After debates stretching back to the 1980s, China enacted its Antitrust Law on 30 August 2007. The Law will come into force on 1 August 2003. The Law is comprehensive in scope, covering restrictive agreements, abuse of dominance, and mergers. Indeed, ...
After debates stretching back to the 1980s, China enacted its Antitrust Law on 30 August 2007. The Law will come into force on 1 August 2003. The Law is comprehensive in scope, covering restrictive agreements, abuse of dominance, and mergers. Indeed, it goes beyond the scope of many antitrust laws by including important provisions to address anti-competitive administrative action. It also provides for a dedicated enforcement authority to be established, with significant penalties and remedies in the event of infringement.
The Law prohibits certain types of horizontal agreement (price fixing, supply restriction, market division, collusive boycotts) and one type of vertical agreement (resale price maintenance). The Law prohibits dominant undertakings from abusing their position in a number of specified ways (imposing unfair prices or other terms, selling be low cost, refusing to supply, discriminating between equivalent counterparties, tying). Also, M&A activity meeting certain thresholds (yet to be finalized) will be subject to requirements to make a filing with the enforcement authority.
The debates leading to the Law have been very controversial. It has potential to be hugely beneficial to China's future development. Nevertheless, there are a number of potential dangers. In this paper, I analysis contents of Chinese Antitrust Law and investigate its effects on foreign firms in china.