A 2004 survey by the Fair Trade Bureau of China's State Administration of Industry and Commerce (SAIC) concluded that Microsoft Windows had a 95 percent market share in the country. Kodak, the report said, had also obtained a dominant position with 50 percent of the film market. These companies and other multinationals, the authors concluded, frequently used their positions to curb or restrict competition.
But SAIC couldn't do anything about its findings. That's because--outside the M&A area--China had no meaningful antitrust laws. However, all that will change as of Aug. 1 with the enactment of the Anti-Monopoly Law of China (AML). Much like the antitrust legislation of developed countries, the law prohibits monopoly agreements, abuse of dominance and concentration.
Because of its level of fragmentation, looking at China's current bare-bones antitrust infrastructure doesn't offer much insight either. The National Development and Reform Commission presides over monopoly agreements; SAIC regulates the monopolistic behaviors of public utilities; and the Ministry of Commerce (MOFCOM) oversees mergers and acquisitions.
"Industry rumors suggest that all three agencies will be involved in implementing the AML," Huang says. "But that doesn't really help us in understanding the powers and workings of the Anti-Monopoly Committee."
Unfortunately, on the substantive front, things aren't much better.