Monopoly Agreement

For the purposes of the supervision and regulation of SAIC, the draft monopoly agreement defines a monopoly agreement as any cooperative agreement, decision or conduct between or by two or more undertakings which has the effect of eliminating or restricting competition. (Since the NDRC oversees pricing, draft monopoly agreements do not address this issue.) The draft does not only include written or oral agreements and resolutions; the coordination of conduct may be regarded as a monopoly agreement if it has the effect of eliminating or restricting competition. 1. If other legal requirements are also fulfilled, this shall be in accordance with the competition law of the PRC where the combined market shares of undertakings competing in horizontal agreements on the relevant market are less than 15 %. Under the undertaking programme, under the alleged monopoly agreement, the company may request the suspension of the investigation during the investigation procedure and undertake to take specific measures to eliminate the influence of the conduct within the time limit approved by the competition authorities of the PRC. A monopoly refers to the moment when a company and its product offerings dominate a sector or industry. Monopolies can be seen as an extreme result of free-market capitalism, because without restrictions or restrictions, a single enterprise or group becomes large enough to own all or almost the entire market (goods, supplies, goods, infrastructure, and assets) for a particular type of product or service. The term monopoly is often used to describe a company that has complete or almost complete control over a market. 69 Nov 15 Hr`g Tr., note 2 above, at 94 (Jacobson); see also, for example. B Richard A.

Posner, Antitrust Law 229 (2d ed. 2001) (with the note that exclusive distribution “may increase the scope required for a new entry, and […] to increase the time required for entry and thus the possibility of monopoly pricing”); Carlton, loc. cit. 68, p. 665 n.15 (arguing that the `key issue` is that exclusive distribution `may affect the competitiveness of the competitor with the resulting harm to competition`). Of the three agencies, MOFCOM plays the most active role in merger control and has handled a number of such cases through its antimonopoly office. China Law Update has already summarized the rules and regulations published by MOFCOM to implement the fight against money laundering, such as the Merger Notification Regulations (September 2008), the Merger Notification Guidelines (February 2009) and the Guidelines on Merger Control Application Documents (also in the February 2009 edition). So what is a vertical monopoly agreement? The so-called vertical monopoly agreement refers to a type of monopoly agreement – certain monopolistic practices prohibited by China`s antimonopoly law, upstream and downstream operators (such as manufacturers and distributors) who are not in a competitive relationship in the same industry entering into an agreement that explicitly or implicitly eliminates or restricts competition. The term relative is a horizontal monopoly agreement in which upstream and downstream operators (such as the manufacturers themselves or the retailers themselves) who are in a competitive relationship enter into an agreement that eliminates or restricts competition. Draft monopoly agreements describe what are considered to be horizontal monopoly agreements, as set out in Article 13 of the AMLA. For example, a horizontal monopoly agreement that “restricts production or sales” includes agreements to restrict or suspend production, require overstocking, or restrict the production and sale of a particular product. In addition to agreements that set the resale price or set a minimum resale price – as set out in Paragraph 14 of the GWG with respect to vertical agreements – the draft monopoly agreement adds new conditions that prohibit companies from entering into agreements that restrict resale regions or downstream traders` partners without a valid reason or that include tendering agreements.

But it is now generally accepted that the assumptions needed to support this argument are not always true. For example, if buyers “are unable to coordinate their actions to defeat tactics,” a monopolist can “scare victims into selling at low prices; no single victim can end exclusion, so no victim has bargaining power. (66) In other words, in certain circumstances, buyers may accept ineffective exclusive distribution agreements because each buyer considers that other buyers, regardless of what they do, will accept. As a result, buyers will not necessarily resist the exclusive trade that harms them collectively. And if those who enter into exclusive distribution agreements are distributors, the producer may be able to obtain their consent by sharing with them part of its expected monopoly profits. (67) Thus, exclusive distribution may, in certain cases, be anti-competitive, notwithstanding the apparent anomaly that buyers conclude agreements allowing a seller to acquire or maintain a monopoly. Under the transitional provisions, both horizontal monopoly agreements (i.e. agreements between competing undertakings containing clauses on prices, production restrictions, market sharing and customer sharing restricting new technologies and collective boycotts) as set out in Article 13 of the ANTIMONOPOLY LAW of the PRC and vertical monopoly agreements (i.e.

agreements between a company and its trading partners) containing clauses relating to the maintenance of the resale price and the fixing of minimum prices in accordance with Article 14 of the Antimonopoly Law of the PRC are in themselves illegal, unless the companies concerned can demonstrate that the exemption conditions set out in Article 15 of the Antimonopoly Law of the PRC are fulfilled (the “Basic Monopoly Agreements”). 1. Downstream traders shall not be penalised. In strict accordance with the provisions of the antimonopoly law, the two parties who conclude and implement the monopoly agreement will be held liable for the violation of the monopoly. In practice, however, the law enforcement authority generally assumes that downstream operators (e.B. traders) are in a weak position in vertical monopoly agreements and their holdings in the monopoly agreement are passive. As a result, traders have rarely been penalized in previous cases of vertical monopoly agreements. However, the law does not explicitly define the issue and it may be necessary to refine the antimonopoly law and its relevant implementing provisions. Both price-related and non-price-related monopoly agreements are subject to transitional provisions. In particular, exclusive distribution can be detrimental if it deprives competitors of “the flexibility necessary to achieve efficiency gains, although without exclusivity”, more than one undertaking would “do so”. be large enough to achieve efficiency. (68) In other words, exclusive distribution may be a means by which an undertaking acquires or maintains monopoly power by affecting the ability of competitors to become effective competitors which undermine the position of the undertaking.

As one panelist put it, “the exclusive case you should worry about” is one where exclusivity deprives rivals of the ability to achieve economies of scale. (69) A natural monopoly may arise when an undertaking becomes a monopoly due to high fixed or start-up costs in an economic sector. Natural monopolies can also occur in industries that require unique raw materials, technologies, or a specialized industry where a single company can meet the needs. In the utility industry, natural or government-authorized monopolies thrive. Typically, there is only one large (private) company in an area or municipality that provides energy or water. Monopoly is allowed because these suppliers incur high costs for the production of electricity or water and the supply of these essential goods to each local household and business, and it is considered more efficient that there is only one supplier of these services. 1. the facts relating to the alleged monopoly agreement; In summary, the interim provisions adopted by SAMR, by combining the relevant provisions relating to monopoly agreements previously adopted by HARS, include both essential and procedural aspects in order to increase the transparency of law enforcement and to improve a predictable environment for law enforcement.

As such, the interim provisions have theoretically created a uniform guide for companies to monopoly agreements under the single system of competition law in the PRC. A company with a pure monopoly means that a company is the only seller in a market without other narrow substitutes. For many years, Microsoft Corporation had a monopoly on the software and operating systems used in computers. Even with pure monopolies, there are high barriers to entry, such as . B considerable start-up costs, which prevent competitors from entering the market. (What is the difference between monopoly and oligopoly? Learn more.) The largest monopoly separation in U.S. history was that of AT&T. After being allowed to control the country`s phone service as a state-backed monopoly for decades, the giant telecommunications company faced antitrust laws.


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