State-Initiated Restraints of Competition
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State-Initiated Restraints of Competition

Edited by Josef Drexl and Vicente Bagnoli

States influence competition in the market in various ways. They often act themselves as market participants through state-owned enterprises. They regulate markets and specific sectors of the economy such as public utilities in particular. In some instances, market regulation explicitly aims to promote competition in the market. In other instances, regulatory schemes and decisions may inadvertently distort competition or openly promote conflicting objectives and even anti-competitive goals. Furthermore, states can distort competition among firms when they act as purchasers of goods and services as well as when they grant subsidies to individual firms. This book assembles contributions by competition law scholars who present new insights on the diversity of problems and challenges arising from state-initiated restraints of competition in jurisdictions from all around the world, not only including the EU and the US, but also Latin American countries, China, India and Australia.
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Chapter 6: Abuse of administrative monopoly in China

Thomas K. Cheng


After 14 years of gestation, the Anti-Monopoly Law, China’s first comprehensive competition law, was finally passed in August 2007 and came into effect on 1 August 2008. One of the reasons for the delay was the issue of abuse of administrative monopoly, one of the most controversial competition issues in China. Some commentators believe that abuse of administrative monopoly, which refers to administrative measures or conduct that impede internal trade and restrict competition, is the most serious competition problem facing China, and the Anti-Monopoly Law would not be complete without provisions addressing it. Other commentators argue that abuse of administrative monopoly is not a genuine competition law issue and should be dealt with under administrative law or other areas of law. In fact, in the US and the European Union (EU), the equivalent of abuse of administrative monopoly is not dealt with under competition law. In the US, the issue is a constitutional matter regulated under the dormant commerce clause of the US Constitution. In the EU, the issue falls within the rubric of the articles of the Treaty on the Functioning of the European Union (TFEU) concerning the free movement principles. In fact, some other commentators believe that abuse of administrative monopoly is a systemic issue that requires a political, not a legal, solution. In the end, the first group of commentators won out and the Anti-Monopoly Law incorporates provisions that prohibit the abuse of administrative monopoly.

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