Provisions on the Prohibition of the Abuse of Dominant Market Position
Provisions on the Prohibition of the Abuse of Dominant Market Position
Provisions on the Prohibition of the Abuse of Dominant Market Position
Order of the State Administration for Market Regulation No. 66
March 10, 2023
Article 1 These Provisions are enacted in accordance with the Anti-Monopoly Law of the People's Republic of China (the "AML"), with the aim of preventing and curbing the abuse of a dominant market position.
Article 2 The State Administration for Market Regulation (the "SAMR") shall be responsible for the unified anti-monopoly law enforcement against the abuse of a dominant market position.
Subject to Paragraph 2 of Article 13 of the AML, the SAMR, authorizes the market regulatory authorities of the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government (the "provincial market regulatory authorities") to be responsible for anti-monopoly law enforcement against the abuse of a dominant market position within their respective administrative regions.
The anti-monopoly law enforcement agencies mentioned herein include the SAMR and provincial market regulatory authorities.
Article 3 The SAMR shall be responsible for investigating and punishing the following acts of abusing a dominant market position:
(i) those that occur across provinces, autonomous regions, or municipalities directly under the Central Government;
(ii) those that involve relatively complex circumstances or have significant national impacts; and
(iii) those that the SAMR deems necessary to investigate and handle the cases directly.
The SAMR may designate provincial market regulatory authorities to investigate and punish the acts of abusing a dominant market position listed in the preceding paragraph.
If a provincial market regulatory authority, authorized to investigate the abuse of a dominant market position, finds that the case falls outside its own jurisdiction or that it is within its jurisdiction but requires further investigation and punishment by the SAMR, it shall promptly report the matter to the SAMR.
Article 4 The anti-monopoly law enforcement agencies, when investigating and punishing the abuse of a dominant market position, shall treat all operators equally.
Article 5 The term "relevant market" refers to the range of products and geographical area in which operators compete for a particular product or service (collectively "products") during a certain period, including relevant product market and relevant geographical market.
In defining the relevant market, an analysis of demand substitution should be carried out from the perspective of demand side. If the competitive constraint on the behavior of the operator exerted by supply substitution is similar to that exerted by demand substitution, the supply substitution should also be considered.
In defining the relevant product market, factors such as the responses of consumers to changes in product prices, as well as the product characteristics, intended use, and sales channels should be considered from the perspective of demand substitution. From the perspective of supply substitution, factors such as the level of difficulty for other operators to switch production and the market competitiveness of products provided after the switch should be considered.
In defining the relevant product market in the platform economy context, the relevant product market can be defined based on the products on one side of the platform, or the platform as a whole can be defined as a relevant product market based on the multi-sided products involved in the platform, or multiple relevant product markets can be defined separately while considering the relationships and influences among them.
In defining the relevant geographic market, from the perspective of demand substitution, factors such as the transportation features and costs of products, the actual areas where most customers choose the product, and trade barriers between areas should be considered. From the perspective of supply substitution, factors such as the timeliness and feasibility of the supply of products by other operators in different areas should be considered.
Article 6 The term "dominant market position" refers to a market position where an operator has the ability to control the product prices, quantities, or other trading conditions, or the ability to hinder or affect the entry of other operators into the relevant market.
The term "other trading conditions" mentioned in this Article refers to factors, other than product prices and quantities, that can have a substantial impact on market transactions. These factors include product varieties, product quality, payment terms, delivery methods, after-sales service, transaction options, technical constraints, among others.
The term "the ability to hinder or affect other operators from entering the relevant market" mentioned in this Article includes excluding other operators from entering the relevant market, or delaying the entry of other operators into the relevant market within a reasonable time, or causing the entry cost for other operators to significantly increase, thus making it impossible for them to engage in effective competition with existing operators.
Article 7 In determining the market share of an operator in the relevant market according to item (i) of Article 23 of the AML, the following factors may be considered: the specific product sales amount, sales volume, or other indicators of the operator in the relevant market during a certain period.
In analyzing the competition situation in the relevant market, the following factors may be considered: the development status of the relevant market, the number and market share of existing competitors, concentration of market, product differentiation, innovation and technological changes, sales and procurement models, and the situation of potential competitors.
Article 8 In determining the ability of an operator to control a sales market or a raw material procurement market in accordance with item (ii) of Article 23 of the AML, the following factors may be considered: the operator's ability to control the upstream and downstream markets of the industrial chain, its ability to control sales or procurement channels, its ability to influence or determine prices, volumes, contract term or other transaction conditions, and its ability to have prioritized access to the raw materials, semi-finished products, spare parts and related equipment essential for enterprises' production and operation and other resources that enterprises need to inject.
Article 9 In determining an operator's financial strength and technical conditions in accordance with item (iii) of Article 23 of the AML, the following factors may be considered: the operator's asset size, profitability, financing capability, R&D capability, technical equipment, capability of technology innovation and application, intellectual property rights it owns, as well as the way and degree by which the said financial strength and technical conditions can allow the said operator to expand business or consolidate or maintain its market position.
Article 10 In determining the degree of reliance of other operators on the operator in accordance with item (iv) of Article 23 of the AML, the following factors may be considered: the transaction relationship, transaction volume, duration of the transaction between other operators and the said operator, and the ease or difficulty of switching to other transaction counterparts within a reasonable time.
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Order of the State Administration for Market Regulation No. 66
March 10, 2023
Article 1 These Provisions are enacted in accordance with the Anti-Monopoly Law of the People's Republic of China (the "AML"), with the aim of preventing and curbing the abuse of a dominant market position.
Article 2 The State Administration for Market Regulation (the "SAMR") shall be responsible for the unified anti-monopoly law enforcement against the abuse of a dominant market position.
Subject to Paragraph 2 of Article 13 of the AML, the SAMR, authorizes the market regulatory authorities of the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government (the "provincial market regulatory authorities") to be responsible for anti-monopoly law enforcement against the abuse of a dominant market position within their respective administrative regions.
The anti-monopoly law enforcement agencies mentioned herein include the SAMR and provincial market regulatory authorities.
Article 3 The SAMR shall be responsible for investigating and punishing the following acts of abusing a dominant market position:
(i) those that occur across provinces, autonomous regions, or municipalities directly under the Central Government;
(ii) those that involve relatively complex circumstances or have significant national impacts; and
(iii) those that the SAMR deems necessary to investigate and handle the cases directly.
The SAMR may designate provincial market regulatory authorities to investigate and punish the acts of abusing a dominant market position listed in the preceding paragraph.
If a provincial market regulatory authority, authorized to investigate the abuse of a dominant market position, finds that the case falls outside its own jurisdiction or that it is within its jurisdiction but requires further investigation and punishment by the SAMR, it shall promptly report the matter to the SAMR.
Article 4 The anti-monopoly law enforcement agencies, when investigating and punishing the abuse of a dominant market position, shall treat all operators equally.
Article 5 The term "relevant market" refers to the range of products and geographical area in which operators compete for a particular product or service (collectively "products") during a certain period, including relevant product market and relevant geographical market.
In defining the relevant market, an analysis of demand substitution should be carried out from the perspective of demand side. If the competitive constraint on the behavior of the operator exerted by supply substitution is similar to that exerted by demand substitution, the supply substitution should also be considered.
In defining the relevant product market, factors such as the responses of consumers to changes in product prices, as well as the product characteristics, intended use, and sales channels should be considered from the perspective of demand substitution. From the perspective of supply substitution, factors such as the level of difficulty for other operators to switch production and the market competitiveness of products provided after the switch should be considered.
In defining the relevant product market in the platform economy context, the relevant product market can be defined based on the products on one side of the platform, or the platform as a whole can be defined as a relevant product market based on the multi-sided products involved in the platform, or multiple relevant product markets can be defined separately while considering the relationships and influences among them.
In defining the relevant geographic market, from the perspective of demand substitution, factors such as the transportation features and costs of products, the actual areas where most customers choose the product, and trade barriers between areas should be considered. From the perspective of supply substitution, factors such as the timeliness and feasibility of the supply of products by other operators in different areas should be considered.
Article 6 The term "dominant market position" refers to a market position where an operator has the ability to control the product prices, quantities, or other trading conditions, or the ability to hinder or affect the entry of other operators into the relevant market.
The term "other trading conditions" mentioned in this Article refers to factors, other than product prices and quantities, that can have a substantial impact on market transactions. These factors include product varieties, product quality, payment terms, delivery methods, after-sales service, transaction options, technical constraints, among others.
The term "the ability to hinder or affect other operators from entering the relevant market" mentioned in this Article includes excluding other operators from entering the relevant market, or delaying the entry of other operators into the relevant market within a reasonable time, or causing the entry cost for other operators to significantly increase, thus making it impossible for them to engage in effective competition with existing operators.
Article 7 In determining the market share of an operator in the relevant market according to item (i) of Article 23 of the AML, the following factors may be considered: the specific product sales amount, sales volume, or other indicators of the operator in the relevant market during a certain period.
In analyzing the competition situation in the relevant market, the following factors may be considered: the development status of the relevant market, the number and market share of existing competitors, concentration of market, product differentiation, innovation and technological changes, sales and procurement models, and the situation of potential competitors.
Article 8 In determining the ability of an operator to control a sales market or a raw material procurement market in accordance with item (ii) of Article 23 of the AML, the following factors may be considered: the operator's ability to control the upstream and downstream markets of the industrial chain, its ability to control sales or procurement channels, its ability to influence or determine prices, volumes, contract term or other transaction conditions, and its ability to have prioritized access to the raw materials, semi-finished products, spare parts and related equipment essential for enterprises' production and operation and other resources that enterprises need to inject.
Article 9 In determining an operator's financial strength and technical conditions in accordance with item (iii) of Article 23 of the AML, the following factors may be considered: the operator's asset size, profitability, financing capability, R&D capability, technical equipment, capability of technology innovation and application, intellectual property rights it owns, as well as the way and degree by which the said financial strength and technical conditions can allow the said operator to expand business or consolidate or maintain its market position.
Article 10 In determining the degree of reliance of other operators on the operator in accordance with item (iv) of Article 23 of the AML, the following factors may be considered: the transaction relationship, transaction volume, duration of the transaction between other operators and the said operator, and the ease or difficulty of switching to other transaction counterparts within a reasonable time.
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