General Administration of Market Supervision, and meets other conditions prescribed by the General Administration of Market Supervision, it shall not be prohibited.Article
18 The monopoly agreement concluded by the business operators with other business operators as prescribed in Article 19 of the Anti-monopoly Law shall include the following circumstances:
(1) The business operators are not parties to the monopoly agreement, and in the course of the conclusion or implementation of the monopoly agreement, It plays a decisive or leading role in the subject scope, main contents, performance conditions, etc. Of the agreement;
(2) a business operator enters into an agreement with a number of counterparties, so that the counterparties with a competitive relationship can communicate or exchange information through the business operator, and reach a monopoly agreement in accordance with Articles 8 to 13 of these Provisions.
(Three) organize other operators to reach monopoly agreements through other means. Article 19 of
the Anti-monopoly Law stipulates that an operator shall provide substantive assistance to other operators in reaching a monopoly agreement, including providing necessary support, creating key convenient conditions, or other important assistance. Article
19 The provisions of Articles 8 to 16 and 18 of these Provisions shall not apply if the operator can prove that the monopoly agreement under investigation falls under the provisions of Article 20 of the Anti-monopoly Law. Article
20 When determining whether a monopoly agreement under investigation falls into the circumstances prescribed in Article 20 of the Anti-monopoly Law, the Anti-monopoly Law Enforcement Agency shall consider the following factors:
(1) the specific form and effect of the agreement in realizing the circumstances;
(2) the causal relationship between the agreement and the realization of the circumstances;
(3) Whether the agreement is a necessary condition for the realization of the situation;
(4) Other factors that can prove that the agreement belongs to the relevant situation. When determining whether consumers can share the benefits arising from the agreement,
the anti-monopoly law enforcement agencies should consider whether consumers have gained benefits in terms of commodity prices, quality and types due to the conclusion and implementation of the agreement. Article
21 Trade associations shall strengthen the self-discipline of the industry, guide the operators of the industry to compete according to law, operate in compliance with regulations, and maintain the order of market competition. Trade associations are prohibited from engaging in the following acts:
(1) formulating and issuing articles of association, rules, decisions, notices and standards of trade associations that exclude or restrict competition;
(2) To convene, organize or promote the undertakings of the industry to reach agreements, resolutions, minutes, memorandums, etc. Containing the contents of eliminating or restricting competition;
(3) Other acts of organizing the undertakings of the industry to reach or implement monopoly agreements. The term "trade associations" as mentioned in
these Provisions refers to legal persons of various associations, societies, chambers of commerce, federations, promotion associations and other social organizations composed of economic organizations and individuals in the same industry who exercise the functions of industry service and self-discipline management. Article
22 The anti-monopoly law enforcement agency shall, in accordance with its functions and powers, or through such channels as reporting, handing over by the higher authorities, transferring by other authorities, reporting by the lower authorities, and voluntary reporting by operators, discover suspected monopoly agreements. Article
23 Where a report is made in written form and relevant facts and evidence are provided, the Anti-monopoly Law Enforcement Agency shall conduct necessary investigations. The written report generally includes the following contents:
(1) the basic information of the informer;
(2) the basic information of the informer;
(3) the relevant facts and evidence of the suspected monopoly agreement;
(4) Whether the same fact has been reported to other administrative organs or brought a lawsuit to the people's court.
The anti-monopoly law enforcement agency may require the informer to supplement the reporting materials according to the needs of its work.
For a real-name report in written form, the anti-monopoly law enforcement agency may, after the investigation and handling of the case is completed, give feedback to the informer on the results of the handling of the report according to the written request of the informer. Article
24 The anti-monopoly law enforcement agency shall, after necessary investigation of the suspected monopoly agreement, file a case if the following conditions are met:
(1) There is preliminary evidence to prove that the business operators have reached a monopoly agreement;
(2) The case falls within the scope of investigation of the department;
(3) Within the statutory time limit for imposing administrative penalties.
The provincial market supervision department shall file the case with the General Administration of Market Supervision within seven working days from the date of filing the case. Article
25 When investigating and dealing with monopoly agreements, the General Administration of Market Supervision may entrust provincial market supervision departments to conduct investigations. When investigating and dealing with monopoly agreements,
provincial market supervision departments may entrust lower market supervision departments to conduct investigations. Within the scope of entrustment, the entrusted
market supervision department shall carry out the investigation in the name of the entrusting organ, and shall not entrust other administrative organs, organizations or individuals to carry out the investigation. Article
26 When investigating and dealing with monopoly agreements, provincial market supervision departments may consult with relevant provincial market supervision departments to assist in the investigation, and relevant provincial market supervision departments shall assist in the investigation. Article
27 Where the Anti-monopoly Law Enforcement Agency imposes an administrative penalty on a monopoly agreement, it shall, before making a decision on the administrative penalty, inform the party concerned in writing of the content, facts, reasons and basis of the administrative penalty to be imposed, and inform the party concerned of the right to state, the right to defend and the right to request a hearing according to law. Article
28 After informing the parties of the administrative penalty decision to be made, the Anti-monopoly Law Enforcement Agency shall fully listen to the opinions of the parties and review the facts, reasons and evidence put forward by the parties. Article
29 When the Anti-monopoly Law Enforcement Agency makes a decision on administrative penalty for a monopoly agreement, it shall make a written decision on administrative penalty according to law and affix its seal. The contents of a written decision of
administrative penalty shall include:
(1) the name, address and other basic information of the party;
(2) the source of the case and the course of the investigation;
(3) the facts and evidence of the violation of laws, regulations and rules;
(4) The acceptance of and reasons for the party's statement and defense;
(5) The content and basis of the administrative penalty;
(6) The method and time limit for the performance of the administrative penalty;
(7) The channel and time limit for applying for administrative reconsideration and instituting administrative litigation;
(8) The name of the anti-monopoly law enforcement agency that made the decision on administrative penalty and the date of making the decision. Article
30 Where the Anti-monopoly Law Enforcement Agency determines that the monopoly agreement under investigation falls under the circumstances specified in Article 20 of the Anti-monopoly Law, it shall terminate the investigation and make a decision to terminate the investigation. The decision to terminate the investigation shall specify the basic information of the agreement, the basis and reasons for the application of Article 20 of the Anti-monopoly Law, etc. After
the Anti-monopoly Law Enforcement Agency makes a decision to terminate the investigation, if the agreement under investigation no longer conforms to the provisions of Article 20 of the Anti-monopoly Law due to major changes in the circumstances, the Anti-monopoly Law Enforcement Agency shall carry out the investigation in accordance with the law. Article
31 During the period of investigation, the operator suspected of monopoly agreement may apply for suspension of investigation and promise to take specific measures to eliminate the impact of the act within the time limit approved by the anti-monopoly law enforcement agency. The application for
suspension of investigation shall be submitted in writing and signed and sealed by the person in charge of the operator. The written application shall contain the following items:
(1) the fact of the suspected monopoly agreement;
(2) the commitment to take specific measures to eliminate the consequences of the act;
(3) the time limit for fulfilling the commitment; and
(4) other contents that need to be committed. Article
32 The Anti-monopoly Law Enforcement Authority shall decide whether to suspend the investigation according to the application for suspension of the investigation by the business operator under investigation, taking into account the nature, duration, consequences, social impact of the act, the measures promised by the business operator and its expected results. After investigating and verifying the suspected monopoly agreement,
the anti-monopoly law enforcement agency shall not suspend the investigation if it considers that it constitutes a monopoly agreement, and shall make a decision to deal with it according to law. The anti-monopoly law enforcement agency shall not accept an application for suspension of investigation for a suspected monopoly agreement that
meets the requirements of Articles 8 to 10 of these Provisions. Article
33 Where the Anti-monopoly Law Enforcement Agency decides to suspend the investigation, it shall make a written decision on the suspension of the investigation. The decision to
suspend the investigation shall specify the fact that the operator under investigation is suspected of reaching a monopoly agreement, the specific content of the commitment, the specific measures to eliminate the impact, the time limit for fulfilling the commitment and the legal conse quences of failing to fulfill or fully fulfill the commitment. Article
34 Where a decision is made to suspend the investigation, the Anti-monopoly Law Enforcement Agency shall supervise the performance of the undertakings.
The undertakings shall report in writing the fulfillment of their commitments to the Anti-monopoly Law Enforcement Agency within the prescribed time limit. Article
35 Where the Anti-monopoly Law Enforcement Agency determines that the undertakings have been fulfilled, it may decide to terminate the investigation and make a written decision to terminate the investigation. The decision to
terminate the investigation shall specify the facts of the suspected monopoly agreement of the operator under investigation, the circumstances of the decision to suspend the investigation, the specific contents of the commitment, the fulfillment of the commitment, and the supervision.
In any of the following circumstances, the Anti-monopoly Law Enforcement Agency shall resume the investigation:
(1) The undertakings fail to perform or fail to fully perform their commitments;
(2) The facts on which the decision to suspend the investigation is based have undergone major changes;
(3) The decision to suspend the investigation is made on the basis of incomplete or untrue information provided by the operator.Article
36 Where an operator is suspected of violating these Provisions, the Anti-monopoly Law Enforcement Agency may interview its legal representative or person in charge.
The interview shall point out that the operator is suspected of reaching a monopoly agreement, listen to the explanation of the situation, conduct a reminder conversation, and may ask him to propose improvement measures to eliminate the harmful consequences of the act.
Operators shall make improvements in accordance with the requirements of the Anti-monopoly Law Enforcement Agency, put forward specific measures to eliminate the harmful consequences of their actions, time limits for performance, and submit written reports. Article
37 Where a business operator reaches or organizes other business operators to reach a monopoly agreement, or provides substantive assistance to other business operators to reach a monopoly agreement, reports relevant information to the anti-monopoly law enforcement agency on its own initiative and provides important evidence, it may apply for a mitigated punishment or exemption from punishment according to law.
An operator shall file an application with the Anti-monopoly Law Enforcement Agency before the Anti-monopoly Law Enforcement Agency is notified of the administrative penalty.
The application materials shall include the following contents:
(1) a report on the relevant circumstances of the monopoly agreement, including but not limited to the operators participating in the monopoly agreement, the scope of commodities involved, the contents and methods of reaching the agreement, the specific implementation of the agreement, and whether to apply to other overseas law enforcement agencies;
(Two) important evidence of the conclusion or implementation of monopoly agreements. Important evidence refers to the evidence that the anti-monopoly law enforcement agencies have not yet grasped, which can play a key role in the investigation or the identification of monopoly agreements. Where the legal representative, the principal responsible person and the person directly responsible of the
business operator are personally liable for the conclusion of the monopoly agreement, the provisions of this Article shall apply. Article
38 Where a business operator files an application in accordance with Article 37 of these Provisions, the Anti-monopoly Law Enforcement Agency shall decide whether to mitigate or exempt the punishment according to the time sequence of the voluntary report of the business operator, the importance of the evidence provided and the relevant circumstances of the conclusion and implementation of the monopoly agreement. Article
39 The provincial market supervision department shall report to the General Administration of Market Supervision and accept the guidance and supervision of the General Administration of Market Supervision before making a decision not to impose administrative penalties, a decision to suspend investigations, a decision to resume investigations, a decision to terminate investigations or a notification of administrative penalties.
The provincial market supervision department shall file with the General Administration of Market Supervision within seven working days after serving the decision not to impose administrative penalty, the decision to suspend the investigation, the decision to resume the investigation, the decision to terminate the investigation or the decision to impose administrative penalty to the operator under investigation. Article
40 After the Anti-monopoly Law Enforcement Agency has made a decision on administrative handling, it shall announce it to the public in accordance with the law. Administrative penalty information shall be publicized to the public through the national enterprise credit information publicity system according to law. Article
41 The General Administration of Market Supervision shall strengthen the guidance and supervision of provincial market supervision departments in investigating and dealing with monopoly agreements, and unify law enforcement procedures and standards.
Provincial market supervision departments shall investigate and deal with monopoly agreement cases in strict accordance with the relevant provisions of the General Administration of Market Supervision. Article
42 Where an operator, in violation of these Provisions, reaches and implements a monopoly agreement, the Anti-monopoly Law Enforcement Agency shall order it to stop its illegal activities, confiscate its illegal income and impose a fine of not less than 1% but not more than 10% of its sales in the previous year. If there is no sales in the previous year, a fine of not more than 5 million yuan shall be imposed; If the monopoly agreement reached has not been implemented, a fine of less than three million yuan may be imposed. If the legal representative, the principal responsible person and the person directly responsible of the
business operator are personally liable for the conclusion of the monopoly agreement, a fine of less than one million yuan may be imposed. Article
43 Where an operator organizes other operators to reach a monopoly agreement or provides substantive assistance to other operators to reach a monopoly agreement, the provisions of Article 42 of these Provisions shall apply. Article
44 Where a trade association, in violation of these Provisions, organizes the operators of the trade to reach a monopoly agreement, the Anti-monopoly Law Enforcement Agency shall order it to make corrections and may impose a fine of less than three million yuan. If the circumstances are serious, the Anti-monopoly Law Enforcement Agency may request the registration administration organ of social organizations to cancel the registration according to law. Article
45 When determining the specific amount of fine, the Anti-monopoly Enforcement Authority shall consider such factors as the nature, extent, duration of the illegal act and the elimination of the consequences of the illegal act. In case of
violation of these Provisions, if the circumstances are particularly serious, the impact is particularly bad and the consequences are particularly serious, the General Administration of Market Supervision may determine the specific amount of fines at least twice and less than five times the amount of fines prescribed in Articles 42, 43 and 44 of these Provisions. Article
46 Where an operator reaches a monopoly agreement due to the abuse of administrative power by administrative organs and organizations authorized by laws and regulations with the functions of managing public affairs, it shall be dealt with in accordance with Articles 42, 43, 44 and 45 of these Provisions. Operators who can prove that they are authorized by administrative organs and organizations authorized by laws and regulations to manage public affairs to abuse their administrative power to force or disguise them to reach monopoly agreements may be given lighter or mitigated punishment according to law. Article
47 Where an operator voluntarily reports to the Anti-monopoly Law Enforcement Agency the relevant information on the conclusion of a monopoly agreement and provides important evidence in accordance with Article 37 of these Provisions, the Anti-monopoly Law Enforcement Agency may mitigate or exempt its punishment according to the following ranges: The Anti-monopoly Law Enforcement Agency may waive the penalty or reduce the penalty to an extent of not less than 80%; for the second applicant, the penalty may be reduced to an extent of 30 to 50%; for the third applicant, the penalty may be reduced to an extent of 20 to 30%. The anti-monopoly law enforcement agency shall not exempt from punishment those who play a major role in the conclusion of
monopoly agreements, or coerce other operators to participate in the conclusion and implementation of monopoly agreements, or hinder other operators from stopping the illegal act. Where the legal representative, principal responsible person and the person directly responsible of the business operator who are
personally liable voluntarily report to the Anti-monopoly Law Enforcement Agency the relevant information on the conclusion of the monopoly agreement and provide important evidence in accordance with Article 37 of these Provisions, the Anti-monopoly Law Enforcement Agency may mitigate the punishment by 50% or exempt him from punishment. Article
48 Any staff member of the Anti-monopoly Law Enforcement Agency who abuses his power, neglects his duty, engages in malpractices for personal gain or divulges business secrets, personal privacy and personal information known in the course of law enforcement shall be dealt with in accordance with the relevant provisions. Article
49 During the investigation, the Anti-monopoly Law Enforcement Agency shall transfer the clues of suspected duty violations and duty crimes of public officials to the disciplinary inspection and supervision organs in a timely manner. Article
50 Where these Provisions do not provide for the procedures for investigation and punishment of monopoly agreements, they shall be implemented in accordance with the Provisions on Procedures for Administrative Punishment of Market Supervision and Administration, except for the provisions on time limit, filing of cases and jurisdiction of cases. Where
an anti-monopoly law enforcement agency organizes an administrative penalty hearing, it shall be implemented in accordance with the Measures for the Hearing of Administrative Penalties for Market Supervision and Administration. Article
51 These Provisions shall come into force on April 15, 2023. The Interim Provisions on the Prohibition of Monopoly Agreements promulgated by Decree No.10 of the State Administration of Market Supervision and Administration on June 26, 2019 shall be abolished at the same time.
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