Page 7 - The South China Business Journal

share and turnover in the same relevant market must However, if the Anti-Monopoly Law
be calculated together. Enforcement Agency 昀椀nds that the decision not
to launch an investigation or to terminate an
However, the article also stipulates that if there existing investigation is based on incomplete or
is evidence that the agreement has the effect of untrue information provided by the company,
excluding or restricting competition, the prohibition or if the facts that informed the decision
will remain in place. have changed signi昀椀cantly, it will conduct an
investigation into the agreement as otherwise
APPLYING FOR THE SAFE HARBOR required by law.
EXCEPTION
IMPACT ON COMPANIES
The draft revision adds a new article clarifying the
procedures for companies to apply for the exception If passed in its current form, the draft revision
to the prohibition on monopoly agreements. to the Provisions will help to protect smaller
companies that have limited scope to impact
The new Article 18 of the Provisions stipulates that if a competition from being the subject of antitrust
company can prove that its market share falls below investigations, and thereby also from facing
the set thresholds, it must submit a written application hefty penalties.
to the Anti-Monopoly Law Enforcement Agency.
Under the AML, companies found to have
The following materials must be provided: illegally entered into monopoly agreements
will be ordered to cease the illegal activity and
1. Relevant information on the conclusion and are liable for a 昀椀ne of between 1 percent and
implementation of the agreement between the 10 percent of the company’s previous years’
company and its counterparty; sales revenue. If the company did not have
any sales revenue in the previous year, it will
2. The equity structure and control relationship instead be given a 昀椀ne of up to RMB 5 million
between the company and its counterparty, and the (US$696,310), or, if the monopoly agreement
operating conditions in the relevant markets; that it had illegally entered into has not yet
been implemented, a 昀椀ne of up to RMB 3 million
3. The annual market share and annual turnover (US$417,786).
of the company and the counterparty during the
agreement period. The application must also include Moreover, if the legal representative, principal
the basis for calculation; and person in charge, or person directly responsible
for the company is personally responsible for
4. Other materials that can prove that the operator meets reaching a monopoly agreement, they may be
the set market share requirements and conditions. 昀椀ned up to RMB 1 million (US$139,262).

If, after reviewing the materials submitted by the By better calibrating enforcement to re昀氀ect
company, the Anti-Monopoly Law Enforcement the actual competitive impact of a company’s
Agency 昀椀nds that the agreement meets the conduct, the revised Provisions will reduce
requirements of the safe harbor provisions, it will undue regulatory burdens on small and
not 昀椀le a case for investigation into the agreement. medium-sized enterprises, while ensuring
If the Anti-Monopoly Law Enforcement Agency has that enforcement remains focused on larger
already 昀椀led a case before receiving the application, market players capable of engaging in serious
it will terminate the investigation. monopolistic behavior.

SOUTH CHINA BUSINESS JOURNAL 4