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Draft Amendment of Anti-monopoly Law Intends to Clarify Applicable Rules of Platform Economy

In the second draft of the amendment to the anti-monopoly law, enforcers has clarified the intention to restrict the operators from taking advantage of data and algorithms, technology, capital and platform rules to exclude or restrict competition. The draft also requires the anti-monopoly law enforcement agencies of the State Council to improve the classification and grading examination system of concentration of operators, and strengthen the examination of concentration of operators in important areas involving the national economy and people's livelihood according to law. 

According to the latest practice of anti-monopoly law enforcement system reform, the draft made it clear that "the anti-monopoly law enforcement agency of the State Council" shall be the law enforcement department. It also clarified the specific applicable rules of anti-monopoly related systems in the field of platform economy, improved the "safe harbor" rules of monopoly agreements, as well as the investigation and handling procedures of the concentration of operators that fail to meet the reporting standards, and put forward specific requirements for the examination of concentration of operators. 

On issue of anti-monopoly in the platform economy, the draft further clarifies the applicable rules of anti-monopoly related systems in the platform economy. There includes, for instance, the general expansion provisions, where operators shall not use data and algorithms, technology, capital advantages and platform rules to engage in monopolistic behaviors to exclude or restrict competition, but as well detailed stipulates on types of monopolistic behaviors, such as special clauses in the chapter of abuse of market dominance. 

The draft also provides stipulates with regard to monopoly agreements. 

First, the rule of "safe harbor" has been added, and monopoly agreements have been concluded between operators and counterparties, excluding horizontal monopoly agreements concluded between competitors. If the market share of the operator is lower than the standards and conditions stipulated by law, the law will not prohibit it, which is the "safe haven" rule of monopoly agreement. 

Secondly, provisions are added so that operators shall not organize other operators to reach monopoly agreements or provide substantial help for other operators to reach monopoly agreements, that is, in practice, some operators do not directly participate and do not conclude monopoly agreements themselves, but organize others to formulate monopoly agreements, which hinders fair competition. 

Thirdly, the identification rules of vertical monopoly agreements have been improved. For the vertical monopoly agreement reached between the operator and the counterpart of the transaction, if the operator can prove that it does not produce the effect of excluding or restricting competition, the law will not prohibit it. 

With regard to the concentration of operators, the aforementioned draft adds the investigation and handling procedures for the concentration of operators who fail to meet the reporting standards. For the concentration of operators who fail to meet the reporting standards but have evidence to prove that they have or may produce the effect of excluding or restricting competition, the anti-monopoly law enforcement agency under the State Council may require the operators to make declaration. If the operators fail to address the declaration, the anti-monopoly law enforcement agency shall conduct an investigation according to law. In addition, the situation and notification requirements for the termination of the examination period of concentration of operators have been added, and the examination procedures of concentration of operators have been standardized.