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Anti-Monopoly Law Of China Amended – Cartels, Monopolies


Anti-monopoly Law of China was amended on June 24, 2022 by the
Standing Committee of the National People’s Congress and will
take effect on August 1, 2022. Highlights of the changes are listed
as follows.

Big Data Related Provisions

  1. Art.9: Business operators may not use data and algorithms,
    technology, capital advantages, platform rules, etc. to engage in
    monopolistic behaviors;

  2. Art.22.2: A business operator with a dominant market position
    shall not use data, algorithms, technologies, platform rules, etc.
    to engage in the abuse of a dominant market position as prescribed
    in the preceding paragraph.

Safe Harbor Provisions

Art.18: Business operators are prohibited from reaching the
following monopoly agreements with their counterparties:

(1) Fix the price of resale goods to
a third party;

(2) Limit the minimum price for
resale of goods to third parties;

(3) Other monopoly agreements
identified by the anti-monopoly law enforcement agency of the State
Council.

The agreements specified in items 1 and 2 of the preceding
paragraph shall not be prohibited if the business operator can
prove that it does not have the effect of eliminating or
restricting competition

Business operators who can prove that their market share in the
relevant market is lower than the standards set by the
anti-monopoly law enforcement agency of the State Council and meet
other conditions set by the anti-monopoly law enforcement agency of
the State Council shall not be prohibited..

Legal Liabilities

Art.56: If a business operator violates the provisions of this
Law by reaching and implementing a monopoly agreement, the
anti-monopoly law enforcement agency shall order it to stop the
illegal act, confiscate the illegal income, and impose a fine of
not less than 1% but not more than 10% of the previous year’s
sales. If there is no sales in the previous year, a fine of not
more than CNY 5 million shall be imposed; if the monopoly agreement
reached has not been implemented, a fine of not more than CNY 3
million may be imposed. If the legal representative, main
responsible person and directly responsible personnel of the
operator are personally responsible for reaching a monopoly
agreement, a fine of not more than CNY 1 million may be
imposed.

Where a business operator organizes other operators to reach a
monopoly agreement or provides substantial assistance for other
operators to reach a monopoly agreement, the provisions of the
preceding paragraph shall apply.

Where a business operator voluntarily reports the relevant
situation of reaching a monopoly agreement to the anti-monopoly law
enforcement agency and provides important evidence, the
anti-monopoly law enforcement agency may reduce or exempt the
punishment of the business operator as appropriate.

If an industry association violates the provisions of this Law
and organizes the operators of the industry to reach a monopoly
agreement, the anti-monopoly law enforcement agency shall order it
to make corrections, and may impose a fine of not more than CNY 3
million; if the circumstances are serious, the social organization
registration authority may revoke the registration according to
law.

Art.57: [unchanged] If a business operator violates the
provisions of this Law and abuses its dominant market position, the
anti-monopoly law enforcement agency shall order it to stop the
illegal act, confiscate the illegal income, and impose a fine of
not less than 1% but not more than 10% of the previous year’s
sales.

Art.58: Where a business operator conducts concentration in
violation of the provisions of this Law, and has or may have the
effect of eliminating or restricting competition, the anti-monopoly
law enforcement agency of the State Council shall order it to stop
the concentration, dispose of shares or assets within a time limit,
transfer business within a time limit, and take other necessary
measures to restore to the state before the concentration, and
impose a fine of not more than 10% of the sales of the previous
year; if the effect of eliminating or restricting competition is
not obtained, a fine of not more than CNY 5 million shall be
imposed.

Art.62: In the review and investigation conducted by the
anti-monopoly law enforcement agency according to law, those who
refuse to provide relevant materials and information, or provide
false materials or information, or conceal, destroy, or transfer
evidence, or have other acts of refusing or obstructing the
investigation, the anti-monopoly law enforcement agency shall order
it to make corrections and impose a fine of not more than 1% of the
previous year’s sales; if there is no sales in the previous
year or the sales are difficult to calculate, a fine of not more
than CNY 5 million shall be imposed; the individual shall be
imposed a fine of not more than CNY 500,000.

Art.63 Where the provisions of this Law are violated, the
circumstances are particularly serious, the impact is particularly
bad, and the consequences are particularly serious, the
anti-monopoly law enforcement agency of the State Council may
determine a specific amount of fine of not less than two times but
not more than five times the amount of the fine as stipulated in
Articles 56, 57, 58 and of this Law.

http://www.npc.gov.cn/npc/c30834/202206/e42c256faf7049449cdfaabf374a3595.shtml

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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