Illegality Affirmation and Legal Governance of Price Monopoly Agreements in the Automotive Industry
CHEN Bing[1]
［Abstract］ In recent years, various forms of price monopoly agreements in the automotive industry have aroused widespread concern by all parties．National and local anti-monopoly law enforcement agencies have taken prompt action and have effectively limited the illegal acts of eliminating and restricting competition, which plays a positive role in restoring free and fair competition in the automotive market and in safeguarding the legitimate interests of consumers．Articles of Anti-monopoly Law of the People's Republic of China are not explicit in terms of application of law, leading to confusion in illegality affirmation of price monopoly agreements in the automotive industry and therefore, automotive industry operators are confronted with an institutional obstacle on how to manage industry norms and competition regulations at the same time．With these in mind, in order to enforce the legal governance of the current illegal behavior in the domestic automotive industry regarding price monopoly agreements, we must update our anti-monopoly law enforcement ideas (from deterring punishment to compliance guidance), and design well-directed and practical solutions from aspects of the adjustment between industry norms and competition regulations (attention paid to the balance between industry development and competition), of optimization of the anti-monopoly law enforcement (reasonable enforcement and avoidance of sweeping law enforcement) and of strengthening local anti-monopoly law enforcement (respect for legitimacy and rationality of local law enforcement).
［Key words］ Automotive Industry, Price Monopoly Agreements, Per Se Illegal Presumption, Reasonable Rules, Legal Governance
Automotive industry is one of the pillar industries in China's economy．Since 2011, China's anti-monopoly law enforcement agencies have launched the anti-monopoly investigations into quite a number of Americans, European and Japanese automobile manufacturers and dealers.[2]The investigation shows that, the price monopoly agreements are prevalent in China．The nature and illegality affirmation of price monopoly agreements are considered the first and foremost issue that our anti-monopoly law enforcement agencies need to address at present during their anti-monopoly investigation process．Only under the premise of affirming the illegality of price agreements through legitimate procedure can the anti-monopoly law enforcement agencies impose limitations and penalties on the behaviors that eliminate and restrict competition in the automotive industry and make effective legal governance of rampant price monopoly agreements．Theoretically, the purpose of promoting anti-monopoly law enforcement through the legal agencies is not to simply punish the illegal competition behaviors, but to guide operators' market-oriented competition by rules and regulations through deterring and punitive law enforcement activities[3], so as to realize the multiple objects of maintaining free and fair competition in the market by anti-monopoly law enforcement, of promoting the sound development of market-oriented economy, and of ensuring social public benefits and consumers' interests.[4]Besides the hard nut of affirming illegality of price monopoly agreements in the automotive industry, the focus of this thesis is to advocate the revisit of the purpose and value of anti-monopoly law enforcement, from punitive sanction to governance of law compliance, from maintaining free and fair competition in the market to equal stress on both fostering and reenergizing operators' competitive power and ensuring free and fair competition.[5]
[1] CHEN Bing, professor of the School of Law, Jilin University and the Institute of Asia-Pacific Law of Seoul National University．The thesis is funded by China Postdoctoral Science Foundation, the seventh batch of special funding projects (No.: 2014T70274), a partial achievement for the research on Transnationalization and Internationalization of Anti-monopoly Law Enforcement funded by Humanities and Social Science Youth Project of Ministry of Education (No.: 10YJC820003) and a partial achievement funded by International Scholars Exchange Funding Project of South Korean Higher Education Consortium (2015-2016).
[2] National Development and Reform Commission spokesman Li Pumin stated at the press conference that anti-monopoly probe toward motor vehicles and parts has caused the social impression that the anti-monopoly law enforcement was oriented toward foreign companies．The reason may be that the law enforcement agencies have recently centralized “disclosure of law enforcement information”．However, in fact, the reason is that probed Mercedes Benz, Chrysler, etc．are luxury car manufacturers, and domestic enterprises in the market find it difficult to compete with them．The recent anti-monopoly probe has nothing to do with whether or not it is a foreign company; instead, it is just a normal anti-monopoly law enforcement activity．See Qiu Rui, Chinese Enterprises Might Bear Anti-monopoly Pressure, Phoenix Weekly, No.26, 2014.
[3] Research on the implementation of the anti-monopoly law, see Yu Ling, From Deterrence to Compliance Guidelines—New Trends in the Implementation of Anti-monopoly Law, Peking University Law Journal, No.6, 2013.
[4] Article 1 of Anti-monopoly Law of the People's Republic of China clearly stipulates: “This Law is enacted for the purpose of preventing and restraining monopolistic conducts, protecting fair competition in the market, enhancing economic efficiency, safeguarding the interests of consumers and social public interest, promoting the healthy development of the socialist market economy.”
[5] Concerning the discussion on anti-monopoly law enforcement goals and protection of legal interests, scholars have affirmed that the function of protecting and promoting operators' competitive power serves as the independent value of anti-monopoly law enforcement．(See Chen Bing, Application of the Rule Regarding the Abuse of a Dominant Position in Anti-monopoly Law of the People's Republic of China, Legal Science, 2011(1))．We have discussed that the anti-monopoly law or competition law has the function to nurture and boost operators' competition power, maintain the effective competition mechanism in the market, protect non-monopoly operators (or efficient competitors), and realize real distributive justice as “fair”．It aims at the revision of the formal private ownership freedom and contract freedom and realizing “fair competition”on the basis of protecting the social and economic weak (realizing distributive justice from the principle of social law) (See Tanimune Akinobu, Yi Congkkuan, Economic Law, trans．by Yoshida Keiko, Law Press·China, 2010, p.140)．This is not entirely consistent with the simple pursuit of free competition as the aim of anti-monopoly law, but not contradictory to it．Protecting the order of free competition does not rule out protecting competitors; instead it can promote the protection of law-abiding competitors (see Wu Hongwei, Tan Yuan, Protecting Competition Instead of Competitors?—The Retrospection on the Mainstream Views of Anti-monopoly Law, Northern Legal Science, 2013(4).