????????On the afternoon of June 25th, 2007, the 28th meeting of the 10th the National People’s Congress Standing Committee (NPCSC) reviewed the draft anti-monopoly law of the People’s Republic of China in groups, and the speeches were summarized as follows:
????????(A) on the monopoly agreement
????????Alex Chen (deputy to the National People’s Congress) said that it is proposed to amend Item 6 of Article 13: "Other monopoly agreements recognized by anti-monopoly law enforcement agencies" to "Other monopoly agreements that exclude or restrict competition". Because the original text excludes the due process of judicial review. It is suggested to add provisions on the application for exemption procedure after Chapter 2. Because there are no requirements for applying for exemption and application procedures in the draft, operators cannot judge the legality of their actions. We should let the law guide enterprises to declare independently, not just rely on government inspection, change the way of government control and save administrative costs.
????????Committee member Fang Xin said that Article 14 "prohibits business operators from reaching the following monopoly agreements with counterparties", including "fixing the lowest price for reselling goods to third parties". But in practice, this is a common practice for domestic and foreign enterprises. In order to maintain the brand image of the enterprise, the final market price will be limited in the sales contract, such as the market price of specialty stores and brand stores. Whether the current writing is too absolute, and whether the lowest price of goods sold by consignment or agency and the price limit between parent and subsidiary companies should be allowed can be reconsidered.
????????Member Nan Zhenzhong said that Article 15 (5) of the draft anti-monopoly law stipulates that "due to the economic downturn, in order to alleviate the serious decline in sales or the obvious surplus of production". "Economic depression" is very complicated, including global economic depression, national economic depression, regional economic depression, industrial economic depression and so on. It is suggested that the exact meaning and judgment standard of "economic recession" should be further clarified in order to make the exemption standard more clear.
????????(2) Abuse of dominant market position
????????Member Nan Zhenzhong said that Article 16 (2) of the draft anti-monopoly law stipulates that "goods are sold at a price lower than the cost without justifiable reasons;" It is suggested that "without justifiable reasons" be changed to "for the purpose of crowding out competitors". Because the standard without justifiable reasons is vague, and selling goods below the cost price to crowd out competition and then monopolize is a common means of abusing market dominance, this amendment makes this provision more targeted. Article 16 (5) of the draft anti-monopoly law stipulates that "tying goods or attaching other unreasonable trading conditions to transactions without justifiable reasons;" It is suggested that "without justifiable reasons" be changed to "against consumers’ wishes" and amended to "against consumers’ wishes, tying goods or attaching other unreasonable trading conditions to transactions;" Because the standard of no justifiable reason is vague, whether tying goods is legal should be judged by the wishes of consumers. The anti-monopoly law restricts the tying of goods against consumers’ wishes.
????????Ying Songnian (member of the Internal Affairs Judicial Committee of the National People’s Congress) said that Article 16, the legal responsibility for abusing market dominance lies in Article 46. If an operator abuses market dominance and excludes or restricts competition in violation of the provisions of this Law, it seems that the abuse of market dominance will bear legal responsibility only in the case of restriction and exclusion, but in fact, the abuse of market dominance mentioned in Article 16 is not just exclusion and restriction. I suggest that the legal liability of Article 46 should be further improved, and it should correspond to all kinds of situations mentioned in Chapter 3, Abuse of dominant market position, and have specific legal liabilities.
????????Committee member Fang Xin said that the first paragraph of Article 16 "sells goods at an unfairly high price or buys goods at an unfairly low price", and I think "unfair" is not very accurate. I suggest changing it to "sells goods at a significantly higher price than the market price or buys goods at a significantly lower price than the market price". The last few paragraphs all say "without justifiable reasons". I think if possible, it’s best to write clearly what we want to limit. For example, in paragraph 2, "without justifiable reasons" can be changed to "selling goods at a price below the cost for the purpose of excluding competitors". In paragraph 5, "without justifiable reasons" can be changed to "tying goods or attaching other unreasonable trading conditions when trading". Article 18, paragraphs 2 and 3 have two or three operators as a whole or three operators as a whole. I think "as a whole" is also a very vague concept. The key is to see if these two or three operators have a specific relationship. If there is a specific relationship, it should be restricted. If there is no specific relationship, how can it be regarded as a whole and it can be said that it has a dominant market position? It is suggested to stipulate whether there is a specific relationship.
????????Committee member Wang Weicheng said that regarding the abuse of market dominance in Article 16, it is suggested to add one item after the six items, namely, "the enterprise has acquired advanced technology, which is not used or not actually promoted", which also belongs to the abuse of market dominance. Enterprises have money, and this technology is beneficial to the country and the market, but it may be unfavorable to the main traditional business of the enterprise, which hinders technological progress.
????????Dai Songling (deputy to the National People’s Congress) said that the enterprises that abuse market dominance are mainly public enterprises, and the law should increase the punishment for these enterprises. For example, the water company forces users to buy their designated water supply equipment, and the gas company forces users to buy their designated gas stoves and water heaters. All kinds of information service fees imposed on users by communication departments when they buy mobile phones, such as caller ID, weather forecast, reading newspapers and so on. For these enterprises that abuse the dominant market position, we should increase the punishment, and at the same time give corresponding punishment to those responsible.??
????????Liu Qingfeng (deputy to the National People’s Congress) said that Article 16 of Chapter 3 talked about the abuse of market dominance, and I think it is very important to lead to the abuse of market dominance by market dominant operators. Article 5, tying goods without justifiable reasons, or attaching other unreasonable trading conditions, has something to do with what I mentioned above, but it is not exactly the same. Tying goods means selling another kind of goods that we already have, hoping to bundle them together, but when our industry faces transnational competition, some situations are more serious than this. I suggest adding "bundling other commodities or giving other commodities free of charge among commodities in a dominant market position without justifiable reasons, which seriously affects the market order of bundled commodities or giving other commodities free of charge". For example, if the operating system provided by Microsoft is to regard intelligent voice technology as an inseparable part of the operating system, this is malicious binding, rather than the general concept of goods. In addition, if it is not an integral part of the operating system, but it is given away for free when the operating system is sold, this is a hitchhiking. It will have a serious impact on the national voice industry. Therefore, it is suggested that this issue be further clarified, otherwise, the development of our national intelligent software will always face huge monopoly risks.
????????Alex Chen (deputy to the National People’s Congress) said: First, it is suggested that the second paragraph of Article 18 be amended as follows: "In the cases specified in the first, second and third paragraphs, if an operator has evidence to the contrary to prove that it does not have a dominant market position, it should not be presumed that the operator has a dominant market position." The reasons are as follows: First, in most cases, operators with the market share specified in Article 18 generally have a dominant position in the market, but in some cases, it is wrong to make the above presumption, such as when the barriers to entry in the relevant market are low, or when the entry into the relevant market is short, or when the superior resources of the above operators are almost exhausted, or when the patent right is about to expire, and so on. Second, in this clause, the burden of proof is assigned to the operator, and the law enforcement agencies can save law enforcement resources according to this presumption, and also give the operator a chance to refute it to ensure that the presumption is fair and accurate. Two, it is suggested that the second paragraph of article sixteenth be amended as "operators shall not sell goods at a price lower than the operating cost for the purpose of excluding competitors". The reasons are as follows: First, the amendment is copied from Article 11 of the Anti-Unfair Competition Law, which will make the "two laws" consistent in regulating predatory pricing. Second, as far as predatory pricing is concerned, there is a dispute between "purpose" and "effect" in the practice and theory of anti-monopoly law. The United States uses the "effect" standard to determine whether it constitutes predatory pricing, that is, whether the operators with dominant market position can implement predatory pricing,And take the competitors out of the market and recover the losses suffered by predatory pricing or earn non-competitive profits as the standard. If the "cost" can be recovered, it will constitute predatory pricing. Australia, on the other hand, adopts the "purpose" standard, that is, as long as the operators with dominant market position abuse their dominant position and compete with competitors at a price lower than the cost price for the purpose of excluding competitors, it constitutes predatory pricing, regardless of whether the predators can recover the "cost" afterwards. Comparing the "purpose" and "effect" standards, the "purpose" standard is more effective in combating predatory pricing, more operable and more in line with the purpose of competition law. However, the "effect" standard will affect the enthusiasm of operators for competition, and it is difficult to distinguish between what is beneficial to competition and what is anti-competitive, because the effect of competition will hurt one side of competition. Moreover, before the predatory price war has an "effect", the plundered will not be able to stop the predatory behavior of the marauders, because it has not yet had an effect. If you can, you can only assume that the predator can recover the "cost" after excluding the prey. This assumption is obviously not conducive to competitive behavior. The "purpose" standard can make up for the defects of the "effect" standard in this respect. First of all, the "purpose" standard can prevent operators with dominant market position from abusing their dominant position. Secondly, the element of "market dominance" in predatory pricing can also play the role of "effect" standard, because only operators with market dominance can recover costs or obtain excess profits after the predatory price war.Therefore, we suggest making the above amendments to this clause. Third, it is suggested to delete the "financial resources" of the operator in Item 3 of Article 17, because such a provision may make the enterprise conceal its financial situation, and this is not a necessary condition for measuring monopoly ability.
????????(3) Concentration of business operators
????????Commissioner Li Lianning said that Chapter 4 deals with the substantive norms of concentration of business operators. Concentration of business operators is an important field of anti-monopoly. If a certain field is too concentrated, it is not conducive to competition. But at present, the expression of this chapter is basically a procedural norm. According to the truth, the procedural specification is based on the entity specification, to implement the entity specification concretely. In other words, we should first stipulate the entity norms for the concentration of operators, and then stipulate how to declare and review. According to the current regulations, such as Article 20, if the concentration of business operators meets the declaration standards set by the State Council, the business operators shall report to the anti-monopoly law enforcement agency in the State Council in advance, and the concentration of those who fail to report shall not be implemented. This is a procedural expression. According to the truth, the concentration of business operators should first be in accordance with the substantive provisions of the state, and under this standard, the business operators should implement the examination system of concentration of business operators, and then how to declare. In addition, from the standard point of view, only the issue of share is stipulated now, but the concentrated share and assets owned by operators vary greatly in different industries and fields. It is actually difficult to give consideration to different industries by using a unified share. Therefore, it is suggested that the State Council should distinguish between different industries and fields, so as to formulate the declaration standards for concentration of operators separately, instead of the unified standards stipulated in Article 21. The substantive norms, examination standards and conditions of concentration of business operators should be stipulated in different fields and industries. Of course, a principle requirement can be made, and the authorization should be specified by the State Council.
????????Member Guo Shuyan said that Article 21 mentioned that an operator may not report to the anti-monopoly law enforcement agency of the State Council in any of the following situations, and pointed out two situations. First, one operator owns more than 50% of the voting shares or assets of each other operator. Second, more than 50% of the voting shares of each operator who participated in the concentration are owned by the same operator who did not participate in the concentration. I don’t understand why this concentration does not need to be reported to the anti-monopoly agency in the State Council. However, it has been clearly pointed out in the article 19 on what is the concentration of operators that operators obtain the control rights of other operators by acquiring equity or assets. Since the situation pointed out in Article 21 is "concentration" as defined in Article 19, why not declare it to the State Council? If Article 21 is established, will all enterprises take the way of obtaining controlling rights when they are engaged in "concentration" in the future, so there is no need to declare to the State Council. Article 21 seems to open a back door for "concentration". Therefore, recommendation 21 needs to be considered again.
????????Member Wang Songda asked whether the third item of Article 26 "the influence of concentration of operators on market entry and technological progress" and the first item of Article 15 "for improving technology and researching and developing new products", such as these places, could the technological progress be fully described? Natural monopoly is not uncommon in daily life, and we have many experiences and feelings. For example, the media often disclose that some telecom industries are constantly juggling, such as packages, but there are not many benefits for consumers. This kind of magic trick of natural monopoly can’t reduce the cost and improve the economic benefit. When summarizing the achievements of Hong Kong in the past 10 years after its return to China, the news media cited an example, saying that when Hong Kong’s telecommunications industry was controlled by British or American people, long-distance calls were made at 10 yuan per minute. Later, the monopoly was broken, and Hong Kong people controlled the telecommunications industry themselves, but now it is a few cents per minute. For example, in the Ministry of Railways, it is very difficult and technically complicated to continuously improve the speed over the years. Taking improving the speed of locomotives as a breakthrough, a series of technological progress is reflected. Natural monopoly enterprises should use scientific and technological progress to counter all kinds of barriers set by foreign countries.
????????Commissioner Uzitu said that this law should have stricter regulations on foreign capital entering the China market. Only article 29 of Chapter 4, on concentration of business operators, deals with foreign capital’s merger and acquisition of domestic enterprises. In recent years, foreign investment in various fields of China’s economy really needs attention. Relevant information shows that before 2004, foreign investment in China in the form of mergers and acquisitions only accounted for 5% of the investment. By 2004, the proportion had risen to 11%, and in 2005 it reached 20%. What was the figure in 2006? I haven’t seen the data yet. I think there may be more. The leading bosses and backbone enterprises in many domestic industries have been acquired and controlled by foreign-funded enterprises. For such a situation, it seems a little weak to rely on this one alone. How to deal with this situation abroad? For example, in the United States, a foreign investment committee composed of the Ministry of Finance, the the State Council, the Ministry of Commerce, the Ministry of National Defense, the Ministry of Justice, the national security affairs department, and the Economic Advisory Committee has been set up, which is responsible for examining the merger and acquisition of American domestic enterprises by foreign investors. For example, CNOOC’s acquisition of Yunik Company in the United States was abandoned because of the intervention of Congress and the security review. A few years ago, we bought some US Treasury bonds. In recent years, the dollar has depreciated. Many people think that we are losing a lot now, but in this case, in the eyes of Americans themselves, there have been many comments on the impact of holding US Treasury bonds on US economic security. Another example is that our newly established foreign exchange company is going to buy the Blackstone Fund in the United States, which has caused discussion in the US Congress and relevant government departments.I believe that this behavior may affect the national security of the United States. Since China’s entry into WTO, our financial field has been opened in all directions recently, but it is almost impossible for our domestic finance, insurance and securities to enter the American market. It can be seen that as a free and open market economy country like the United States, they attach so much importance to this. In contrast, our country has not paid enough attention to this aspect. I hope it can be reflected in this law.??
????????Commissioner Chen Shineng said that the draft anti-monopoly law under discussion today involves my industry, and now there is a very serious problem, that is, industrial safety. I just want to give you an example, and I also want to ask you how to truly stop malicious mergers and acquisitions and protect our national industry in this anti-monopoly law. For example, batteries are used by everyone in daily life, including lithium batteries for mobile phones. After more than ten years’ development, the production of batteries in our country has reached more than 30 billion, compared with more than 40 billion in the world, and our export volume has reached 80% of the world trade volume, among which alkaline manganese batteries with relatively high technical content and high added value were monopolized by enterprises in the United States, Japan and other countries ten years ago. However, after ten years of our own efforts, we are now the world’s largest battery producer and exporter, so the United States and Japan felt threatened, and they took a series of measures, first of all, they took technical barriers to trade and the 337 investigation case of intellectual property protection, and made investigations in 2004 and 2005, but we responded positively and won. In anti-dumping, we also responded and won. Improve environmental protection indicators, and we have also kept up with them through our technical measures. In this case, the United States has adopted the practice of fundamentally changing the property rights of the backbone battery enterprises in China. It has bought the leading battery enterprises in China, Nanfu Battery Co., Ltd. in Fujian and the battery co., Ltd. jointly invested by China Bank and Hongkong Bank in Ningbo at a high price.They are the backbone enterprises in our battery industry, adopting high and new technology. Their alkaline manganese batteries are the first and second in our country and the top ten in the world. Nanfu brand and Shuanglu brand mercury-free alkaline manganese batteries are brand-name products in China, which have been recognized by AQSIQ. These two enterprises, whose predecessors were small and medium-sized enterprises, began to work hard in the 1990s. They gradually developed by introducing advanced foreign equipment and technology, and solved the initial funding problem. They respectively set up joint ventures with international finance and investment companies and Hong Kong companies. After long-term hard work and capital accumulation, by 2002, the total assets of these two companies had reached 880 million and 390 million respectively, and their sales revenue had reached 757 million, and their tax profits had also reached. Such a high profit rate is unmatched by foreign battery industry. But no one expected that these two companies, which are developing at a high speed, were both acquired by foreign battery companies from 2005 to 2006. Nanfu battery was acquired 72% equity by Duracell in the United States, the largest battery company in the world, and BOC was acquired 85% equity by GT Company in Singapore, and the main business rights of the company were given to foreign battery companies. There is also the third Leopard King, which is also 85% owned by American companies. In other words, the top three most profitable alkaline manganese battery enterprises in China have been acquired by foreign enterprises. Acquisition of property rights of China battery enterprises,It may be a very important strategy for international famous battery enterprises to monopolize the international high-end battery market. In recent ten years, American Duracell Group has poured a lot of financial and material resources into the China market. At that time, China’s battery industry itself was not mature, so their brands occupied a large share of us. By the middle and late 1990s, several domestic battery enterprises, such as Nanfu, which I mentioned just now, had introduced technology and equipment, digested and absorbed them, and gradually acquired their own intellectual property rights, with improved quality and grade. In the domestic market, it has been supported by AQSIQ and China Battery Association. We have blocked Duracell, Energizer and Hitachi in Japan, and their output, sales volume and profits in our country have dropped greatly. At this time, foreign enterprises have taken the above series of measures. Although we responded to the US 337 investigation case and the anti-dumping case, we all won, but in this case, due to the short-term behavior of the local governments where these domestic enterprises are located, these enterprises all have local government investment, and the local government originally invested tens of millions, but now it can get back hundreds of millions, so it also strongly advocates. I don’t know if there is any unfair trade here. Bank of China, for its own sake, as a financial institution, now has a relatively high profit, so take it back quickly, or maybe the relevant parties have done some work. In this kind of "mercenary" and "short-term behavior", the high-priced acquisition with foreign companies "hit it off". In order to successfully acquire, foreign companies,For a period of time, they can promise to play your brand, but the most important thing is to make use of your sales channels. First, China has a large market. In addition, China’s export volume is already very large, accounting for 70%-80% of the international market. Slowly, at the beginning, I signed a contract with you. One was to pay a high price, and the other was to promise that your brand still existed. Finally, he became the big boss, and he had the final say, and your brand gradually disappeared. Finally, it was his brand that was completely played. This is a malicious merger. Under such circumstances, China’s battery industry leader, the enterprise that was cultivated in the past ten years of reform and opening up, was slowly "eaten" and withdrew from the market. Therefore, what we have to think about is how to maintain the industrial safety of these industries in our country. Now this phenomenon not only occurs in the battery industry, but also in the household appliances industry, hardware industry, daily chemical industry, plastic industry and so on in my light industry. For example, in the home appliance industry, through the efforts of these ten years, our output and sales, including world trade volume, air conditioners and microwave ovens account for 70% of the world trade volume, refrigerators and freezers account for 50% of the world trade volume, washing machines account for more than 40% of the world trade volume, and small household appliances account for 80% to 90% of the world trade volume. Therefore, the foreign enterprises in the world corresponding to us must be jealous of us, so they will take various measures to us, including buying him at a high price, which is strategic. For example, in recent years, Dabao in Beijing, as a welfare enterprise for the disabled,The state has given preferential policies, and now, after it is developed, Procter & Gamble will also buy it, and it is said that it seems that we have talked about it. Supor rice cookers in the hardware industry are to be acquired by French companies. I mean, from a battery industry, we can see that the whole light industry in China and hundreds of famous brands are threatened, and so is Wahaha, a beverage company in Hangzhou. Of course, there are also some strategic problems of its own. These problems are worthy of our deep thinking. Therefore, in our anti-monopoly law, I want to ask you how to withstand it. Because we know very well that when we want to buy American oil companies, CNOOC has already talked about it, and finally American parliamentary legislation blocked us. Our legislation should give full consideration to the protection of China’s industrial safety, such as the self-discipline of trade associations. Article 20 of Chapter 4 stipulates that if the concentration of business operators meets the reporting standards stipulated by the State Council, the business operators should report to the anti-monopoly law enforcement agencies in the State Council in advance, and if they fail to report, they may not implement concentration. As a matter of fact, our trade association knew all those things afterwards, because the State Council didn’t authorize us, so they didn’t have to report to us. We didn’t know until afterwards, but it was too late. As far as the State Council is concerned, the declaration standards can only be set in principle, and each industry and product can be set quantitatively, which the State Council can’t do, not to mention the State Council, and the National Development and Reform Commission can’t be so detailed. Therefore, for specific industries, the State Council should authorize trade associations. If not,It can’t do it at all.
????????Dai Songling (deputy to the National People’s Congress) said that the merger between enterprises should be clearly controlled in the draft. In recent years, China’s economy has developed rapidly. Under the market economy, enterprises with fixed assets of about 5 billion have a natural tendency to expand their scale and market share. Moreover, in some areas, large enterprises buy, merge and control small and medium-sized enterprises in these areas by virtue of their scale and advanced technology, resulting in competitors with certain capabilities gradually withdrawing from the market and forming a monopolistic market structure. Therefore, the merger between enterprises should be clearly controlled in the draft. If the purchase, merger and holding between enterprises form a monopoly in a certain market, or even the price of the products of the enterprise has completely influenced the market price, the state must intervene.
