China will finish amending its antitrust law later this year to strengthen regulations on key sectors including the platform economy, medicine, healthcare and construction material industries.
Gan Lin, deputy minister of the State Administration for Market Regulation (SAMR) and head of the State Anti-Monopoly Bureau, said in a media briefing on Tuesday (April 26) that antitrust law amendments had been submitted to the National People’s Congress and would be passed within 2022.
Gan also said an annual report detailing the government’s anti-monopoly work for 2021 would soon be released. That will include various regulatory actions taken against Big Tech companies like Alibaba, Tencent, Meituan and others. Investors have dumped shares in the companies due to ongoing regulatory uncertainty.
Wang Xianlin, director of the Center for Competition Law and Policy of Shanghai Jiao Tong University, said the antitrust law should be further standardized so that the rules are more transparent and predictable for industry players to follow.
Wang said the government will likely further strengthen its anti-monopoly work in the platform economy, innovative technology and information safety sectors this year.
Beijing’s clampdown on internet giants started when the planned US$37 billion listing of Alibaba’s Ant Group, which owns China’s largest digital payment platform Alipay, was suspended in November 2020.
Last year, the Chinese government unveiled a series of new rules, including limitations on young online gamers’ playtime and guidelines to improve food deliverers’ workflows, to regulate the online economy sector.
On November 18, China’s State Anti-Monopoly Bureau was inaugurated in Beijing with a mandate to enhance trust-busting supervision nationwide.
Wang Yong, head of the Anti-Monopoly Commission of the State Council, warned against all forms of monopoly and unfair competition, as well as the disorderly expansion of capital, and urged efforts to protect the legitimate rights and interests of market entities and consumers.
Wang also emphasized the need to create a market environment favorable for fair competition and the healthy development of market entities.
Last November, the SAMR fined Alibaba, Tencent, Baidu and other companies for violating China’s antitrust law. It listed 43 separate violations, with some offenses dating back as far as 2012, and fined the companies 500,000 yuan for each case.
On January 5, the regulator fined Alibaba, Tencent, JD.com and Bilibili Inc 500,000 yuan for each for 13 merger deals they failed to report to authorities in advance in 2015.
On Tuesday, Gan said the SAMR had improved its antitrust law enforcement after the establishment of the anti-monopoly bureau.
She said the SAMR handled a total of 176 monopoly cases, 727 oligopoly cases, 8,563 unfair competition cases and 45,000 price-fixing cases last year, mainly targeting the internet, medicine, construction material, healthcare and utility sectors.
Gan said since last year, the SAMR had published three guidelines to promote fair competition among companies in the platform economy, medicine industries and overseas businesses.
She said the SAMR had already reviewed 244,000 new and 442,000 existing policy documents and corrected or abolished 11,200 of them to ensure they were consistent with the anti-trust law. She said the process was part of the country’s drive to build a “unified national market.”
On April 10, the Central Committee of the Communist Party of China (CPC) and the State Council jointly released a key document titled “Opinions about accelerating the establishment of a unified national market” that prescribed new measures to break down local protectionism and other blockages that restrict local competition and consumption.
That includes alleged monopolistic behavior including high service fees at the China National Knowledge Infrastructure (CNKI), a research and information publishing institution led by Tsinghua University. A group of academics has recently called on the anti-monopoly bureau to investigate CNKI.
On April 8, an email issued by the National Science Library of the Chinese Academy of Sciences was widely circulated online in China. The National Science Library said it would consider stopping its subscription to CNKI’s services and use alternatives such as Chongqing VIP Information and Wanfang Data Knowledge Service Platform.
It said the CNKI had recently demanded a subscription renewal fee of nearly 10 million yuan (US$1.53 million) along with rigid rules on group users.
The 21st Century Business Herald reported on April 18 that Peking University stopped subscribing to CNKI’s services in 2016 due to high fees. It said Jimei University also canceled its subscription in January 2021 for the same reason.
Jet Deng, co-chair of Dentons China Competition and Antitrust practice, was quoted as saying in the report that the CNKI could have violated Article 17 of the anti-monopoly law, which forbids people or companies from selling commodities at unfairly high prices or buying commodities at unfairly low prices by abusing their dominant market positions.
Jiao Tong University’s Wang Xianlin, who is also a member of an expert team of the Anti-Monopoly Commission of the State Council, told the media that it would take some time to prove the CNKI’s monopoly status and whether the institution had abused its dominant market position.
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