China antitrust: Beijing’s new rule book raises the bar for what counts as a monopoly
- The final version of China’s new antitrust guidelines came into effect on Sunday
- It comes at a time when some of the country’s largest and most influential technology companies are embroiled in various anti-monopoly issues
They said those revisions in the guidelines, which came into effect on Sunday, are rich in implications for how antitrust investigations and disputes in China will move forward.
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The newly established guidelines stipulate that the regulator must define “a relevant market”, or the area where a monopoly exists, in an antitrust investigation.
That is key to proving in an antitrust investigation or lawsuit that an internet platform has built up a dominant market position and misused this position. An internet platform will only be subject to regulatory or legal punishment if such a situation exists.
In the previous draft released in November, the State Administration for Market Regulation (SAMR) did not have to define a relevant market to call a monopoly in “special cases”. It provided regulators unrestrained power to label any company a monopoly.
The change closes a loophole that would have given the agency too much discretion on regulatory scrutiny of the internet sector, according to You Yunting, a senior partner at Shanghai DeBund Law Offices.
“If the relevant market cannot be defined in a case, then anti-monopoly laws can’t be applied,” You said. “It’s the obligation for law enforcement agencies to define a relevant market in a monopoly investigation.”