The Multiple Hands: Institutional Dynamics of China's Competition Regime

Abstract

When the Anti-Monopoly Law (“AML”) was promulgated on August 30, 2007, one of the most notable unanswered questions was its institutional arrangement, especially regarding which agency/agencies were to be entrusted with enforcement powers. The law only provided a two-level structure. It foreshadowed the creation of an Anti-Monopoly Commission (“AMC”) directly under the State Council, responsible for “organizing, coordinating and guiding” anti-monopoly work. Below this supra-ministerial body, according to Article 10, there would be one or more anti-monopoly enforcement authorities (“AMEAs”) designated by the State Council.

While falling short of definitive designation of particular agencies, the language of Article 10 appeared to typify the treatment of enforcement authorities in China’s legislation. In such statutes normally no specific agency names are given, but instead they defer to the division of portfolios inside the executive branch based on internal orders. In this particular case, however, certainty was very far from absolute with the reference to the State Council’s power to designate the AMEA(s). Various agencies already shared pre-existing authority in the enforcement of antitrust or competition rules, either as the designated enforcement authority of a particular statute or as an industry regulator. The prospect of a major realignment of power under a comprehensive AML had set in motion an intense race among the agencies for enforcement powers during the AML drafting process.

As widely speculated, eventually no agency succeeded in monopolizing the enforcement powers, which was settled as a result of the State Council’s institutional reconfiguration in March 2008. the National Development and Reform Commission ("NDRC"), the Ministry of Commerce ("MOFCOM") and the State Administration for Industry and Commerce ("SAIC") each was given part of the enforcement powers under the AML, mostly in line with their previous work done in the antitrust/competition field. The AMC, composed of commissioners initially representing 14 agencies, was established in July 2008, finally completing the framework envisaged in the AML.

The AML as adopted contains general principles, imported legal terminology and peculiar challenges unfamiliar to conventional competition law . Implementation of the statute amounts to a de facto follow-up legislative process, which has been dominated primarily (though not exclusively) by the three enforcement authorities. In this process, compared with the legislature and the courts, the AMC and the AMEAs have so far played a central role in shaping the development of the AML.

This article aims not only to provide an introduction of the institutions under China’s current competition regime, but also to analyze and highlight the unique institutional dynamics of AML enforcement that is of vital importance for the understanding of the course of evolution of the AML, as well as predicting its future development. Part II first reviews the pre-AML enforcement mechanism of various antitrust rules, the institutional legacy that helps to explain the relevance of the different agencies in AML enforcement today. Part III examines the organization and functions of the AMC, to shed some light on its possible role in coordinating and accommodating diverging interests in the making of competition law and policy. In Part IV the setup and activities of each of the three enforcement authorities are studied in order to gain an understanding of their part in the development of the AML. Part V concludes by offering observations of the institutional context of the AML as it has evolved so far.

Keywords: China's Anti-Monpoly Law, Institutions, Anti-Monopoly Commission, NDRC, MOFCOM, SAIC