Conflict of interest

Updated: 2012-05-11 11:20

(China Daily)

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The need to smoothen the way for anti-monopoly cases is well grounded amid mounting pressure for the Chinese government to scale back State-owned enterprises and promote more competition, especially in some key industries such as oil, power, telecommunications and chemicals.

In a bid to promote the healthy development of the market economy and boost the competitiveness of enterprises, the Supreme People's Court of China issued its first judicial explanation on China's Anti-monopoly Law on May 8.

Since the law was first introduced in Aug 2008, 61 antitrust cases have been registered by the courts.

However, no plaintiff has yet won a case, mainly because of their inability to prove there was an abuse of market dominance to the anti-monopoly organs, due to the difficulty in obtaining evidence proving monopolistic behavior or abuse of market position.

The new rules, which go into effect on June 1, signify clearly that the legal authority is seeking to reduce the burden of proof on plaintiffs. However, it will still be very difficult for plaintiffs to win anti-monopoly cases because some basic rules remain unchanged.

According to the rules, defendants only need to prove their innocence after plaintiffs have proved to the courts that the company concerned has abused its market dominance. So the burden of proof is still on the plaintiffs.

The new rules say plaintiffs can now prove a defendant's market dominance by using a defendant's old and existing company statements, press releases and website information that state its leading market position.

Unfortunately, some of the administrative departments in business, pricing, commerce and finance that control crucial statistics have conflicting interests.

These departments are not only responsible for combating monopolies, they are also charged with the duty of guiding and supervising State-owned enterprises.

And although plaintiffs can now bring antitrust suits to intermediate courts before the anti-monopoly organs affirm the defendants' monopoly behavior, any anti-monopoly case is bound to meet opposition from these administrations.

In order for the new rules to achieve their aims this conflict of interest must be addressed.