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Project Details
Funding Scheme : General Research Fund
Project Number : 17606518
Project Title(English) : Anti-Monopoly Law Enforcement in China 
Project Title(Chinese) : 反壟斷法之執行 
Principal Investigator(English) : Dr Cheng, Kin Hon Thomas 
Principal Investigator(Chinese) :  
Department : Department of Law
Institution : The University of Hong Kong
E-mail Address : thomas.cheng@hku.hk 
Tel : 39172929 
Co - Investigator(s) :
Panel : Humanities, Social Sciences
Subject Area : Social and Behavioural Sciences
Exercise Year : 2018 / 19
Fund Approved : 594,100
Project Status : Completed
Completion Date : 30-6-2022
Project Objectives :
To evaluate the existing decisional practices and jurisprudence under the Anti-Monopoly Law to see whether they are consistent with established competition law principles.
To illuminate the debate of whether AML enforcement may be motivated by political biases and strategic considerations.
To evaluate how the dual track enforcement system affects the development of jurisprudence and the effectiveness and fairness of enforcement under the AML.
To explore ways in which China will need to tailor AML enforcement to reflect its domestic socio-economic circumstances.
To propose ways in which China should approach the intellectual property-competition interface to reflect development considerations.
To propose ways in which industrial policy considerations may be taken into account in merger review without unduly undermining competition.
To examine how AML enforcement should take into account the complex relationships between the state and the economy in China, including in conduct enforcement such as tying, predatory pricing, and cartel prosecution, and regulation of abuse of administrative monopoly.
Abstract as per original application
(English/Chinese):
With the adoption of the Anti-Monopoly Law (“AML”) in 2007, China officially joined the global competition law community. In the space of ten years, China has quickly established itself as one of the most prominent competition law jurisdictions, especially as far as merger review is concerned. However, the path to prominence has been rocky at times. The country has been accused of allowing political bias or protectionist instinct to seep into its AML enforcement. Foreign observers have argued that China has pursued industrial policy objectives through its merger review enforcement in particular. While political bias is difficult to prove without access to closed-door deliberations of the enforcement authorities, it would be helpful to examine whether China’s enforcement record is consistent with established competition law principles. To the extent that cases have been decided in accordance with such principles, then charge of political bias becomes less damaging. Another issue that is worth examining in AML enforcement thus far is the dual track enforcement system consisting of the enforcement authorities and the courts. Due to the lack of discovery procedures in Chinese courts, the ability of the courts to handle certain cases, such as cartels, is necessarily limited. Therefore, the Chinese courts are likely to focus on cases in which availability of evidence, at least evidence on the existence of the conduct, is less of an issue, namely vertical agreements and abuse of dominance cases, especially the ones that the authorities have refused to take. This is potentially problematic because the enforcement authorities and the courts have adopted different approaches to the same conduct, such as resale price maintenance. Therefore, this proposed project will examine this issue and put forward possible solutions. Lastly, this proposed project examines whether China needs a contextualized approach to competition law enforcement that takes into account its somewhat unique domestic socio-economic circumstances. These include the need to incorporate development considerations, especially technology catch-up, and reflect the complex and omnipresent interaction between the state and markets. A contextualized approach will in turn affect China’s treatment of the intellectual property-competition interface, merger review, conduct enforcement, and regulation of abuse of administrative monopoly. This proposed project will suggest ways in which the above four areas of AML enforcement will need to be adjusted as a result of the aforementioned socio-economic circumstances if a contextualized approach is deemed more appropriate for China.
隨著2007年反壟斷法(“反壟斷法”)的通過,中國正式加入了全球競爭法界。在十年的時間裡,中國迅速成為最重要的競爭法司法管轄區之一,特別是就合併審查而言。然而,一切並非一帆風順。該國被指控允許政治偏見或保護主義滲透其反壟斷法執法。外國觀察家認為,中國通過合併審查實施了產業政策目標。雖然如果沒有執法機關的閉門會議紀錄,很難證明政治偏見,那麼檢查中國的執法記錄是否符合既定的競爭法原則將會有所幫助。如果案件是根據這些原則決定的,那麼對政治偏見的指責就不確立了。 反壟斷法執法中另一個值得研究的問題是由執法當局和法院組成的雙軌執法系統。由於中國法院缺乏搜證程序,法院處理某些案件(如卡特爾)的能力必然受到限制。因此,中國法院可能會把重點放在縱向協議和濫用支配地位的案件。採取。這可能產生問題,因為執法機關和法院對同一行為採納了不同的態度,例如維持轉售價格。因此,該項目將研究這一問題並提出可能的解決方案。最後,這項目會考察中國是否需要考慮到其獨特的社會經濟環境執法。其中包括需要納入發展考慮因素,特別是科技發展,並反映國家與市場之間複雜的關係。
Realisation of objectives: The objectives of the project have been achieved overall. The one objective where effort may have fallen short (Objective 2) is the examination of political biases in Anti-Monopoly Law (AML) enforcement. The difficulties were foreseen when the project was conceived. The PI was aware that it may not be possible to find definitive evidence on political interference in competition law enforcement, given the opaque nature of the PRC bureaucracy. Effort was made to speak to practitioners and others who would be in a position to comment on the issue. Thankfully, this problem has been somewhat alleviated by the overtly politically driven enforcement against the Big Tech companies such as Alibaba, Meituan and Tencent. There was an almost unanimous consensus in the international media and among commentators that this constituted a government crusade against the Big Tech companies. There has been a deliberate effort by the PRC government to weaken the Big Tech companies and to diminish their influence in Chinese society. And because recent enforcement under the AML has been so dominated by Big Tech issues, the scope of the project has shifted to devote greater attention to the industry. This shift in focus is fully justified because digital economy issues have taken over the field of competition law in the last few years, especially after the original proposal was prepared in 2017. There were already signs that digital economy issues were becoming increasingly important in 2017. But subsequent development globally and in China means that a project on competition law enforcement in China cannot afford to overlook this sector. Therefore, a number of research output focus on digital economy issues, some specifically on China and some on more general theoretical issues that illuminate the analysis on China. Another important objective (Objective 5) that has become a main focus of the project is the intellectual property-competition interface, especially the patent-competition interface. This area of law has taken on greater importance in the Mainland due to its implications for technology transfer and acquisition. With the increasing political tension between the US and China and the growing focus on technological self-sufficiency, the role that competition law can play to facilitate technology transfer has taken on extra importance. Therefore, a considerable part of the project is devoted to developing a theoretical framework for approaching the patent-competition interface in China in light of its political, developmental, and technological considerations. The remainder of the objectives (Objectives 1, 3, 4, 7) have either been subsumed under the discussion of digital economy issues and the patent-competition interface, or dealt with separately, for example, in the book chapter on cartel enforcement in Mainland China. The objective of delving into industrial policy considerations in merger review (Objective 6) has been somewhat scaled back because merger review tends to play a less important role in the digital economy and the patent-competition interface in China. With the shift in focus of the project to these two topics, less attention was paid to merger review.
Summary of objectives addressed:
Objectives Addressed Percentage achieved
1.To evaluate the existing decisional practices and jurisprudence under the Anti-Monopoly Law to see whether they are consistent with established competition law principles.Yes100%
2.To illuminate the debate of whether AML enforcement may be motivated by political biases and strategic considerations.Yes80%
3.To evaluate how the dual track enforcement system affects the development of jurisprudence and the effectiveness and fairness of enforcement under the AML.Yes100%
4.To explore ways in which China will need to tailor AML enforcement to reflect its domestic socio-economic circumstances.Yes100%
5.To propose ways in which China should approach the intellectual property-competition interface to reflect development considerations.Yes100%
6.To propose ways in which industrial policy considerations may be taken into account in merger review without unduly undermining competition.Yes80%
7.To examine how AML enforcement should take into account the complex relationships between the state and the economy in China, including in conduct enforcement such as tying, predatory pricing, and cartel prosecution, and regulation of abuse of administrative monopoly.Yes100%
Research Outcome
Major findings and research outcome: 1. While there are some notable divergences between the decisional practices and jurisprudence in China and those in the established jurisdictions of the US and the EU, AML enforcement is by and large consistent with the international mainstream. Take the most prominent enforcement cases in recent years, the cases against Alibaba and Meituan, for example. While there is little doubt that these two cases were politically driven, the analysis and the outcome of the two cases was hardly surprising. Both cases featured fairly run-of-the-mill exclusive dealing by dominant firms that clearly had an exclusionary impact in the market. The decisions by SAMR, the PRC enforcement authority, against these two companies were justified under conventional competition law principles. 2. While the role played by political considerations was perhaps not as apparent in the initial years of AML enforcement, there is no question that politics have come to dominate the recent enforcement agenda of the AML. However, with the recent announcement by the government on the easing of the tech crackdown, it remains to be seen whether SAMR will gain more autonomy in its enforcement activities. 3. China will need to adopt a development-stage specific and industry-specific approach to the patent-competition interface. There are some industries, such as ICT, where China is already a leading innovator globally. In these industries, the interests of both the innovators and the imitators will need to be taken into account and balanced against one and other. There are other industries, such as pharmaceuticals, where China is still very much a technological laggard and a recipient of foreign technology. The approach to the patent-competition interface in these industries is necessarily to facilitate technology transfer. The patent-competition rules will need to be crafted with these considerations in mind. 4. Whether one thinks it appropriate or not, AML enforcement already reflects the unique socio-economic and political environment of China. Given the government's views of the relationship between law and politics, it is inevitable that law enforcement is informed by political considerations. And AML enforcement also needs to reflect China's status as a middle-income developing country with a continental-sized economy and world-leading innovation capacity in some industries.
Potential for further development of the research
and the proposed course of action:
AML enforcement will continue to evolve. Digital economy and patent-competition issues will continue to remain at the forefront while other issues of interest may arise. The PI plans to continue to pay attention to future development in AML enforcement and produce further research output that builds on the research done for this project, which has given the PI a very good foundation for and understanding of AML enforcement.
Layman's Summary of
Completion Report:
This project has examined the enforcement of the Anti-Monopoly Law in China, with a special focus on digital economy issues and the patent-competition interface. The findings of the project are: (1) Politics have played an important role in driving the enforcement agenda in recent years, especially in the digital economy, and will probably continue to do so in the future. (2) While recent enforcement in the digital economy may have been politically driven, the analysis and outcome of the decisions made by SAMR, the PRC enforcement authority, were largely sound and consistent with conventional competition law principles and economic learning. While China continues to find its own voice and approach to competition law enforcement, its approach has not diverged too significantly from that in other jurisdictions. (3) China will need to adopt a development stage-specific and industry-specific approach to the patent-competition interface taking into account its technological capacity in different industries. In industries where domestic innovation is taking place, it may need to pay greater attention to protecting innovation incentives.
Research Output
Peer-reviewed journal publication(s)
arising directly from this research project :
(* denotes the corresponding author)
Year of
Publication
Author(s) Title and Journal/Book Accessible from Institution Repository
2021 Thomas K. Cheng  Regulation of the digital economy under the Anti-Monopoly Law  No 
Thomas K. Cheng  Algorithmic Collusion  No 
Thomas K. Cheng  Cartels in Hong Kong and Mainland China  No 
Thomas K. Cheng* & Julian Nowag  Algorithmic Predation and Exclusion  No 
Thomas K. Cheng  Buyer Power in the Digital Economy: The Case of Uber and Amazon  No 
Recognized international conference(s)
in which paper(s) related to this research
project was/were delivered :
Month/Year/City Title Conference Name
Singapore Algorithmic Collusion  NUS AI and Private Law Conference 
Cincinnati Algorithmic Predation  Asian Law Scholars Workshop 
Other impact
(e.g. award of patents or prizes,
collaboration with other research institutions,
technology transfer, etc.):

  SCREEN ID: SCRRM00542