|← Competition Laws||Intellectual Property Holders →|
The purposes of the law are clearly indicated in the Article one of the anti-monopoly law. The provisions in the anti trust law was made with an international and global picture in mind. Besides the local economic activities the Chinese anti-monopoly law covers foreign and international commercial conduct. The second provisions in AML clear states that this law will be applied within China’s territory and beyond. Experts fear that such provision will form a basis for elimination of domestic competition of Chinese market. The china’s antimonopoly law has placed anti trust law on the same level as IP international laws therefore there movement to global economy. The Chinese anti-monopoly law indicates that two entities will be in charge of implementation of the anti-monopoly laws. The two entities meant to implement the new law are Anti-Monopoly Enforcement Agency (AMEA) and the Anti-Monopoly Commission (AMC).
The Anti-Monopoly Commission is less powerful and its duties include creation competition guidelines and policies, enforcement of competition activities as well as evaluation of the same. On the other hand the Anti-Monopoly Enforcement Agency is more powerful. This agency has the powers to carry out investigation on business premises to determine any necessary evidences. Besides that the AMEA has powers to take action on the offender before they receive an order from the court. Three government agencies are required before the enforcement of the anti-monopoly law. The required three government agencies include the ministry of commerce (MOFCOM), the state administration of industry and commerce (SAIC) and the National Development and Reform Commission (NDRC). The three government agencies have separate and distinct responsibilities. For instance the MOFCOM is in charge of merger review while the SAIC is in charge of cases that are related to misuse and abuse of the dominant position. Finally the NDRC is responsible for all agreements that are in line with monopoly for instance fixation of price. Observers are keen to see how the trio will work because the three make the whole process to be very complicated.
Complicated systems are characterized by some conflicts or trouble in solving some common issues. After the implementation of the new Chinese law its government announced that the intellectual property courts are more powerful than the anti-monopoly law. Many have viewed this step as an opportunity for the anti-monopoly law to sort its issues with the intellectual property laws. The anti-monopoly law has some three prohibitions that are similar to the Roman Treaty referred to as E.C Treaty. In clause two of the anti-monopoly law there are several bans on monopoly agreements and among the agreements that have been banned are six horizontal relationship agreements. Others include the three agreements that govern the legalized entities with there trading companions. These types of agreements are what are referred to as vertical relationships. In the same chapter, a few exemptions have been made in relation to the duties of the above agreements. The next chapter deals with bans on market abuse by the dominant markets. In this chapter there is a list of actions that can lead to misuse of the markets dominant position.
Specifically there are seven forms of actions that normally abuse the dominant market position. These actions include;
The other details that are in this chapter include ways of procedure for determination of the dominant market position. In the next chapter of the anti-monopoly laws there is activity concentration. An example of these activities include; acquisition of power over other businesses and assets, merger business and finally the acquisition of influence over other business premises. Other details include the procedures for reporting which must be strictly followed before filling any case. It is quite evident that provision and structure of the anti-monopoly law are very similar to the European Union Treaty (E.C Treaty). The provisions in article 81 and 82 focus on the same issue of prohibition of misuse of the dominant position. On addition to that the other chapters of the E.C Treaty deals with concentration provisions.
Article 55 of the anti-monopoly law has some special provisions concerning the intellectual property. This law does not generally deals with the activities of the intellectual property but it’s concerned with the abuse of the IP rights which may result in competition elimination. Experts warn that the provisions in article 55 will have serious implications on intellectual properties that are within China. For the first time basic principles have been set between anti-monopoly law and the intellectual property rights. The provision in this section indicates that the IPRs are at the same level with the anti-monopoly laws. The owners of the IPR have been given a safe place in which they can exercise their rights with regards to the IPR provisions. The only obligation they have been given is to continually comply with the Intellectual Property Rights because the moment they will go against the provisions that IPR offers them anti-monopoly law will come in and solve whatever issues that will have been generated. The effort of the anti-monopoly in solving the conflicts that would have arisen between the two bodies is a clear indication of globalization.
The provisions of the anti-monopoly about the intellectual property rights are a step towards prevention of exploitation of the IPR rights. Therefore the AML serves as a watch dog for the IPR. Analysts commend that despite the fact that the provisions in article 55 seem to very general they are quite similar to the United States patent misuse law under the antitrust US law. The United States law puts a ban on acquisition of leverage by patent holders beyond the specified provisions of the intellectual property rights. It’s important to realize the effort of the Chinese regulators in incorporating the views and advice of the foreign investors into there anti-monopoly law. Despite that fact that the provisions in article 55 of the Chinese anti-monopoly law reflects international views on the same its generalization makes it not to directly intercept with intellectual property laws the way the US has done in there policy. The provisions under the AML lacks clear picture of how the IPR can be abused as well as the potential judgment to the law breaker. This is the reason why there are many uncertainties to the foreign investors for have large investment in China.
The main subject in the debates which have been going on in the past years is about the uncertainties in the provisions found under article 55. There are three main issues arising from the prevision of section 55. The first question to be raised by analysts is about the overall prohibition provision and the details found in article 55. It’s not clear whether article 55 is meant to create more prohibitions or whether it clarifies the purpose of the anti- monopoly law in context of the intellectual property rights. Some experts think that article 55 was written to increase prohibitions on abuse of the dormant market to the specific activities which are carried out by the intellectual property stakeholders. Normally the intellectual property usually does not confer market positions that are considered as dominant. Analysis warn that critical analysis of article 55 of the anti-monopoly law extend its prohibitions to markets which are not considered to be dominant since the intellectual property rights does not usually base its activities on dominant markets.
Other commentators are worried that the provisions in article 55 may eventually prevent intellectual property entities from participating in abusive activities like discriminatory intellectual property licensing as well as discriminative pricing. Analysts fear is that the anti-monopoly law may require the operators to have other licenses besides the IP license. They argue that by forcing the intellectual property holders to offer same treatment to other third parties is similar to creating a licensing system that is compulsory. Such system may negatively impact innovation which is greatly needed. Currently the intellectual property holders have a legal right to deny issuance of license to other firms and this is one of the core values or provisions of the IPR. This provision is used as an incentive to encourage new innovations and production in this field. If innovations will be hindered productivity will greatly reduce and as a result consumers will be adversely affected. In the long run the economy will feel the effects of not allowing innovations.
The third concern is the infringement of the intellectual property activities by the anti-monopoly. The provisions in section fifty five greatly infringes on the proceedings of the intellectual property. Multinational companies are worried that the local IP companies may use the protection in article 55 to look foreign intellectual property companies from competing with them basing on the competition restrictions in the anti-monopoly law. The local IP companies may misuse the provisions of article 55 by delaying the actions that the international companies may raise against them. For instance if a local IP company is accused of patent infringement, the company may defend itself by saying that the accused patent is a hindrance to competition and as a result this company may request the AMEA to carry out an investigation on the basis of the anti-monopoly law which are very tedious and time consuming. Experts believe that the enactment of the anti trust law paves way for lawsuits against Microsoft companies which are owned by foreign investors by the local software firms. Such law suits have already been filed in the recent past therefore foreigners are worried about there immense investments in China.
One of the companies that have been greatly targeted by this new law is the Microsoft firm which in the past ten years has really fought against the law suits brought to it by its competitors. Because of the ongoing efforts some settlements were agreed upon in the year 2001 to request Microsoft companies to share its programming interfaces with some third party companies though they were allowed to appoint a panel of three people to check whether this companies have complied to the made agreements and provisions. Despite the government movement some states commended that the provisions that were made were inadequate though that could not have hindered the court from approving the settlement that had been passed.
Microsoft has frequently been filed in Europe after being defeated in the anti-trust law. In 2008 Microsoft Company was heavily judged by the European anti trust courts for failing to meet the requirements that were passed by the court in 2004 when it lost its case. In places like Japan and Korea, the Microsoft Company has greatly been pursued by the anti-trust for violating there laws. In Korea the Microsoft Company was levied highly by the antitrust court which further demanded that they should make XP computers that do not have window messenger as well as media player windows. The experiences that the Microsoft Company has gone through form the basis of the fears of international investors who have made great investments in china. If the lawsuit that has been filed against the Microsoft Company in china goes through, then china will be considered as the fifth nation to sue Microsoft Company for violating the anti-monopoly law.