BIZCHINA / Top Biz News
Cabinet okays draft anti-monopoly law
By Hu Yuanyuan (China Daily)
Updated: 2006-06-08 08:46
The cabinet yesterday gave in principle approval to a draft anti-monopoly
law which would provide a free and fair competitive environment to all
enterprises.
A statement from an executive meeting of the State Council presided over
by Premier Wen Jiabao said the draft law, after revision, will be
submitted to the Standing Committee of the National People's Congress,
the top legislature, for deliberation.
"Monopoly is not an offence in itself. The trouble arises when monopolies
wield their dominant status to curb competition," said Huang Yong, an
anti-monopoly consultant at the Ministry of Commerce, adding that the law
does not specifically target multinationals.
The draft law contains articles regulating monopoly agreements, abuse of
dominant market status and large-scale consolidation.
It defines "monopoly" as a single operator controlling half or more of an
industry's overall market share, or two operators colluding to hold
two-thirds, or three holding three-quarters.
While multinationals are reluctant to publicly discuss the proposed
anti-monopoly law, in private, many executives are extremely attentive to
every detail in the draft, said Lester Brown, a Beijing-based lawyer at
law firm Allen & Blake LLP.
"Some foreign-invested businesses have become a little uneasy about the
law in the wake of a State Administration for Industry and Commerce
report in 2004, which warned that foreign business giants were building
monopolies in China," said Wang Xiaoye, a law professor at the Chinese
Academy of Social Sciences who participated in the drafting of the law.
According to the report, some transnational companies have been using
their dominant positions in technology, brand recognition and capital and
management to suppress competitors and maximize profits on the Chinese
mainland. For instance, Kodak and Fuji account for about 75 per cent of
China's film and bromide-paper segments.
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