China’s amended Anti-monopoly Law officially came into effect on Monday, which government officials and industry experts said will drive the country’s fair competition and innovative development and further boost the competitiveness of its massive domestic market.
The enacted law underwent revisions on matters concerning the platform economy, the concentration of operators and fair competition. It clarifies, for the first time, that platform operators with clear market dominance shall not abuse such leading positions through data, algorithms, technology or platform rules.
“The Anti-monopoly Law made special provisions for supervision over the digital economy, and encouraging innovation has been adopted as a goal. With the law, the country aims to balance competition and innovation to give full play to the innovative strength of large enterprises, and meanwhile effectively stimulate the innovative vitality of small and medium-sized enterprises,” said Gan Lin, deputy head of the State Administration for Market Regulation, in a People’s Daily article.
On the other hand, the country is also striving for an anti-monopoly legal system not only based on the country’s own development, but also aligned with international high-standard rules and systems, Gan said.
“The country hopes to enhance the attractiveness of China’s super-large market with fair competition rules, attract more international resources and entities to China, and create more growth opportunities for the nation’s economic development,” she added.
Another major revision to the Anti-monopoly Law is the introduction of a safe harbor mechanism, which is basically an exemption for certain behaviors that do not in principle violate established rules.
Under the revised law, when an operator and counterpart reach an agreement that could result in a monopolistic situation, if the former can prove that its market share in the relevant market is lower than the standards set by antitrust authorities, the agreement will not be prohibited.
Zhong Chun, an associate professor at the Intellectual Property Research Institute of Jinan University, said that the safe harbor mechanism is actually an international practice and economies like the European Union have used such rules for years.
“Such improvements will boost market expectations for operators and allow businesses, especially small and medium-sized enterprises and startups, to conduct their business activities in a safer range and avoid being penalized,” she said.
In a news briefing last week, Gan from the SAMR said that China now ranks among the world’s top three anti-monopoly jurisdictions, together with the United States and the EU.
Gan pointed out that the country has signed cooperation documents with 35 countries and regions including the US, EU, Russia and Japan, and has scaled new heights by participating in global competition governance for over a decade.
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