Inching Towards Anti-Monopoly Law

Experts on competition and anti-monopoly law are pushing for more general legislation locally and an increase in oversight of entities to ensure fair market competition. The experts, from Mainland China and Macau, also side with the local government on its decision regarding the Uber app.
“I think the Uber case is in the government’s hands to decide. Of course, consumers will always want more options but the government will have to take into consideration the possible unfair competition to taxi drivers and taxi companies,” Wang Xiaoye, a researcher for the Chinese Academy of Social Sciences (CASS), told Business Daily on the sidelines of an event held yesterday by the Macau Economic Services (DSE) on the competition and anti-monopoly law.
The event brought to Macau two experts on the Anti-Monopoly Law of China in order to explain the effects and changes the legislation has undergone since its enforcement in 2008, including problems and prospects for its improvement and the results of its implementation.
“The stable supply of necessary goods to residents, the supervision of price fluctuation tendencies, the guarantee of the interests and rights of consumers and the promotion of fair competition in the market are issues established in the MSAR Government programme,” the DSE director stated during the opening of the event.
Competition challenge
During the event’s Q&A session attendees asked the experts about the possible effects on the market of the announcement in August by Chinese car-hailing company Didi Chuxing that it would acquire Uber China and operate it as a separate entity.
Li Honglei, Co-ordinator of the Constitutional Right and Administrative Law at the CASS, stated that the merger could occupy 80 per cent of the market, creating possible competition issues.
“I think in future we need to regulate any similar activities, but should we refuse the company merger or create the necessary conditions for its merger?” professor Li queried.
According to Professor Wang, it is normal for car-ride companies to explore these services online and due to difficulties in hailing taxis consumers end up “having no choice”.
In separate statements to Business Daily University of Macau Competition Law expert Alexandr Svetlicinii said that in Uber’s situation in Macau the “rules state that you cannot provide this service without authorisation” opining that authorities are correct in not allowing the service to operate and that any issue of unfair competition with the legal taxi operations by these services “ends up being a matter of opinion” since local law is clear on the issue.
Searching for competition law
Currently, the MSAR Commercial Code includes some special provisions focusing on preventing unfair competition in the market; however, there isn’t a general department to oversee competition law such as that in Mainland China, an issue that was mentioned by the experts.
“From what I know, Macau has a commerce law and in it there are articles made to avoid unfair competition, but maybe it doesn’t have the powers to enforce and fine [individuals committing] any infractions,” Professor Wang stated.
The Chinese law expert stated that “if there’s a market there is competition” and therefore rules are needed to avoid unfair competition.
Competition law umbrella
According to Professor Svetlicinii the territory has general rules about competition in the commercial code but if consumers want to enforce them they have to go to court and initiate the case by themselves.
“The Consumer Council, the organisation that is supposed to protect the interests of consumers, doesn’t have any authority. They can do consultation and advise but can’t help consumers in this end. We have the telecom bureau and they have some authority on monitoring competition in the sector, and we have financial and monetary authorities, too. However, we need general competition laws and specific government organisations enforcing these rules in different sectors,“ Svetlicinii told Business Daily.
He also mentioned that the Consumer Council held a public consultation in 2015, questioning people and companies’ opinion about whether they wanted competition rules. However, after its conclusion, there was only an internal consultation on how to apply any possible legislation, with no decision being made on how to enforce it.
For Svetlicinii, the territory could follow Hong Kong’s example, with the neighbouring territory having enforced a Competition Ordinance last year in order to control anti-competitive practices in all sectors of its economy.
In response to Business Daily enquiries the DSE commented that the government “is working on the preliminary preparation of the legislation of the competition law,” and since it “involves many different industries, it is necessary […] to listen to the opinions of the different stakeholders”.
State-owned vs. privately-owned
“In China there’re a lot of contradictory situations. We want a fair market but we have a lot of state companies, with water, electricity and telecommunications all being run by state companies. So how to oversee them?” Wang queried.
The Chinese competition law expert considers the Chinese market to be a special case but that the country’s market situation is improving, with sectors that used to be solely monopolised by state-owned companies – like electricity – starting to see more penetration by private companies.
For Professor Wang, anti-monopoly laws prevent illegal acts and assure the just performance of the market, being very important for companies and consumers as they keep prices down and quality up.
“State companies also have more advantages getting bank loans so we’re creating legislation so there’s more equal treatment in different sectors. In the end, its proper application depends a lot upon the condition and efficiency of the authorities’ execution,” Wang concluded.