China's Anti-monopoly Law Forgiveness System Research

Illegal cartel is the most common anti-competition practice which has resulted in the most serious harm to competition. Therefore, the illegal cartel practice has always been severely prohibited by the anti-monopoly law all over the world. However, in order to evade the investigation of anti-monopoly law enforcement agencies, the form of agreements by the illegal cartel offenders are always very secretive, which makes it very difficult for law enforcement agencies to find and investigate it. As a method to detect the cartel effectively, Leniency program provides a waiver or partial waiver to the cartel member who revealing the illegal conduct automatically and providing cooperation to the authority. The program encourages members in reporting the cartel to help the authority finding and dealing with the unlawful act and to increase the rate of solving cases. Since the United States carried out the Leniency program in1978, most of the countries introduced this program in their competition law. In2007, China’s Anti-monopoly Law also studied from the United States’ experience to introduce the Leniency program. However, the abstract and principled provision affects the enforcement of Leniency program.This dissertation, basing on China’s anti-monopoly law and other relevant laws and regulations, following the research route of from theory to system then to practice and from foreign countries to China, and the dissertation uses many research methods such as interest analysis, value analysis, comparative analysis and economic analysis and so on. Analyzes the leniency policy’s practice in China, recommends some improvement after pointing out lack of legislation of the leniency program in China. The dissertation consists of four parts.The first part mainly expounds the importance of creating the leniency program. According concept the leniency policy of other countries, the leniency program only applies to illegal cartel. The leniency program is a tool of antimonopoly law enforcement system established in consideration of monopoly agreements’ secrecy and utilizing monopoly agreements’ vulnerability. The leniency program takes the mitigation or exemption of the legal responsibilities that the offender shall undertake as the incentive, and urges the offender to cooperate with the antimonopoly law enforcement agency initiatively, so as to break the monopoly agreements’ secrecy, to help the antimonopoly law enforcement agency solve the problem of law enforcement and detect in time and effectively investigate and punish monopoly agreements.The second part, interpret the leniency program of the antimonopoly theoretical level. From the economic point of view, leniency program can save law enforcement resources, and mechanism of leniency program is by distrust among cartel participants to create a "Prisoner’s Dilemma" which can force them to game for interests. From a legal point of view, the system more focused on the pursuit of the substance of the results of a fair and legal regulation means the richness and diversity, special adjustment based on the main.The third part, expounds the operation of the system safeguard mechanism and the present legislation in our country. There are some prerequisites which are essential cornerstones that must be in place before a jurisdiction can successfully implement a leniency program. First, jurisdiction’s antitrust laws must provide the threat of severe sanctions. Just facing severe legal sanctions, offenders could consider applying for leniency. Second, cartel detection rates were higher. Third, there must be transparency and predictability to the greatest extent possible, so that companies can predict with a high degree of certainty how they will be treated if they seek leniency. Compared with the provisions of leniency program in foreign countries, there are some problems in legislation of the leniency program in China. First, the leniency program is too simple and abstract. Second, individuals and trade associations who act involved in bid-rigging are not eligible for leniency. Third, the anti-monopoly law in China does not specify conditions of application for leniency.The fourth part, by learning from the advanced legislation of other countries and combining our own legal environment, this paper provides the thoughts of building the Leniency program in a whole. On the one hand, applicants of leniency should be expanded. Firstly, individuals and trade associations should be eligible for leniency. Secondly, it is more reasonable to exclude a leader from leniency programs, which is more conducive to the implementation anti-monopoly of leniency program. On the other hand, in terms of the applicable conditions, some provisions, such as the principle of the first-in-the-door, standards of evidence, obligations of cooperation with law enforcement agencies and obligations of termination of violations, should be clearly defined. Lenient treatment should be rationally set, which means that the discretion of law enforcement agencies should be limited in determining lenient treatment.