A Study On The Antitrust Exemptions Of Public Utilities

Public utilities were treated by traditional economics as "naturalmonopoly" industries because of their characteristics of large investmentcost, sales depending on net and pipeline and nature of commonweal. Becausenatural monopoly cannot be criticized, the public utilities should be exemptedfrom the antitrust liabilities. However, as many developed countries begun tointroduce competition to the public utilities in the latest 20 years, their natureof natural monopoly was widely doubted. Accordingly, their statue as theexemption of antitrust laws was also doubted. Nowadays, the antitrustexemptions of public utilities not only vary in the antitrust laws all over theworld but also cause wide debates. It has become an important task to studythe antitrust exemption problems of public utilities. The paper, in the first place, has discussed the legal basis of antitrustexemptions of public utilities. After that, it compares the regulations ofseveral counties and district from civil law system and common law systemon public utility exemptions. Through the comparison, it holds that theantitrust exemptions of public utilities are widely recognized by regulationsof many counties. However, the range of exemptions is getting narrow.Meanwhile, their abuse of monopoly status cannot be exempted from antitrustliabilities. Finally, based on the analysis of Chinese economic conditions inpublic utilities, the paper discusses the way to establish its own antitrustexemption system of public utilities from the aspects of substantialregulations, procedural regulations, legislation spirit and legislation style. Asa conclusion, it argues that the monopoly state of public utilities can beexempted from antitrust liabilities in China. Their restrictive conduct can beexempted from the application of antirust law under strict conditions.