“Interim Provisions on Prohibiting Monopoly Agreements” will come into force on Sep. 1, 2019

For a long time, the monopoly behaviors could be regulated by 3 departments, which are the SAMR, NDRC and MOFCOM. The cross-administration makes the original “Interim Provisions on Prohibiting Monopoly Agreements” (the “Original Provisions”) issued in 2011 by SAIC (the predecessor of SAMR), could not be implemented smoothly. On Mar. 2018, CPC Central Committee issued the “Proposal for Deepening the Reform of the Party and State Institutions”, in which SAMR has been assigned as the department which shall conduct the anti-monopoly enforcement comprehensively. Recently, SAMR has issued 3 supplementary regulations for the “Anti-monopoly Law”. The 3 regulations include, the “Interim Provisions on Prohibiting Monopoly Agreements” (Order No. 10 of SAMR), the “ Interim Provisions on Prohibiting the Abuse of Dominant Market Position” (Order No. 11 of SAMR), and the “Interim Provisions on Prohibiting the Abuse of Administrative Power to Eliminate or Restrict Competition” (Order No. 12 of SAMR). The 3 regulations will come into force on Sep. 1, 2019. Hereinafter, we will introduce some key contents in the newly issued “Interim Provisions on Prohibiting Monopoly Agreements” (the “New Provisions”)

1. To add more specific prohibition behaviors

In the Original Provisions, from Article 4 to 7, the 4 articles have listed 4 categories on the prohibition behaviors. Each category has listed several specific prohibition behaviors. In the New Provisions, from Article 7 to 12, the 6 articles have listed 6 categories on the prohibition behaviors. The newly added contents include:

(1) The 4 categories stipulated in the Original Provisions are kept in the New Provisions. In addition, the New Provisions have added “other means” under each category, by which the new behaviors which have not been listed as the specific prohibition behaviors, could be regulated in the future.

(2) 2 new categories have been added, which are, Article 7 is about the operators that are competitors shall be prohibited from reaching the following monopoly agreements on the goods or services; and Article 12 is about the operators shall be prohibited from reaching the following monopoly agreements with trading counterparties on the price of goods.

2. To specify the exemption range for punishment

The “Original Provisions” has only stipulated that the punishment to the operator which has reported voluntarily could be exempted, or the amount of fine may be reduced. However, there is no specific standard. Article 34 of the “New Provisions” has stipulated that for the first undertaking applying for the Leniency Program in an investigation case, the amount of fines may be reduced by not less than 80%; for the second applicant, the amount of fines may be reduced by 30% to 50%; and for the third applicant, the amount of fines may be reduced by 20% to 30%.

Last but not least, the “New Provisions” has also combined some regulations issued by NDRC and SAIC, and prescribed articles on several substantive and procedural issues, such as the authorization and administration, determination of a monopoly agreement, acceptance of a case, investigation, exemption, suspending an investigation, resuming an investigation, punishment, lenient treatment, publicity.