Antitrust authorities wake from slumber

Anti-Monopoly Law

After a quiet autumn, two of the authorities charged with administering China’s anti-monopoly laws have sprung into action.

On 9 November the National Development and Reform Commission (NDRC), the authority which deals with price-related monopoly issues under the PRC Anti-Monopoly Law (AML), announced that it was investigating China’s two main telecommunications service providers, China Telecom and China Unicom. The NDRC alleges that the two companies together occupy a dominant position in certain segments of the broadband telecommunications market. It also considers that the two companies may have engaged in unlawful price discrimination against broadband suppliers that lease access to their broadband networks and resell it to consumers, thus competing with China Telecom and China Unicom in the downstream market.

This is the first time action has been taken under the AML against state-owned enterprises. If found guilty, both parties could face fines of between 1% and 10% of their revenue in the past year – which for China Telecom alone could amount to a fine of RMB3 billion (US$470 million).

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