Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Wednesday, December 17, 2008

Incentives and China's New Antimonopoly Law

Posted by D. Daniel Sokol

Fei Deng (NERA) and Gregory K. Leonard (NERA) discuss Incentives and China's New Antimonopoly Law.

ABSTRACT: The People's Republic of China recently enacted a new, comprehensive Antimonopoly Law (AML) that will go into effect in August 2008. As written, the AML is largely consistent with the antitrust laws of the United States and European Union, with a few exceptions. However, the AML only articulates the broad principles that will guide antitrust enforcement in China. The details of how antitrust enforcement will actually be implemented were left for future development. Thus, a number of questions remain open, some of which arise out of the idiosyncratic nature of the Chinese political and economic environment. Who will be responsible for antitrust enforcement? Will the Chinese antitrust enforcers be able to cope with administrative monopolies? Will the AML be used to disadvantage multinational companies rather than to enhance competition? To what extent will the AML and its penalties deter companies from engaging in anticompetitive conduct? Central to the answer to each of these questions are the underlying incentives - to companies and the Chinese antitrust enforcers - that have either been created by the AML, or were a motivation for developing the AML in the first place.

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