China’s Anti-Monopoly Law Takes Effect

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Aug. 1 – China’s new anti-monopoly law is set to take effect today. The law hopes to protect market competition by regulating price-fixing and other forms of collusion, and providing for investigation and prosecution of such practices.

The law will prohibit three kinds of monopoly acts: reaching monopolizing agreements; abusing a dominant market position; and concentration of business operations that which may exclude or restrict competition.

Sources speculate that the new law will change the way business is done in the country. After more than a decade of negotiations, it will allow national security reviews of foreign investments, protection of key Chinese industries while granting authorities discretion.

Unfortunately, the government has yet to specify who will be allowed to enforce the new rules—including issues on mergers, price fixing and business agreements—or more importantly, how the rules will work in practice.

For a detailed look at the new law, refer to China Briefing’s coverage of the issue here.