Chinese Law Prof Blog

Editor: Donald C. Clarke
George Washington University Law School

Friday, February 20, 2015

First successful case against administrative monopoly

The Feb. 16th isue of the Legal Daily carries three articles (see below for links) about administrative monopolies, prompted by the recent decision by the Guangzhou Intermediate People's Court against the Guangdong Department of Education for requiring the use of a particular brand of software in a contest. This was not only the first court victory against an administrative monopoly; it was the first time such a case had even been accepted by courts and made it all the way to trial.

Among the issues in the case were (1) the role of expert witnesses (they were allowed), and (2) whether the designation in a notice issued by the defendant of a particular piece of software constituted concrete administrative action or abstract administrative action. (Under the Administrative Litigation Law (ALL), one can sue for the former but not for the latter, but since this case was not brought under the ALL, I'm not sure why the distinction was considered important.)

The court found that the defendant's acts were indeed concrete administrative actions and that the defendant violated Art. 32 of the Antimonopoly Law (AML), which states:

Administrative agencies and organizations authorized with administrative powers of public affairs by laws and regulations  shall not abuse their administrative powers by limiting, or limiting in disguised form, organizations or individuals by requiring them to deal, purchase, or use commodities provided by designated undertakings.

The reports don't say, however, what (if any) remedy the court provided beyond a mere declaration of illegality. Article 51 of the AML deals with the issue of remedies for administrative monopolies vaguely, but on one point it's pretty clear: courts can't order a remedy. The basic remedy is to hope that the offender's administrative superior will make it come into line:

The administrative agencies or organizations authorized with administrative powers of public affairs by laws and regulations shall be admonished by the superior authorities if they abuse their administrative power to eliminate or restrict competition; the individuals who are directly responsible shall be punished in accordance with the law.

This article shall not apply to cases in which other administrative regulations or laws provide for the regulation of the abuse of administrative power.  The Anti-monopoly Enforcement Authority may propose suggestions to deal with in accordance with the law to the superior authorities.

(Translation credit for the AML provisions above: T&D Associates)

Here are some relevant reports:

https://lawprofessors.typepad.com/china_law_prof_blog/2015/02/first-successful-case-against-administrative-monopoly.html

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