Constitutional Analysis Of Competition Policy

The China's Anti-monopoly Law provides that the Anti-MonopolyCommission's primary responsibility is to study and draft related competition policies.However, for a long time there were only practices of competition policy but no ideaof competition policy in China. Moreover, for the reason that the concept ofcompetition policy appears in the Anti-monopoly Law, legal practitioners andscholars are inclined to regard competition policy merely as competition law, whileignoring that system reform and competition advocacy are also important parts ofcompetition policy, especially for countries in transition such as China. In fact,competition policy has been an important part of competition law study all around theworld. The difficulties and obstacles encountered during the enforcement of China'sAnti-monopoly Law further show the need for competition policy study. On the otherhand, once we research competition law in the height of competition policy, we haveto consider the overall authorizing environment of competition policy, especially theconstitutional environment. This is not only because competition policy's goals andoperation are closely related to a country's constitutional mechanisms andconstitutional culture, but also because the enforcement of competition policy relatesto the separation of powers between enforcement bodies (including horizontalseparation of powers and vertical separation of powers), the security and balance offundamental rights in the Constitution (such as freedom of petition and freedom to dobusiness), and the interpretation of economic terms in the Constitution (such as theterms related to economic system, state-owned economy and ownership).Therefore, only within the framework of competition policy, we can recognizethe limitations of competition law and seek improvement method. Similarly, if we donot study competition policy in the height of constitutionalism, it is hard to judge if the competition policy, as an important part of economic policies, is in line with theneed of constitutional democracy. On this basis, this paper attempts to build afundamental constitutional analysis framework for the competition policy. By treatingthe competition policy as analysis object and the constitutionalism as analysisperspective, this framework looks at competition law within the scope of competitionpolicy and analyzes competition policy's birth, goals, enforcement and advocacy fromthe perspective of constitutionalism.The research to the driving force of the Anti-monopoly Law finds that, theintroduction of competition law may be affected by multiple factors, but what kind ofcompetition law was introduced is mainly influenced by political factors. The researchto the operation track of the Anti-monopoly Law finds that, despite the law oftendeviated from the established track, it still followed a relatively fixed trajectory anddeviated and returned under an intermediate point such as pendulum. The abovephenomenon confirms the political game theory in the constitutional perspectivewhich regards competition policy as a self-development political game process (thepolitical interaction between producers and consumers). Under this theory, thebalance of game powers and the differences of authorizing environment directly resultin the content of competition law and its running track. However, it is noteworthy thatthe highlight of competition policy's political factors is not to negate the economic orsocial basis that give rise to competition policy. On the contrary, it is to re-arouse theconcern of political factors and game forces on the basis of recognizing theimportance of economic factors and social factors.There are mainly three views in theory with regard to the goals of competitionpolicy. The first theory believes that the efficiency is the only goal of competitionpolicy (the efficiency doctrine). The second theory considers that the goals ofcompetition policy are diverse but all can be summarized as public interest (the publicinterest doctrine). The third theory deems that the consumer welfare is the ultimategoal of competition policy (the consumer welfare doctrine). In practice, the latter twohave become mainstream views in many countries. Nevertheless, there are still manyeconomists and eminent scholars advocate the efficiency doctrine of competitionpolicy. This is not a simple academic dispute, but implies an important academicconcern. Supporters of the efficiency doctrine are trying to establish a unified goal toprevent competition law enforcement influenced excessively by politics and avoidcompetition policy subject to the adverse effects of other economic and social policies. However, as one of public policies, competition policy will inevitably become theobject of game launched by multi-stakeholders. Under the constitutional perspective,the disputes of goals are concrete manifestation of policy competition and the diversegoals are the practical needs of a democratic society. It can be understood as ablending of the ideal and reality by defining the goals of competition policy asconsumer welfare. Because anyone can be consumers, such a treatment will achievethe demands of a single goal being away from political interferences and meet thepractical needs of multiple stakeholders.The enforcement of competition policy involves not only vertical separation ofpowers (central enforcement and local implementation), but also horizontal separationof powers (public enforcement and private enforcement). The vertical separation ofcompetition policy enforcement powers needs to consider how to stimulate the localenforcement of competition policy while at the same time preventing the localprotectionism of competition policy enforcement. The authorizing environment(especially the form of state structure) of a country determines the decentralizedmodel of powers and if the localization of competition policy can be effectivelycurbed. For China, it is an ideal solution to establish a central law enforcement systemand central judicial system for competition policy enforcement. However, under thecurrent authorizing environment, it is a more informed choice to improve current localauthorization mechanisms of competition law enforcement and strictly control thelocalization of judiciary system. The horizontal separation of competition policyenforcement powers is not only related to the separation of powers between publicenforcement and private enforcement, and also involves the internal separation ofpowers among public enforcement bodies. The public enforcement responsibilities ofcompetition policy are share by multiple departments all over the world and the meansof public enforcement are plentiful. It will not only generate efficiency advantages butalso checks and balances advantages to let competition authorities and industryauthorities share the responsibility of competition policy enforcement. Similarly,private enforcement is not just a supplement of public enforcement, but an alternativedecentralization mechanism. Pure public enforcement or private enforcement can notbe adequate to the effective enforcement of competition policy. The division andcooperation of public enforcement and private enforcement constitutes an effectivecompetition policy enforcement system.The competition law regulation to the government anti-competitive conducts involves constitutional control of government powers and protection of fundamentalrights. Meanwhile, the competition law regulation to state-owned enterprises relates tointerpretation of economic terms in the Constitution and the protection of economicfreedom and economic democracy. As the product of the combination of public powerand private rights, the government anti-competitive conducts are originated from thedemand of asking the government to intervene the market and the exercise of petitionright by private sectors (in particular interest groups) under specific authorizingenvironment. Therefore, the premise of understanding and regulation of governmentanti-competitive conducts is to concern both the government behaviors (includinglegislative act, law enforcement and judicial decisions) and private petition behaviors.The former to obtain legitimacy must obtain the explicit authorization of the law, doesnot infringe the fundamental constitutional rights and meet the needs of the publicinterest. The latter to obtain legitimacy needs to strike a balance between differentconstitutional rights (such as petition freedom and business freedom). However, inany case, the judgment of whether the government anti-competitive conducts areproper should be based on the comprehensive study of market effects rather than thereality that relative powers or rights are legal in form and exercised according to legalprocedures. Further, the regulation of government anti-competitive conducts can notrely solely on administrative law and competition law, but needs to actively seek themeans of competition advocacy in order to gradually alleviate and eliminateinstitutional arrangements that are not conducive to free competition. In addition,state-owned enterprises in theory are regarded as special public institutions. But inChina, state-owned enterprises are always deemed as a tool for profit maximization,which makes them obtain unfair competitive advantages and possess more motivationand capacity to carry out anti-competitive behaviors. In this case, competition law cannot be applied equally to all enterprises. Moreover, the economic system terms andthe state-owned economy terms in the Constitution have inherent conflicts with theAnti-monopoly Law, which makes the understanding and application of constitutionalprovisions become important factors that affect the enforcement of competition policy.In this context, the objective of the state-owned enterprises reform should berepositioned to build non-profit public law enterprises and to establish a constitutionalgovernance structure for state-owned assets under which the legislature rather than theexecutive exercises the ownership of state-owned assets on behalf of all people. At thesame time, it is proposed that the competitive neutrality policy being introduced to eliminate the competitive advantages of state-owned enterprises due to the ownershipand the Constitution being explained in favor of competition policy.Competition advocacy is an alternative way to achieve the goals of competitionpolicy except in addition to competition law enforcement. It aims to create a socialconsensus that competition is good for economy by affecting the government and thepublic through means such as competition publicity, competition advices, competitivereview and competitive evaluation. However, the effectiveness of competitionadvocacy depends a lot on the authorizing environment of a country, especially thestatus of competition policy among a country's economic policy system, the supportof national leaders to competition policy, the clear requirements of competitionadvocacy in relevant laws and policies and the available resources and capacity of thecompetition advocacy authorities. In the case that China's overall authorizingenvironment is not very conducive to the development of competition policy, it isextremely important to confer the competition authorities (including industryauthorities possess the power to enforce competition laws) powers to carry outcompetition advocacy functions in legislation. At the same time, it is also a viablepath for China to promote competition policy through ways of enforcing competitionlaws, enhancing the capacity of law enforcers and encouraging the development ofsocial organizations and consumer organizations to foster the social forces competingwith monopoly powers. Nevertheless, it should be clarified that the focus ofcompetition advocacy in China is the government itself because of the specialgovernment-led model of economic development. Corresponding to this, theobjectives of Chinas competition advocacy is to promote the establishment ofcompetitive advisory system and competitive review system.In short, the constitutional analysis framework of competition policy providestwo perspectives: the one is to see competition policy from the perspective ofauthorizing environment (especially the constitutional environment); the other is toanalyze competition policy from the perspective of constitutional ideas. By analyzingcompetition policy from the two perspectives, some different conclusions can beobtained. These two perspectives and their conclusions are practically meaningful inthe following two aspects: First, for the academia, the unrealistic idealism can beabandoned and consider how to maximize the realization of public values ofcompetition policy under specific authorizing environment; for law enforcers, therigid realism can be abandoned and consider how to promote progressive changes of authorizing environment by paying attention to public values of competition policyand enhancing law enforcement ability.