China should extend antimonopoly rules

Xiao Xin, China Daily, Asia News Network, Beijing

It is great to be your industry's dominant leader -- unless you take advantage of that role to muscle your competitors aside and blackmail consumers.

According to the fair trade bureau of the State Administration for Industry and Commerce (SAIC), some foreign business giants are doing that in China.

A report by the bureau says some multinationals command dominant positions in their industries in China and use that position to block competition.

Among the accused are such big names as Microsoft and Eastman Kodak.

People usually admire those who stand out from market competition through fair means based on technological advantages and business strategies. That is why the antitrust case brought by the US Department of Justice against Microsoft has incurred so many controversies.

In China, however, things are different this time.

There is no law governing monopoly practices. However, the SAIC is not making a fuss. The investigation took one year to find the irregularities of some multinationals in China.

According to the report, some multinational companies use unfair pricing and deals to safeguard their monopolies.

Some sell products below cost to squeeze out Chinese competitors and others set prices in China higher than in other countries in order to make exorbitant profits.

Others buy the exclusive promotion rights of supermarkets during busy seasons, telling them to sideline other brands or face losing deals.

All this shows that those accused companies are making use of their monopoly at the sacrifice of competitors and consumers.

Existing laws lack provisions against practices that curb competition, such as selling tie-in goods, setting unfair prices to subdue competitors and price discrimination. This calls for either revision of those laws or drafting of a new unified antitrust law to keep market order and protect consumers.

China has been moving steadily toward breaking domestic monopolies, an example of which is its aviation industrial reform. Other sectors, such as power, railway and oil and gas, however, are dragging their feet in their reform.

The new legal framework, while governing multinational monopolizers, should also hold domestic companies accountable.