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Q&A Regarding China's " The Anti-Monopoly Law of the People's Republic of China"(3)

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Q: Which monopoly agreements are prohibited for business operators to enter into with their trading counterparts?
A:
  1. Fix the resale price of the goods to a third party;
  2. Set a minimum price for reselling goods to a third party;
  3. Other monopoly agreements as determined by the anti-monopoly law enforcement agency of The State Council.
Where the business operator can prove that the agreements stipulated in the first and second items of the preceding paragraph do not have the effect of excluding or restricting competition, they shall not be prohibited. Where an operator can prove that its market share in the relevant market is lower than the standard prescribed by the anti-monopoly law enforcement agency of The State Council and meets other conditions prescribed by the anti-monopoly law enforcement agency of The State Council, it shall not be prohibited.

Q: What behaviors that abuse a dominant market position are prohibited for business operators with a dominant market position?
A:
  1. Selling goods at unfairly high prices or purchasing goods at unfairly low prices;
  2. Selling goods at a price lower than the cost without justifiable reasons;
  3. Refusing to conduct transactions with the counterparty without justifiable reasons;
  4. Without justifiable reasons, restricting the counterparty to conduct transactions only with it or only with the operator designated by it;
  5. Tying the sale of goods without justifiable reasons, or attaching other unreasonable transaction conditions during the transaction;
  6. Without justifiable reasons, imposing differential treatment on trading counterparts with the same conditions in terms of transaction prices and other transaction conditions;
  7. Other acts of abusing a dominant market position as determined by the anti-monopoly law enforcement agency of The State Council.

Q: What does the term "dominant market position" as used in the Anti-Monopoly Law of the People's Republic of China refer to?
A: It refers to the market position in which an operator has the ability to control the price, quantity or other transaction conditions of goods in the relevant market, or to prevent or affect the entry of other operators into the relevant market.

Q: What factors should be relied upon to determine that an operator has a dominant market position?
A:
  1. The market share of the operator in the relevant market and the competitive situation in the relevant market;
  2. The ability of the operator to control the sales market or the raw material procurement market;
  3. The financial and technical conditions of the operator;
  4. The degree to which other business operators rely on this business operator in transactions;
  5. The ease or difficulty for other business operators to enter the relevant market;
  6. Other factors related to the determination of the dominant market position of the operator.

Q: Under any of the circumstances, it can be presumed that an operator has a dominant market position?
A:
  1. Where an operator's market share in the relevant market reaches one half;
  2. The combined market share of the two business operators in the relevant market reaches two-thirds;
  3. The combined market share of the three business operators in the relevant market reaches three quarters.
Where any of the circumstances as prescribed in the second and third items of the preceding paragraph exists and the market share of one of the operators is less than one-tenth, it shall not be presumed that such operator has a dominant market position. Where an operator is presumed to have a dominant market position and there is evidence to prove that it does not have a dominant market position, it shall not be recognized as having a dominant market position.

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