Release these new signals, two billion yuan fines! China's Anti Monopoly Enforcement Swords to Livelihood | Field | Enforcement
China's antitrust enforcement, which has received widespread social attention, has recently seen new trends.
According to information recently disclosed by the State Administration for Market Regulation, since the beginning of this year, the national market supervision system has carried out a special action on anti-monopoly law enforcement in the field of people's livelihood, continuously strengthening anti-monopoly law enforcement in the field of people's livelihood, and has made phased progress. The first batch of 13 major typical monopoly cases that were centrally investigated and dealt with have been announced to the society, mainly involving drugs, public utilities, insurance and other fields. Some companies have even been fined billions of yuan by market regulatory authorities.
Through the first batch of published typical cases, we can see some important signals from them.
There are not only enterprises but also administrative units on the "black list"
Among the first batch of 13 typical cases announced in this anti-monopoly law enforcement special action, 5 cases occurred in the pharmaceutical industry, and 8 cases occurred in the fields of public utilities and insurance. The main reasons for being listed are: abuse of market dominance, related parties reaching and implementing monopoly agreements, abuse of administrative power to exclude and restrict competition.
In the field of pharmaceuticals, the drugs involved in the case are listed as national essential drugs for the treatment of major diseases such as tumors, myocardial infarction, and hemodialysis, which are related to the health of the public. However, the illegal behavior of the relevant parties has brought adverse social effects.
Yuanda Pharmaceutical and Wuhan Huihai have reached and implemented a monopoly agreement on the sale of norepinephrine raw materials and adrenaline raw materials, which has led to an annual increase in the prices of related preparations and frequent shortages, affecting the normal use of medication by patients, increasing the cost of medication for patients and national medical insurance expenditures.
The public utilities involved in the case cover areas such as heating, gas supply, and the collection and transportation of kitchen waste, providing essential services for people's daily lives. However, the abuse of market dominance often occurs.
If Huaneng Rizhao Thermal Power Co., Ltd. has no legitimate reason to require the development and construction unit of the new residential area to purchase the heat metering device it sells, otherwise the heating acceptance will not be accepted; Some enterprises and institutions within their heating range have changed from charging based on heat consumption to charging based on area, while other similar units still charge based on heat consumption, causing related enterprises and institutions to bear more operating costs.
From the perspective of subject attributes, in the cases announced in this law enforcement action, in addition to enterprise entities, there are also two administrative units. The two typical cases of administrative monopoly are from the Lanzhou Urban Management Committee and the Harbin Urban Management Bureau, respectively. The former did not undergo fair competition review and violated the review standards by introducing policy measures, excluding and restricting other eligible enterprises from participating in the local food waste collection, transportation, and treatment service market competition. The latter did not strictly implement the fair competition review system and abused administrative power to exclude or restrict other enterprises with corresponding qualifications and service capabilities from participating in the competition of the shared bicycle market in the region.
Strengthening the deterrent effect through special law enforcement actions
According to Shi Jianzhong, an expert in the expert advisory group of the State Council's Anti Monopoly Commission and Vice President of China University of Political Science and Law, due to the product characteristics and market structure of the pharmaceutical industry and public utilities, monopolistic behavior is prone to occur, frequent, and has always been a key area of sustained attention in anti-monopoly law enforcement. The first batch of cases announced this time are typical and representative, which can further guide and regulate the process. At the same time, through specialized law enforcement, the benefits of "investigating and punishing together, deterring a group, and regulating a whole area" can also be strengthened.
Why are special law enforcement measures important? Zhang Chenying, an expert from the Expert Advisory Group of the State Council Anti Monopoly Commission and a professor at the Law School of Tsinghua University, added that compared to scattered anti-monopoly enforcement, special enforcement actions can effectively integrate and coordinate enforcement resources. Enforcement agencies can develop action plans based on specific industry needs, match more enforcement resources for key monopoly areas, and improve enforcement efficiency and quality.
"For market entities, the deterrent effect brought by centralized antitrust enforcement can better prevent illegal operators from breaking the law again and achieve general prevention, practicing the concept of combining punishment and prevention." said Zhang Chenying.
From the perspective of the punishment intensity of this special action, the market supervision department is not lenient, not only confiscating the illegal gains of relevant enterprises, but also imposing fines on relevant entities in accordance with relevant regulations. Among them, the market supervision department has issued a penalty of billions of yuan for the cases of Yuanda Pharmaceutical and Wuhan Huihai reaching and implementing a monopoly agreement, abusing market dominance, and Northeast Pharmaceutical Group Co., Ltd. abusing market dominance.
Solving the problem of "people's livelihood" has profound implications
As early as early February this year, China's market regulatory authorities made arrangements for the special action of anti-monopoly law enforcement in the field of people's livelihood. This year's antitrust law enforcement has chosen to tackle issues in the field of people's livelihoods, which has an important practical background.
From a micro perspective, it is for the people.
Zhang Chenying stated that one of the important tasks of China's economic work in 2023 is to effectively prevent and resolve major risks, promote the overall improvement of economic operation, achieve effective improvement in quality and reasonable growth in quantity, and take a good step towards the comprehensive construction of a socialist modernized country. "The use of anti-monopoly laws to resolve and prevent social welfare losses caused by competition damage is an important way."
"Among the many areas of anti-monopoly law enforcement, the importance and enforcement needs of the people's livelihood are the most significant." Zhang Chenying gave an example, stating that areas such as medicine, water, heat, gas and electricity, transportation, social insurance, and building materials directly affect the basic survival and vital interests of the people. The negative impact of monopolies in these areas, such as high prices, often becomes an "unbearable burden" for the people. If monopolistic behavior is not effectively curbed, it will have a serious impact on the daily life and economic interests of the people.
In Zhang Chenying's view, this special law enforcement action focuses on the field of people's livelihood. The reason is that in recent years, the public has strongly reflected on monopolistic behavior in the raw material industry, public utilities industry, and other areas of people's livelihood. The number of monopolistic agreements and anti-monopoly law enforcement that abuse market dominance in this field has also been consistently high. Carrying out a special anti-monopoly action against it is an important measure for China to base itself on the current economic situation and implement supervision for the people.
From a macro perspective, it is for the overall situation.
Shi Jianzhong pointed out that preventing and stopping monopolistic behavior in the field of people's livelihood not only helps to promote the construction of a unified national market, but also helps to curb the abuse of administrative power and eliminate restrictive competition.
"From the perspective of market regulation, promoting the construction of a unified national market requires fully leveraging the decisive role of the market in resource allocation and better leveraging the role of the government." Shi Jianzhong said that China's anti-monopoly law not only opposes market monopolies but also requires breaking administrative monopolies. Preventing market monopoly means making the market play a decisive role in resource allocation; Breaking administrative monopolies can better leverage the role of the government. Taking anti-monopoly in the field of people's livelihood as a starting point, it can be foreseen that the anti-monopoly law will be a powerful weapon to promote the construction of a unified national market in the future.
Preventing and stopping monopolistic behavior in the field of people's livelihood is equally important for limiting administrative monopolies. Zhang Chenying introduced that in the past, there were often behaviors such as administrative power obstructing the free flow of goods, restricting or indirectly restricting transactions in key industries such as transportation, engineering construction, insurance, government procurement, and bidding.
Regarding the behavior of administrative power obstructing normal market economic activities, Shi Jianzhong emphasizes that strengthening fair competition review is an important means. This special law enforcement action aims to address several issues in the fair competition review process, such as the lack of fair competition review or the low quality of the review. The publication of two typical cases of administrative monopoly will help to strengthen the hard constraints of the fair competition review system and improve the quality of fair competition review.
