• SAIC Regulations on Prohibiting Monopoly Agreements (SAIC Circular 53)
  • February 7, 2011 | Authors: Edward J. Epstein; Richard Grams
  • Law Firm: Troutman Sanders LLP - Shanghai Office
  • On January 7, 2011, the State Administration of Industry and Commerce (“SAIC”) promulgated the Circular No. 53 - Regulations on Prohibiting Monopoly Agreements (“Circular No. 53”) with respect to the implementation of the Anti-Monopoly Law.

    A “monopoly agreement” is defined in the Circular No. 53 as an agreement, decision or other concerted act that is entered into by the business operators or is coordinated by an industry association, which will eliminate or restrict competition.

    1. Business operators are prohibited from concluding the following agreements:

    a). with respect to restriction of the production or sales of goods:

    b). agreements that limit the production of goods or the production of certain types or models of goods by limiting output, fixing output, halting production, etc.; and

    c). agreements that limit the sales of goods or the sales of certain types or models of goods by means such as refusing to supply the goods, limiting the quantity of the goods placed on the market, etc.

    2. With respect to segmentation of the sales market or raw materials procurement market:

    a). agreements that divide up sales territories, sales counterparties or the types or quantities of the goods sold;

    b). agreements that divide up the procurement territory for, or types or quantities of, basic materials such as raw materials, semi-finished products, parts and components, and related equipment; and

    c). agreements that divide up the suppliers of basic materials such as raw materials, semi-finished products, parts and components, and related equipment.

    3. With respect to restriction of the purchase of new technologies or new equipment or the restriction of the development of new technologies or new products:

    a). agreements that restrict the purchase or use of new technologies or new production processes;

    b). agreements that restrict the purchase, lease or use of new equipment;

    c). agreements that restrict the investment in or research and development of new technologies, new production processes or new products;

    d). agreements that provide for a refusal to use new technologies, new production processes or new equipment; and

    e). agreements that provide for a refusal to adopt new technical standards.

    4. With respect to a joint refusal to trade:

    a). agreements that provide for a joint refusal to supply or sell goods to certain business operators;

    b). agreements that provide for a joint refusal to procure or sell the goods of certain business operators; and

    c). agreements that jointly require certain business operators that they may not trade with competing business operators.

    SAIC Circular No. 53 overlaps with the NDRC Regulations and some types of monopolistic pricing behaviors may be subject to the jurisdiction of both the NDRC and the SAIC.