Certain Regulations on Prohibiting Anti-competitive Practices of Public Enterprises

Article 1 With a view to prohibiting the anti-competitive practices of public enterprises, these Regulations are formulated in accordance with the relevant provisions of the Law of the People’s Republic of China on Countering Unfair Competition (hereinafter referred to as the Anti-Unfair Competition Law).

Article 2 The public enterprises mentioned in these Regulations refer to the operators of public utilities, including those engaged in postal service, telecommunication, transportation, as well as the supplying of water, electricity, heat and gas, etc.

Article 3 Public enterprises should abide by the provisions of the state law, and should not impede the fair competition of other operators using their market power, nor infringe upon the legal rights and interests of consumers.

Article 4 Public enterprises should refrain from the following practices in market transaction:

1) Prescribing that users and consumers can only buy and use the attached commodities supplied by them, and should not buy and use the same type of commodities conforming to the technological standards supplied by others;

2) Prescribing that users and consumers can only buy and use commodities produced or sold by operators designated by them, and should not buy and use the same type of commodities conforming to the technological standards supplied by other operators;

3) Compelling users and consumers to buy unnecessary commodities and fittings supplied by them;

4) Compelling users and consumers to buy unnecessary commodities supplied by operators designated by them;

5) Preventing users and consumers from buying and using commodities conforming to the technological standards provided by other operators on the excuse of examining such commodities' quality and performance;

6) Refusing, suspending or reducing supplies of relevant commodities or charging excessively if the users and consumers refuse to accept their unreasonable conditions; and

7) Other anti-competitive practices.

Article 5 Public enterprises commit any of the offenses listed in the previous Article shall be ordered to stop their illegal practices and imposed a fine of more than 50,000 Yuan and less than 200,000 Yuan according to the seriousness of the case by the administrative authorities for industry and commerce in accordance with the provisions of Article 23 of the Anti-Unfair Competition Law.

Public enterprises refuse to implement the punishment decision and continue to commit any of the offenses listed in the previous Article shall be regarded as engaging in new illegal activities and be punished severely.

Article 6 If operators designated by public enterprises sell low-quality and high-price commodities or charge excessively, the administrative authorities for industry and commerce shall, in accordance with the provisions of Article 23 of the Anti-Unfair Competition Law, confiscate their illegal income and impose a fine more than double but less than three times the amount of their illegal income according to the seriousness of the case.

Low-quality and high-price commodities mentioned in the previous paragraph shall be determined by the administration authorities for industry and commerce in light of the prices and quality of the same type of commodities on the market in the same period of time and customers' complaints, or shall be determined by the administrative authorities for industry and commerce together with the relevant departments if necessary.

Charging excessively mentioned in these Regulations refers to collecting unreasonable fees beyond the normal standards and items.

Article 7 The illegal practices mentioned in these Regulations shall be investigated and settled by the administrative authorities for industry and commerce at the provincial level or the level of city with subordinated districts. The organs with the authority of investigating and settlement may entrust the administrative authorities for industry and commerce at county level to investigate the case.

Article 8 Users and consumers damaged by the illegal practices of public enterprises or operators designated by public enterprises may bring a suit to the people's court in accordance with the provisions of Article 20 of the Anti-Unfair Competition Law for compensation.

Article 9 The commodities mentioned in these Regulations include services.

Other enterprises with monopolized position stipulated by law commit practices in violation of the provisions of these Regulations shall be handled in accordance with these Regulations.

Article 10 These Regulations shall go into effect on the day of their promulgation.