Research On China’s Regulatory Framework Of Vertical Monopolistic Conduct

Vertical relations between enterprises are characterized by concealment, diversity and complexity. All kinds of vertical restrictions have two-dimensional influences on competition and consumer welfare, so the evaluation on the legitimacy of vertical monopolistic behavior is one of the core realms of the world’s antitrust theoritical debate and practical experience. It is also a challenge to the development of competition policy and anti-monopoly enforcement.Vertical monopolistic behavior mainly featured by vertical restrictions on price and non-price factors. Price restrictions are the key object for all national anti-monopoly law, while non-price restrictions attract not as much as that of price restrictions. The rules on vertical monopolistic behavior under China’s Antimopoly Law(AML) exists in the form of inheriting and transplanting European-American laws and European Union principles, which are highly-generalized and leaves plenty of space for interpretation. Vertical monopolistic behavior, which is very common in many industries in contemporary China, distorts competition, damages new business formats and harms consumers’rights of choice. This kind of behavior also makes the consumer heavily-burdened with increasingly higher price. Since the AML came into force, the anti-monopoly enforcement agencies have successfully applied the AML in a series of vertical monopolistic cases, which rectified and punished the monopolistic behavior, maintained the market competition order and protected the consumers’rights.Antimonopoly system plays an important role in assuring the decisive role of the market in resource allocation and in defining the roles of market and government in a scientific and reasonably way. A mismatch of certain degree exists because of the generalization and abstraction of the rules on vertical monopolistic behaviour on the one hand, and the legal certainty required by enterprises and administrability required by the enforcement agencies on the other, effective scrutiny of vertical monopoly has thus become a difficult and topic issue in China’s governance system that should not be ignored. At present, certain domestic scholars, who are influenced by the Chicago school of conservative economic analysis and the Leegin case in the United States in 2007, hold different views on what circumstances the antitrust enforcement agencies should start to intervene and how to intervene. They tend to rigidly copy the US practice and their study of the practice of the European Union is insufficient. The empirical research on the governance of China and market development is also insufficient.Based on the above-mentioned situations, the needs of the market, the reality of China, the author introduces public policy analysis methods from the perspectives of legal, law economic analysis, comparative analysis and empirical research. Firstly, on the study of monopoly phenomenon in the automobile market, the author provides analysis on vertical monopolistic behavior and summarizes the crux of the vertical monopoly in China. Secondly, the author summarizes the development of antitrust regulations in the European Union and the US system, and criticizes the judgment of Leegin case in 2007 by the Supreme Court of the United States. The model of "prohibition plus exemption" of the European Union offers reference for the administration of China’s vertical monopoly regulation. Thirdly, through interviews and questionnaire methods, based on the related theory of public administration, and from the perspectives of public value, authorization environment and operational capacity, the author puts forward important factors that affect regulation, constructs a solution with the core of "anti-monopoly law" and "antitrust guidelines", and provides practical analysis on China’s automobile market. Finally, with the summary of research, the author attempts to define the role of the government and the market, studies the application of the rules on vertical monopolistic behavior in e-commerce and points out the relationship between the anti-monopoly administrative enforcement and the judicial review and future research directions.Emphasizing pragmatism and flexibility, starting from difficult issues occurred in the law enforcement practice, the thesis mainly serves to strengthen the construction of anti-monopoly system in China, perfect a unified and open market system with orderly competition, and meet the need of defining the roles of the market and the government in a scientific and reasonable way. The thesis aims at promoting the capacity of anti-monopoly law enforcement in China, reducing the cost of law enforcement and compliance cost, protecting competition, and increase the welfare of consumers’.