Anti-monopoly is not 'selective law enforcement'

The Chinese government is currently conducting anti-monopoly investigations into several transnational corporations like Audi, Chrysler, Benz, Microsoft, and Qualcomm. As is the case with anti-corruption, anti-monopoly needs to catch "tigers" as well as "flies". Fearing they may lose their privileges, some transnational corporations think this round of investigation "too strict". The current round of investigations shows that anti-monopoly will become the norm in China, and foreign corporations will need to adapt accordingly.

This round of investigation covers foods, medicine, telecommunication, internet and automobiles, all of which are closely related to the daily life of ordinary people. While some say the investigation aims to force foreign companies to reduce their prices, its true intent is to promote fair competition.

What is anti-monopoly? People tend to regard banks, Chinese petroleum companies and telecommunications as typical monopolized industries in China. However, this round of investigations targets transnational corporations. Some claim that law enforcement departments are deliberately targetting foreign companies. But developed countries also implement anti-monopoly policy to prevent big companies from abusing a dominant position in the market and allow emerging enterprises to enjoy equal development opportunities. Internationally, anti-monopoly laws usually consist of agreements prohibiting monopoly, prohibition of abusing dominant market status, and regulations on the concentration of business operators. In principle, China's anti-monopoly laws are in accord with those in U.S. and Europe. The laws target companies that abuse their status in the markets.

Anti-monopoly regulates competition. At present, China's national enterprises are not familiar with these rules. However, transnational corporations are experienced in fighting organizations conducting anti-monopoly investigations. Therefore, they are more cunning than Chinese corporations. For instance, in the case of the price fixing between Mao Tai and Wu Liangye, two prestigious white spirits in China, these two corporations unveiled their discussions to the public. Transnational corporations keep their negotiations informal, leaving no evidence. Such conduct is a target of this round of investigations.

China currently has Memorandums of Cooperation with the U.S., the European Union, South Korea and other countries, in order to better cooperate in the area of anti-monopoly. Numerous transnational corporations listed by Chinese government have also been investigated by other countries for monopoly. Microsoft was fined in the U.S. and Europe, and Qualcomm was subject to anti-monopoly investigations in Europe and South Korea.