Anti-Monopoly Law to be revised; Law on Anti-telecom and Online Fraud discussed

China plans to revise the Anti-Monopoly Law as lawmakers began deliberating draft amendments submitted to the latest session of National People's Congress (NPC) Standing Committee. The draft revision aims to address major problems in the law’s current implementation, further improve the anti-monopoly system and increase penalties for monopolistic practices. Enacted in 2008, the Anti-Monopoly Law has played an important role in protecting fair competition, improving the efficiency of economic operations, safeguarding consumers’ and the public’s interests, and promoting high-quality development, said Zhang Gong, Director of the State Administration for Market Regulation (SAMR), in an explanatory note to the draft revision.

SAMR plans to hire more employees for its Beijing head office, with its anti-monopoly unit getting 18 out of 33 new staffers to be hired in 2022. Several Chinese digital platforms have also faced strict regulatory scrutiny in recent months. In October, Meituan received an antitrust fine of CNY3.44 billion, or 3% of its 2020 domestic revenue. Meituan was also ordered to immediately stop illegal activities and refund exclusive cooperation deposits totaling CNY1.29 billion to contracted vendors. In April, Alibaba was fined a record USD2.8 billion in a landmark antitrust case, the Global Times reports.

The draft Law on Anti-telecom and Online Fraud was also submitted to the session for a first review. It requires telecom and internet service providers to ensure their users are registered under their real identities. Banks or payment institutions should also verify the identities of their clients, understand their purposes for opening accounts and take risk management measures when providing related services to prevent such accounts from being used to perpetrate fraud, according to the 39-article draft law. It calls for harsh punishment of those who illegally purchase, rent or lend SIM cards, Internet of Things (IoT) cards, or online or financial accounts, adding those who engage in such behavior will face restrictions using cards or accounts, or be barred from using new services.

Data released by the Ministry of Public Security in April showed that Chinese police solved 322,000 cases involving telecom and online fraud last year, arrested 361,000 suspects, froze CNY272 billion in funds and prevented 8.7 million people from falling prey to swindlers, avoiding a total of CNY187 billion in losses. China has paid closer attention to fighting such fraud in the past few years, not only because of sizable economic losses, but also because some victims died from a heart attack or suicide, the China Daily reports.

The assertion that China's recent market regulation campaign is a “crackdown on the private sector” is baseless, Xu Shanchang, Director of the Department of Comprehensive System Reform at the National Development and Reform Commission (NDRC) said. He added that the campaign targeting uncontrolled expansion of capital and monopolies was a concrete and necessary step to boost development and is not aimed at private enterprises. The trade volume of private businesses increased by 28.5% in the first three quarters of 2021, which accounted 48.3% of China's total trade volume, a year-on-year increase of 2.1 percentage points. In addition, there are 34 private enterprises listed in the Fortune Global 500 list in 2021, five more than last year.