When referring to the anti-monopoly authority in China, many first mention the Ministry of Commerce of the People’s Republic of China (MOFCOM). However, based on the provisions of the Anti-monopoly Law of the PRC (AML) and the power allocated by the State Council, the State Administration for Industry and Commerce (SAIC) will play a primary role in AML enforcement.
The aforementioned questions why people link the AML authority with MOFCOM; a primary reason comes to light.
Prior to the promulgation of the AML, the first regulation to address anti-monopoly issues was The Interim Provisions on the Takeover of Domestic Enterprises by Foreign Investors (Interim Provisions). Within the framework of the Interim Provisions, MOFCOM will accept, investigate and decide the notification regarding a concentration, with SAIC. In practice, MOFCOM played a prevailing role in determining a concentration. Typically, MOFCOM frequently exchanges information with foreign counterparts, including the FTC, MOJ and the European Commission. Therefore, MOFCOM has a large responsibility over foreign investment, inbound and outbound trade, ect., and such responsibility easily allows the public to link MOFCOM with the enforcement of the AML This is especially true due to the most prominent misunderstanding that the AML shall primarily focus on the actions of foreign entities.
After studying the AML carefully, you should begin to recognize that SAIC will act as the indispensable and fundamental AML regulatory organization.
First, as per the power allocation regulation, SAIC retains responsibility over AML affairs related to monopoly agreement(s), abuse of dominance and administrative monopoly(s), though this excludes price-related monopoly behaviors.
The scope of monopoly agreement, abuse of dominance and administrative monopoly is so wide that almost every market power will fall within the grasp of the regulation. Price Fixing, restriction of output, market division, restriction of development and purchase of new technology/products, boycott(s), monopoly high prices above fair market levels, predatory pricing, refusal to trade, tie-in sales, discriminative treatments, etc., are typical monopoly agreements (cartels) and what would be categorized as an abuse of dominance. Thus, domestic and international giants must take caution when embarking upon specific market strategies.
Secondly, triggering SAIC action lies in the hands of the general public. MOFCOM under normal circumstances cannot forwardly investigate monopoly behaviors except where a business operator is directly involved in a concentration, or where they are notified of the presence of a concentration. For SAIC, the initiation of investigation proceedings is triggered by wider sources, including claims from the public, information forwarded by administrative departments and other SAIC information channels. Presently in China, the public including consumers are generally unsatisfied with the presence of monopoly powers and market dominators; this tendency will in turn provoke the action of SAIC.