So you want to put Motels up on Boardwalk? First you need Park Place…
Submitted by Experience Not Logic Blog
Well folks, we are officially one week away from the effective date of China’s Anti-Monopoly Law! Aren’t you excited?!?
I’m sort of excited, sort of. But not really. But more excited than about the contemporaneous adoption of Henan’s judicial etiquette rules, though the AML is certainly less funny.
Let’s take a quick look at the law:
Chapter I - General Provisions
Just definitions, regulatory body, jurisdiction, purpose, all the same unimportant language in the beginning of any PRC law that doesn’t really have any meaning … until you’re getting sued.
Chapters II-III
Yawn inducing boring definitions of “Monopolistic Conduct” and “Abuse of Market Dominance.” Sure, this law is a big deal for China, but this conduct and its effect on the marketplace was a basic part of our public primary school education when covering late 19th/early 20th century US history. The basic lesson: Standard Oil, Boo! Yellow Journalism Competition … Yay? National Library Construction, 加油 (”add petrol” in Chinese)!
The more I reflect the less boring these provisions become. China is a country moving from a planned economy where the State and its Enterprises were the monopoly to a market economy in which competition is fostered and protected by antitrust laws. Wait a sec! Chapter I, Article 12, this AML seems to even apply to SOEs? Awesome!
Chapter IV - Concentration of Business Operations
This is where a lot of the editorial focus has been. I don’t really get why this is such a big deal. If anything, I really appreciate this chapter. Have you ever read the M&A Provisions? They’re about as vague and ambiguous as you can get. Between this Chapter and the definitions in Chapter II, you can get a much stronger handle on whether or not your acquisition will be approved by the relevant authority. Which is nice, because I assume that it would suck to have an acquisition vetoed by the relevant authority after months of no weekends and sleepless nights.
Chapter V Abuse of Administrative Power to Eliminate or Restrict Competition
See second paragraph of Chapters II-III, above, and final sentence of Conclusion, below. The jury’s out, especially without an independent judiciary or a 7th Amendment equivalent.
Chapters VI-VII
The scary parts (damages, investigations)… Except for the plaintiff’s attorneys. And the defendant’s attorneys.
Conclusion
The AML is pretty tame and predictable, except maybe in relation to IP rights. What is going to be exciting is how the law is enforced. But that’s always the fun part in a civil law jurisdiction. I’m guessing that domestic companies will enjoy greater protection than foreign companies at least until that magical day when the Party Honchos decree that indeed China companies can compete on a fair playing field with the rest of the world, or not, see Chapter V.
Outside Reading
1. Jones Day’s thorough Publications team does it again.
2. Matt Young proves that the game metaphor is too fun to pass up.
3. Paul Jones plays it straight (h/t to China Business Law Blog).
4. Dan Harris at CLB links to others in a couple of posts, 1 & 2.
5. CLB team member Steve Dickinson calls it what it is.
