'Antitrust probes aim to ensure market transparency and rights of consumers'

China is clamping down on monopolistic activities in a wide range of industries, using its six-year-old antitrust law. But recent cases of well-known multinationals, including Microsoft Corp, Qualcomm Inc, Mercedes-Benz and BMW, have made some industry insiders wonder if the country might be using the law to suppress overseas enterprises' Chinese profits.

Will more multinationals face monopoly investigations in the world's second-largest economy? Is China's antitrust law being used properly? And will law enforcement agencies pose higher penalties for monopolistic behavior?

To get answers to those questions, China Daily conducted an exclusive interview with Xu Kunlin, head of the National Development and Reform Commission's anti-monopoly bureau, on topics ranging from the country's antitrust investigation mechanism to how the law can safeguard a fair market environment.

Q: How do you evaluate the achievements of the Antitrust Law since it was enacted six years ago, and its role in an orderly market transformation?

A: During the last six years, China has been taking several steps to improve its antitrust legislation. The anti-monopoly committee and law enforcement agencies have also worked out with several supporting regulations and guidelines to clarify and specify the various terms and for its effective implementation.

At the same time, measures have also been taken to broaden the scope of the antitrust regulations. It must be noted that the law - enforcement agencies have uncovered several important cases that had great social impact.

These investigations covered State-owned, private and foreign-funded enterprises and were impartial in approach. Most of the cases dealt with horizontal monopoly agreements, vertical monopoly agreements and abuse of dominant market position. In some instances, our investigations subsequently resulted in new regulations for an entire industry.

At the same time, it is important to note that awareness about antitrust measures is growing steadily in China, since their inception six years ago. These measures have also helped create a sense of responsibility in the whole society.

The antitrust regulations are the key components of the legal system in a market economy. In China, these regulations have helped in maintaining orderly market operations, by keeping the order of market competition and by letting the market play a decisive role in allocating resources.

Q: What are the steps taken by the NDRC's price supervision and anti-monopoly bureau for market supervision and investigation of monopolistic behavior?

A: NDRC attaches utmost importance to antitrust law enforcement. That was why the State Council decided to bring price supervision and inspection under the Antitrust Bureau in 2011.

Following this, our staff strength went up by 20 and subsequently saw the addition of 150 people to local authorities in eight provinces, including Beijing and Shanghai.

There are 12 local governments that have a price supervision and anti-monopoly bureau, while three are setting up a separate anti-monopoly bureau.

Other provinces also added extra hands. Even so, due to the heavy burden of anti-price monopoly investigations, many local authorities still find themselves shorthanded.

The NDRC has focused on training of law-enforcement personnel. There have been more than 20 symposiums featuring well-known experts, which trained more than 1,000 law enforcement officers.

The NDRC has also signed a memorandum of understanding with its counterparts in the United Kingdom, the United States, South Korea and the European Union to deepen cooperation.

Q: China's penalty for monopolistic behavior is much lighter compared with that of the EU and the US. This also raises concerns that China's supervision is weak. How do you see this problem?

A: Globally, the antitrust regime has some convergence but also several differences. Due to the different circumstances of each specific antitrust case, the supervision of monopolistic behavior cannot be simply based on the size of the penalties.

China's Antitrust Law states that businesses with monopolistic behavior will be fined 1 percent to 10 percent of their annual sales turnover. Based on the cases from the past few years, the overall penalties for monopolistic behavior are not weak, and penalties could be up to 8 percent of the annual sales. Therefore, China's regulations on monopolistic behavior are strict and the punishment severe.