The anti-monopoly law is amended for the first time after 13 years to provide institutional guarantees to prevent the disorderly expansion of capital
The key to strengthening anti-monopoly supervision
Our reporter Han Yadong and Li Yunshu
The "Anti-Monopoly Law of the People's Republic of China (Draft Amendment)" is soliciting opinions from the public on the China National People's Congress website.
Prior to this, the 31st Meeting of the Standing Committee of the 13th National People's Congress reviewed the Anti-Monopoly Law of the People's Republic of China (Draft Amendment).
China's current anti-monopoly law was passed on August 30, 2007, and came into force on August 1, 2008.
This revision of the Anti-Monopoly Law insists on both standardization and development. In response to the outstanding problems in the implementation of the Anti-Monopoly Law, we will further improve the anti-monopoly system and increase the penalties for monopolistic behaviors, so as to strengthen anti-monopoly and prevent the disorderly expansion of capital. Clearer legal basis and stronger institutional guarantees.
After 13 years, why amend the anti-monopoly law?
Based on the new development stage, implementing the new development concept, building a new development pattern, and promoting high-quality development, what challenges are facing anti-monopoly supervision and enforcement, and what changes will this amendment bring?
The reporter interviewed Sun Jin, a professor and doctoral supervisor of Wuhan University Law School, and director of the Center for Competition Law and Policy Research.
Monopoly is the main enemy of the market economy. The regulation of monopoly behavior through competition law, especially the anti-monopoly law, through legislation, enforcement, and justice is the standard in market economy countries.
Question: The anti-monopoly law has a high status in the economic field. What is its legislative significance?
Sun Jin: Monopoly, restricted competition and unfair competition are the enemies of the market economy.
It is a common practice in market economy countries to regulate monopoly, restrictive competition, and unfair competition through the legislation, enforcement, and justice of competition law, especially anti-monopoly law.
Legislation is not only a prerequisite for law enforcement and justice, but also has a clear guidance and normative effect on the compliance and legal operation of enterprises.
Negative evaluations and prohibitive provisions on various monopolistic behaviors in the market through anti-monopoly law legislation are standard for countries that implement market economies.
China's market economy was born out of a planned economy and has undergone decades of arduous system and mechanism transformation. The legislation of the anti-monopoly law is of great significance.
Question: After 13 years, why amend the anti-monopoly law?
Sun Jin: When China's current anti-monopoly law was enacted in 2007, it was based on traditional anti-monopoly theories and legislative experience in the era of industrial civilization.
Since the implementation of this law, China's digital economy has developed rapidly. As a new market entity, digital platforms have produced many new business models and restricted competition, which have brought huge challenges to the current anti-monopoly rules and their enforcement and justice.
Generally speaking, in the current anti-monopoly law, there are problems such as relatively principled regulations on relevant systems, insufficient penalties for some monopolistic behaviors, and the need for further improvement of the law enforcement system, which can no longer fully meet current and future needs.
All these require the anti-monopoly law to keep pace with the times and amend it in a timely manner.
The legislation of "small steps and fast walking" not only provides rules and guidelines for the practice of anti-monopoly law enforcement, but also provides system exploration and experience accumulation for the amendment of the anti-monopoly law.
Question: In recent years, regulatory authorities have frequently taken actions, and many platform companies have been punished heavily or filed investigations.
Has there been any progress in the level of anti-monopoly enforcement?
Have some effective law enforcement practices been summarized and refined into law enforcement rules in the revised draft?
Sun Jin: Good laws and good governance guarantee the healthy development of new business forms and new models, which are applicable to China's digital platform anti-monopoly, and need to be persisted for a long time now and in the future.
China is currently strengthening anti-monopoly supervision in the field of digital economy where monopoly problems are more serious and complex. Many platform companies have been punished with heavy fines or filed investigations, indicating that strengthening anti-monopoly supervision has become the norm.
In this process, China's law enforcement agencies are willing to be proactive in law enforcement, have more and more experience, and steadily improve their capabilities. At the same time, they are paying more and more attention to upgrading the experience accumulated in law enforcement practice into departmental regulations and regulatory documents.
In June 2019, the State Administration for Market Regulation formulated and promulgated the "Interim Regulations on Prohibition of Monopoly Agreements" and other three important supporting regulations of the anti-monopoly law. In October 2020, the "Interim Regulations on the Review of Concentration of Undertakings" was promulgated, and some regulations were out of date. The content is revised.
These "small steps and fast" legislation not only provides rules and guidelines for the practice of anti-monopoly law enforcement, but also provides system exploration and experience accumulation for the amendment of the anti-monopoly law.
Especially in February 2021, the Anti-Monopoly Commission of the State Council formulated and issued the "Guidelines for Anti-Monopoly in the Field of Platform Economy", which has accumulated experience for this amendment to add anti-monopoly rules on digital platforms.
For example, the draft amendment stipulates that "operators shall not abuse data and algorithms, technology, capital advantages, and platform rules to eliminate or restrict competition," summarizes anti-monopoly law enforcement practices, and realizes the advancement of anti-monopoly system construction.
Question: We must not only anti-economic monopoly, but also anti-administrative monopoly.
What new thinking and new measures does the draft amendment have to prevent abuse of administrative power to exclude and restrict competition?
Sun Jin: China’s market economy was born out of a planned economy and has undergone a long-term transformation. It has not only a common problem in market economy countries—economic monopoly, but also a special problem in transition countries—administrative monopoly. This determines that China’s anti-monopoly law not only requires To oppose economic monopoly, we must also oppose administrative monopoly that is intertwined with economic monopoly.
The fair competition review system is an institutional innovation that regulates administrative monopoly from the source in China. Taking the opportunity of this law amendment to "incorporate the system into the law" has become a major institutional highlight of the anti-monopoly law.
The revised draft adds "The state strengthens the basic position of competition policy" and "The state establishes and completes a fair competition review system" in the general provisions. It is intended to incorporate the fair competition review system into the antitrust law, which is conducive to the formation of systemic force and realizes fair competition review. The rule of law and rigid constraints of the system have made the administrative monopoly regulatory system in the anti-monopoly law more complete. It has realized the entire process of supervision of the prohibitive supervision of administrative monopoly behaviors during and after the fact to the pre-prevention, during and after the prohibition, from soft Sexual restraint rises to rigid restraint.
Increasing penalties for actions that cause serious consequences of monopoly is the global development trend of anti-monopoly law
Question: This revision of the Anti-Monopoly Law has substantially increased the amount of fines for related violations, and implemented a "double penalty system" for monopolistic activities, that is, not only penalizing the unit, but also the relevant person in charge.
What is the significance of these measures?
Sun Jin: In recent years, the European Union has repeatedly imposed antitrust penalties on American digital platform giants such as Apple, Amazon, and Google. The fines of more than one billion euros are not too low. However, these giants still go their own way after paying the tickets. Compared with the huge benefits of monopolistic behavior, monopoly penalties are obviously insufficient in deterrence.
Increasing penalties for actions that cause serious consequences of monopoly is the common voice and institutional choice of many countries and regions, and in a sense, it has become a global development trend of anti-monopoly law.
Today, China has become the world's second largest economy. To achieve high-quality development from "big" to "strong" and innovation-driven, the need for fair competition in the market is stronger than ever.
By strengthening the authority and deterrence of the anti-monopoly law, removing obstacles to market competition, restricting operators from pursuing monopoly profits, promoting the free flow of factors and optimizing the efficiency of resource allocation, it can provide for the construction of a new development pattern, the promotion of high-quality development, and the realization of common prosperity. System guarantee.
Question: The draft amendment proposes the establishment of a "safe harbor" system and the establishment of a "stop clock" system for the review period of concentrated undertakings. What are the main considerations for the creation of these systems?
Sun Jin: The draft amendment proposes to add the establishment of a "safe harbor" system, which stipulates that operators who have reached a monopoly agreement can prove that their market share in the relevant market is lower than the standard set by the Anti-monopoly Law Enforcement Agency of the State Council, which is not prohibited in principle; The “stop bell” system for the review period for the concentration of undertakings stipulates that the review work cannot be carried out due to the failure of the undertakings to submit documents or materials in accordance with the regulations, and there are new situations that have a significant impact on the review of concentration of undertakings, and new facts need to be verified, etc. The Anti-monopoly Law Enforcement Agency of the State Council may decide to suspend the review period for calculating the concentration of undertakings.
These regulations should be said to be more scientific and reasonable, in line with the complexity of the market economy, and able to meet the needs of balancing market entities to become bigger, stronger and better, and to prevent irrational market structures, especially the objective needs of innovative development of the digital economy and dynamic competition. It embodies the concept of revising the law that encourages the normal development of enterprises and standard operations, and combines general principles with exceptions, and can enhance the flexibility, practicability and scientificity of rule design.
Anti-monopoly supervision treats any monopolistic behavior of any company equally, and is by no means specifically targeted at digital platform companies
Question: The anti-monopoly of the platform economy has recently launched a series of "combined punches", which has aroused widespread public concern.
What is the relationship between the platform economy and antitrust?
Sun Jin: Compared with the traditional economy and traditional enterprises, the digital economy and digital platforms have obvious characteristics such as bilateral market attributes, network effects, lock-in effects, disruptive innovations, and strong competitive dynamics, which directly or indirectly shape the basics of digital platform monopoly. Attributes.
First, data has become a key element of platform competition, and data blockade under the platform oligopoly pattern can easily cause entry barriers. Second, the dynamic nature of platform competition is more pronounced. Subversive and disruptive innovations make platforms always face fierce competitive pressures and tend to be more inclined. By adopting technical means such as establishing entry barriers; once again, platform cross-industry competition is becoming more and more common, and platforms can quickly enter adjacent areas through subsidies at lower costs to carry out cross-industry competition, and there are almost no time and space restrictions on the expansion of cross-border business scale; "Take all" is a regular phenomenon of platform development, and strangling mergers and acquisitions have intensified market concentration. The coexistence and superposition of the two will inevitably exert double pressure on market competition.
Based on the above-mentioned characteristics of digital platform competition, platform companies, with the support of capital strength, data advantage, and rule-making power, use levers such as data, user traffic, and algorithmic power to leverage their share in various markets. The series monopolizes chaos.
The many new phenomena and problems that have arisen require more attention in supervision to whether large platforms hinder the entry of new institutions, use algorithms to achieve more covert collusion, refuse to open information that should be disclosed, and coerce or mislead users and consumers.
If supervision fails to keep up with the pace of development of the platform, leading to regulatory lag or even regulatory gaps, new problems will lead to the accumulation of hidden risks.
It should be recognized that, while promoting economic development, digital platforms have brought many severe challenges to maintaining the order of online and offline market competition and the sustained and healthy development of digital platforms.
The country's perfection and improvement of anti-monopoly rules and the enhancement of anti-monopoly supervision and strengthening of anti-monopoly law enforcement are the needs of the era for the healthy and sustainable development and high-quality development of China's socialist market economy. Any monopolistic behavior of any company is treated equally, and it is by no means specifically targeted at digital platform companies. .
Regulatory transformation and regulatory innovation are steadily advancing, and effective markets and effective governments complement each other. The unique advantages of China's system and the socialist market economic system will become more prominent
Question: In recent years, the industry authorities have been very active in anti-monopoly. How do you view this?
How can the market supervision department strengthen coordination and form a joint force with it?
What new ideas and regulations does the draft amendment have in this regard?
Sun Jin: An important feature of modern anti-monopoly supervision is to focus on supervision coordination and improve supervision efficiency.
In the digital economy, where cross-border competition has become the norm, the need for coordinated supervision is even stronger.
Anti-monopoly is a diversified and comprehensive regulatory system, and the anti-monopoly law is only one of many anti-monopoly tools.
Take the United States as an example. It has promulgated many competition policies to promote market opening and fair competition. In addition to the Department of Justice and the Federal Trade Commission, the Federal Reserve, the Department of Agriculture, the Department of Defense, and the Securities and Exchange Commission have antitrust powers and responsibilities.
In 2018, the establishment of the General Administration of Market Supervision and Administration in China will help solve the problem of cross-lateral government functions, build a unified market supervision and comprehensive law enforcement system, and resolve regulatory arbitrage and evasion behavior from the system design, disintegrate regulatory isolation and solidify departmental interests Barriers.
However, judging from the reality of cross-border competition and diversified operation of platform companies, this structure cannot be completely relied on to solve the problems of platform monopoly and disorderly expansion of capital. At least it is necessary to strengthen financial supervision and strengthen anti-monopoly law enforcement and even improve coordinated supervision of corporate governance.
In fact, digital platforms are not only involved in monopoly and financial risks, but also infringement of consumer rights and personal privacy, network security and many other issues, involving anti-monopoly supervision, financial supervision, industry and information, Internet information, justice, public security, etc. Functional departments, effective supervision depends on the coordination of all functional departments in the acquisition of evidence, information collection and other aspects.
Coordinated supervision meets the inherent requirements of the development of the digital economy.
In order to coordinate the anti-monopoly law enforcement work of the industry authorities and the market supervision department, the draft amendment stipulates that the market supervision and management department of the State Council is responsible for the unified anti-monopoly law enforcement work.
In other words, the market supervision and management department is in a leading and central position in the anti-monopoly law enforcement work.
For large-scale platforms with diversified cross-border operations, coordinated supervision should generally prioritize competition policies, and relevant regulatory authorities should work closely and multi-prongedly to establish a consultation mechanism to jointly determine policies, share information, and cooperate in law enforcement.
Question: The state's anti-monopoly measures on the platform economy reflect our institutional self-confidence and the unique advantages of the socialist market economic system.
How do you recognize this?
Sun Jin: With the in-depth development of the digital economy, the monopoly of digital platforms and the disorderly expansion of capital have emerged around the world, including China, which has become more and more intense in recent years.
How to effectively deal with it through anti-monopoly supervision is a very challenging problem for any country.
In the context of the global anti-monopoly on digital platforms, there is no existing experience in legislation and law enforcement for anti-monopoly supervision and prevention of disorderly expansion of capital to learn from. China needs to establish the concept of modesty and the principles of inclusive and prudent supervision, amend and improve anti-monopoly supervision rules, Upgrade the traditional supervision system.
China has issued the world’s first official digital platform anti-monopoly systemic legal document "Anti-monopoly Guidelines of the Anti-Monopoly Commission of the State Council on Platform Economy". The draft amendment to the Anti-Monopoly Law also adds digital competition rules and strengthens platform anti-monopoly supervision and control. It has become a consensus to prevent the disorderly expansion of capital.
Regulatory transformation and regulatory innovation are steadily advancing, and effective markets and effective governments will complement each other, and they will surely play a greater role in the future. The unique advantages of China's system and the socialist market economy will become more prominent.