Chapter III Abuse of Dominant Market Position

Article 17 Undertakings holding dominant market positions are prohibited from doing the following by abusing their dominant market positions:

(1) selling commodities at unfairly high prices or buying commodities at unfairly low prices;

(2) without justifiable reasons, selling commodities at prices below cost;

(3) without justifiable reasons, refusing to enter into transactions with their trading counterparts;

(4) without justifiable reasons, allowing their trading counterparts to make transactions exclusively with themselves or with the undertakings designated by them;

(5) without justifiable reasons, conducting tie-in sale of commodities or adding other unreasonable trading conditions to transactions;

(6) without justifiable reasons, applying differential prices and other transaction terms among their trading counterparts who are on an equal footing; or

(7) other acts of abuse of dominant market positions confirmed as such by the authority for enforcement of the Anti-monopoly Law under the State Council.

For the purposes of this Law, dominant market position means a market position held by undertakings that are capable of controlling the prices or quantities of commodities or other transaction terms in a relevant market, or preventing or exerting an influence on the access of other undertakings to the market.

Article 18 The dominant market position of an undertaking shall be determined on the basis of the following factors:

(1) its share on a relevant market and the competitiveness on the market;

(2) its ability to control the sales market or the purchasing marker for raw and semi-finished materials;

(3) its financial strength and technical conditions;

(4) the extent to which other business mangers depend on it in transactions ;

(5) the difficulty that other undertakings find in entering a relevant market; and

(6) other factors related to the determination of the dominant market position held by an undertaking.

Article 19 The conclusion that an undertaking holds a dominant market position may be deduced from any one of the following circumstances:

(1) the market share of one undertaking accounts for half of the total in a relevant market;

(2) the joint market share of two undertakings accounts for two-thirds of the total, in a relevant market; or

(3) the joint market share of three undertakings accounts for three-fourths of the total in a relevant market.

Under the circumstance specified in Subparagraph (2) or (3) of the preceding paragraph, if the market share of one of the undertakings is less than one-tenths of the total, the undertakings shall not be considered to have a dominant market position.

Where an undertaking that is considered to hold a dominant market position has evidence to the contrary, he shall not be considered to hold a dominant market position.

Chapter IV Concentration of Undertakings

Article 20 Concentration of undertakings means the following:

(1) merger of undertakings;

(2) control over other undertakings gained by an undertaking through acquiring their shares or assets; and

(3) control over other undertakings or the ability capable of exerting a decisive influence on the same gained by an undertaking through signing contracts or other means.

Article 21 When their intended concentration reaches the threshold level as set by the State Council, undertakings shall declare in advance to the authority for enforcement of the Anti-monopoly Law under the State Council; they shall not implement the concentration in the absence of such declaration.

Article 22 In any of the following circumstances, undertakings may dispense with declaration to the authority for enforcement of the Anti-monopoly Law under the State Council:

(1) one of the undertakings involved in the concentration owns 50 percent or more of the voting shares or assets of each of the other undertakings; or

(2) one and the same undertaking not involved in the concentration owns 50 percent or more of the voting shares or assets of each of the undertakings involved in the concentration.

Article 23 To declare concentration to the authority for enforcement of the Anti-monopoly Law under the State Council, the undertakings shall submit the following documents and materials:

(1) declaration in writing;

(2) explanation of the impact to be exerted by the concentration on competition in a relevant market;

(3) concentration agreement;

(4)the financial report of each of the undertakings in the previous fiscal year, which is audited by a certified public accountant firm; and

(5) other documents and materials as specified by the authority for enforcement of the Anti-monopoly Law under the State Council.

In the written declaration shall clearly be stated the titles of the undertakings involved in the concentration, their domiciles, business scopes, the anticipated date for concentration and other matters specified by the authority for enforcement of the Anti-monopoly Law under the State Council.

Article 24 In case documents or materials submitted by the undertakings are incomplete, the undertakings concerned shall supplement the relevant documents or materials within the time limit prescribed by the authority for enforcement of the Anti-monopoly Law under the State Council. If they fail to do so at the expiration of the time limit, they shall be deemed to have made no declaration.

Article 25 The authority for enforcement of the Anti-monopoly Law under the State Council shall, within 30 days from the date it receives the documents or materials submitted by the undertakings which conform to the provisions of Article 23 of this Law, make a preliminary review of the concentration declared by the businesses and make a decision whether to conduct a further review, and notify the undertakings of its decision in writing. Before the authority for enforcement of the Anti-monopoly Law under the State Council makes such decision, the undertakings shall not implement concentration.

Where the authority for enforcement of the Anti-monopoly Law under the State Council decides not to conduct further review or fails to make such a decision at the expiration of the specified time limit, the undertakings may implement concentration.