Provisions on the Prohibition of Monopoly Agreements
Provisions on the Prohibition of Monopoly Agreements
Provisions on the Prohibition of Monopoly Agreements
Order of the State Administration for Market Regulation No.65
March 10, 2023
Article 1 These Provisions are enacted in accordance with the Anti-Monopoly Law of the People's Republic of China (the "Anti-Monopoly Law") to prevent and stop monopoly agreements.
Article 2 The State Administration for Market Regulation (the "SAMR") is in charge of centralized anti-monopoly law enforcement related to monopoly agreements.
The SAMR authorizes, under the second paragraph of Article 13 of the Anti-Monopoly Law, the market regulatory authority of a province, autonomous region, or municipality directly under the Central Government (the "provincial market regulatory authority") to be in charge of the anti-monopoly law enforcement related to monopoly agreements within its own administrative jurisdiction.
For the purposes of these Provisions, the term “anti-monopoly law enforcement agency” include the SAMR and provincial market regulatory authorities (the “Anti-Monopoly Law Enforcement Agency”).
Article 3 The SAMR is in charge of investigating and punishing the following monopoly agreements:
(1) agreements executed across provincial-level jurisdictions, including provinces, autonomous regions, and municipalities directly under the Central Government;
(2) agreements involving circumstances that are more complicated or have significant impact nationwide; and
(3) agreements that the SAMR consider necessary to directly investigate and punish.
For an monopoly agreement listed in the preceding paragraph, the SAMR may designate a provincial market regulatory authority to investigate and punish it.
If, when investigating or punishing a monopoly agreement as authorized, a provincial market regulatory authority finds that such agreement is outside the scope of its purview or within the scope of its purview but necessary for the SAMR to investigate and punish it, the provincial market regulatory authority shall promptly report the situation to the SAMR.
Article 4 The Anti-Monopoly Law Enforcement Agency shall treat all business operators equally when investigating and punishing monopoly agreements.
Article 5 A monopoly agreement refers to any agreement, decision, or other concerted action to exclude or restrict competition.
An agreement or decision can be in written, oral, or other forms.
Other concerted action refers to any coordinated and uniform action substantially existing between business operators, even without any clear agreement or decision.
Article 6 To identify other coordinated action, the following factors shall be considered:
(1) whether there is uniformity of market action between the business operators;
(2) whether there is any communication of intent or exchange of information between the business operators;
(3) whether the business operators can reasonably explain the uniformity of their action; and
(4) the market structure, competition status, market changes, and other situations of the relevant market.
Article 7 Relevant market refers to a product or geographic scope in which business operators compete regarding a particular product or service (hereinafter collectively referred to as “product”) over a certain period of time, which includes both relevant product market and relevant geographic market.
To define a relevant market, a demand substitutability analysis shall be performed from the perspective of the demanders. Supply substitutability shall also be considered if the competitive constraints generated by supply substitutability on the action of business operators are similar to those generated by demand substitutability.
To define a relevant product market, from the perspective of demand substitutability, factors such as the response of the demanders to changes in product prices, and the characteristics, uses and sales channels of the product, may be considered, and from the perspective of supply substitutability, factors such as the degree of difficulty for other business operators to switch production and the market competitiveness of the product provided after the switch in production may be considered.
To define a relevant product market in the field of the platform economy, the relevant product market may be defined based on a one-sided product market involved in the platform, or based on the multi-sided product market involved in the platform, so that the platform as a whole may be defined as one relevant product market, or multiple relevant product markets may be defined separately while taking into account the mutual relationships and influences among them.
To define a relevant geographic market, from the perspective of demand substitutability, factors such as the characteristics of transportation and cost of the product, as well as any trade barrier with the actual area or region where a majority of demanders choose to buy the product, may be considered; and from the perspective of supply substitutability, factors such as the timeliness and feasibility of supplying the product by business operators in other geographic areas may be considered.
Article 8 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to fix or alter the price of a product:
(1) any agreement to fix or alter the price level, range of price fluctuations, or profit level, or the discounts, handling fees, or other fees;
(2) any agreement to adopt a standard formula, algorithm, platform rule, etc., for calculating prices;
(3) any agreement that restricts the right of the business operators participating in the agreement to set their own prices; and
(4) any agreement to otherwise fix or alter prices.
The term “business operators in competition with each other” include actual business operators who compete in the same relevant market, as well as potential business operators who may enter that relevant market to compete.
Article 8 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to limit the production volume or selling quantity of a product:
(1) any agreement to limit the production quantity of a product by such means as limiting or fixing the amount to be produced or stopping production, or to limit the production quantity of a particular variety or model of a product;
(2) any agreement to limit the selling quantity of a product by such means as limiting the quantity of the product on the market, or to limit the selling quantity of a particular variety or model of the product; or
(3) any agreement to otherwise limit the production quantity or selling quantity of a product.
Article 9 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to divide a sales market or a procurement market for a raw material:
(1) any agreement to divide any sales territories, market shares, sales targets, sales revenues, or sales profits of a product, or the selling categories, quantity, and time of a product;
(2) any agreement to divide any procuring territories, categories, quantity or time, or the suppliers of a raw materials such as a crude material, semi-finished product, component, or related equipment; or
(3) any agreement to otherwise divide a sales market or the procurement market for a raw material.
The preceding paragraph on the division of a sales market or a procurement market for a raw material also applies to the sales and procurement of data, technology, and services.
Article 11 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to restrict the purchase of any new technology or equipment or the development of any new technology or product:
(1) any agreement to restrict the purchase or use of any new technology or technique;
(2) any agreement to restrict the purchase, lease, or use of any new equipment or product;
(3) any agreement to restrict the investment in, research, or development of any new technology, technique, or product;
(4) any agreement to reject the use of any new technology, technique, equipment, or product; or
(5) any agreement to otherwise restrict the purchase of any new technology or equipment, or the development of any new technology or product.
Article 12 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to jointly boycott transactions:
(1) any agreement to jointly boycott the supply or sale of a product to any particular business operator;
(2) any agreement to jointly boycott the purchase of a product from, or sale of a product to, any particular business operator;
(3) any agreement to jointly restrict any particular business operator from transacting with business operators who are in competition with them; or
(4) any agreement to otherwise jointly boycott transactions.
Article 13 Business operators in competition with each other must not exploit any data, algorithms, technologies, platform rules, etc., to enter into a monopoly agreement specified in Articles 8 through 12 of these Provisions by means such as any communication of intent, exchange of sensitive information, or concerted action.
Article 14 A business operator is prohibited from entering into the following monopoly agreements with a transaction counterparty regarding the price of a product:
(1) any agreement to fix the price level, range of price fluctuations, or profit level, or the discounts, handling fees, or other fees for the resale of a product to a third party;
(2) any agreement to limit the minimum price for the resale of a product to a third party, or to limit the minimum price for the resale of a product to a third party by such means as limiting the range of price fluctuations, profit level, discounts, handling fees, or other fees; or
(3) any agreement to otherwise fix the resale price or limit the minimum resale price of the product.
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Order of the State Administration for Market Regulation No.65
March 10, 2023
Article 1 These Provisions are enacted in accordance with the Anti-Monopoly Law of the People's Republic of China (the "Anti-Monopoly Law") to prevent and stop monopoly agreements.
Article 2 The State Administration for Market Regulation (the "SAMR") is in charge of centralized anti-monopoly law enforcement related to monopoly agreements.
The SAMR authorizes, under the second paragraph of Article 13 of the Anti-Monopoly Law, the market regulatory authority of a province, autonomous region, or municipality directly under the Central Government (the "provincial market regulatory authority") to be in charge of the anti-monopoly law enforcement related to monopoly agreements within its own administrative jurisdiction.
For the purposes of these Provisions, the term “anti-monopoly law enforcement agency” include the SAMR and provincial market regulatory authorities (the “Anti-Monopoly Law Enforcement Agency”).
Article 3 The SAMR is in charge of investigating and punishing the following monopoly agreements:
(1) agreements executed across provincial-level jurisdictions, including provinces, autonomous regions, and municipalities directly under the Central Government;
(2) agreements involving circumstances that are more complicated or have significant impact nationwide; and
(3) agreements that the SAMR consider necessary to directly investigate and punish.
For an monopoly agreement listed in the preceding paragraph, the SAMR may designate a provincial market regulatory authority to investigate and punish it.
If, when investigating or punishing a monopoly agreement as authorized, a provincial market regulatory authority finds that such agreement is outside the scope of its purview or within the scope of its purview but necessary for the SAMR to investigate and punish it, the provincial market regulatory authority shall promptly report the situation to the SAMR.
Article 4 The Anti-Monopoly Law Enforcement Agency shall treat all business operators equally when investigating and punishing monopoly agreements.
Article 5 A monopoly agreement refers to any agreement, decision, or other concerted action to exclude or restrict competition.
An agreement or decision can be in written, oral, or other forms.
Other concerted action refers to any coordinated and uniform action substantially existing between business operators, even without any clear agreement or decision.
Article 6 To identify other coordinated action, the following factors shall be considered:
(1) whether there is uniformity of market action between the business operators;
(2) whether there is any communication of intent or exchange of information between the business operators;
(3) whether the business operators can reasonably explain the uniformity of their action; and
(4) the market structure, competition status, market changes, and other situations of the relevant market.
Article 7 Relevant market refers to a product or geographic scope in which business operators compete regarding a particular product or service (hereinafter collectively referred to as “product”) over a certain period of time, which includes both relevant product market and relevant geographic market.
To define a relevant market, a demand substitutability analysis shall be performed from the perspective of the demanders. Supply substitutability shall also be considered if the competitive constraints generated by supply substitutability on the action of business operators are similar to those generated by demand substitutability.
To define a relevant product market, from the perspective of demand substitutability, factors such as the response of the demanders to changes in product prices, and the characteristics, uses and sales channels of the product, may be considered, and from the perspective of supply substitutability, factors such as the degree of difficulty for other business operators to switch production and the market competitiveness of the product provided after the switch in production may be considered.
To define a relevant product market in the field of the platform economy, the relevant product market may be defined based on a one-sided product market involved in the platform, or based on the multi-sided product market involved in the platform, so that the platform as a whole may be defined as one relevant product market, or multiple relevant product markets may be defined separately while taking into account the mutual relationships and influences among them.
To define a relevant geographic market, from the perspective of demand substitutability, factors such as the characteristics of transportation and cost of the product, as well as any trade barrier with the actual area or region where a majority of demanders choose to buy the product, may be considered; and from the perspective of supply substitutability, factors such as the timeliness and feasibility of supplying the product by business operators in other geographic areas may be considered.
Article 8 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to fix or alter the price of a product:
(1) any agreement to fix or alter the price level, range of price fluctuations, or profit level, or the discounts, handling fees, or other fees;
(2) any agreement to adopt a standard formula, algorithm, platform rule, etc., for calculating prices;
(3) any agreement that restricts the right of the business operators participating in the agreement to set their own prices; and
(4) any agreement to otherwise fix or alter prices.
The term “business operators in competition with each other” include actual business operators who compete in the same relevant market, as well as potential business operators who may enter that relevant market to compete.
Article 8 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to limit the production volume or selling quantity of a product:
(1) any agreement to limit the production quantity of a product by such means as limiting or fixing the amount to be produced or stopping production, or to limit the production quantity of a particular variety or model of a product;
(2) any agreement to limit the selling quantity of a product by such means as limiting the quantity of the product on the market, or to limit the selling quantity of a particular variety or model of the product; or
(3) any agreement to otherwise limit the production quantity or selling quantity of a product.
Article 9 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to divide a sales market or a procurement market for a raw material:
(1) any agreement to divide any sales territories, market shares, sales targets, sales revenues, or sales profits of a product, or the selling categories, quantity, and time of a product;
(2) any agreement to divide any procuring territories, categories, quantity or time, or the suppliers of a raw materials such as a crude material, semi-finished product, component, or related equipment; or
(3) any agreement to otherwise divide a sales market or the procurement market for a raw material.
The preceding paragraph on the division of a sales market or a procurement market for a raw material also applies to the sales and procurement of data, technology, and services.
Article 11 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to restrict the purchase of any new technology or equipment or the development of any new technology or product:
(1) any agreement to restrict the purchase or use of any new technology or technique;
(2) any agreement to restrict the purchase, lease, or use of any new equipment or product;
(3) any agreement to restrict the investment in, research, or development of any new technology, technique, or product;
(4) any agreement to reject the use of any new technology, technique, equipment, or product; or
(5) any agreement to otherwise restrict the purchase of any new technology or equipment, or the development of any new technology or product.
Article 12 Business operators in competition with each other are prohibited from entering into the following monopoly agreements to jointly boycott transactions:
(1) any agreement to jointly boycott the supply or sale of a product to any particular business operator;
(2) any agreement to jointly boycott the purchase of a product from, or sale of a product to, any particular business operator;
(3) any agreement to jointly restrict any particular business operator from transacting with business operators who are in competition with them; or
(4) any agreement to otherwise jointly boycott transactions.
Article 13 Business operators in competition with each other must not exploit any data, algorithms, technologies, platform rules, etc., to enter into a monopoly agreement specified in Articles 8 through 12 of these Provisions by means such as any communication of intent, exchange of sensitive information, or concerted action.
Article 14 A business operator is prohibited from entering into the following monopoly agreements with a transaction counterparty regarding the price of a product:
(1) any agreement to fix the price level, range of price fluctuations, or profit level, or the discounts, handling fees, or other fees for the resale of a product to a third party;
(2) any agreement to limit the minimum price for the resale of a product to a third party, or to limit the minimum price for the resale of a product to a third party by such means as limiting the range of price fluctuations, profit level, discounts, handling fees, or other fees; or
(3) any agreement to otherwise fix the resale price or limit the minimum resale price of the product.
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