China unveils new rules against monopolistic behaviors

21:38, January 04, 2011      

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China's competition law enforcement authorities Tuesday published new regulations to crack down on anticompetitive, monopolistic-type behavior, amid the country's efforts to ensure competitive markets.

The regulations against monopolistic-pricing will take effect from Feb. 1, a National Development and Reform Commission (NDRC) statement said.

China implemented its first anti-monopoly law on Aug. 1, 2008.

As China's top economic planner, the NDRC has authority over industrial policy, economic planning and enforcement of competition law.

Conduct that infringes upon competition law has increased in some industries and regions, the NDRC statement said.

The new rules prohibit price-fixing. Moreover, players who have a dominant market share are banned from selling products at unfairly high prices or buying products at unfairly low prices, according to the new rules.

A single party who has more than half of a market's share is considered dominant.

Two parties who have more than two thirds of a market's share are also considered dominant.

Three parties whose market shares exceed three-fourths are also considered dominant.

The regulations apply to cases of price monopoly both inside and outside China, when monopoly prices outside the country impact the domestic market, according to the NDRC.

Those who violate the regulations will be punished according to the country's anti-monopoly law, according to the commission.

For punishment, individual retailers and producers may face confiscation of illegal earnings and a fine of up to 10 percent of the previous year's sales.

Industry associations, meanwhile, are subject to a fine of no more than 500,000 yuan (about 75,500 U.S. dollars) or dismissal as an association.

Many of China's state-owned enterprises -- such as oil giants PetroChina, Sinopec and CNOOC -- and telecommunications companies -- China Mobile and China Unicom -- are criticized for their dominant market positions.

In China, the government determines the price consumers pay for goods and services in such monopoly-type industries.

Source: Xinhua
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