Antitrust Sanctioning In China: How Can The NDRC Guidelines Be Further Improved

By Jet Deng & Yannis Katsoulacos – 

Antitrust sanctioning regimes have been the subject of extensive discussion among economists and legal practitioners in recent years and the emerging economic literature has shed considerable new light on the welfare and other properties (implementability and legal certainty) of alternative regimes. In China, the confiscation of illegal gains has always been stipulated in the laws and regulations as an indispensable antitrust sanctioning method, but only few cases have been imposed by it in reality.

This article applies some of the lessons that emerge from the economic literature to the recent debate in China about how to make antitrust sanctioning more effective. While the significance of the confiscation of illegal gains has been re-affirmed by the Draft Guidelines issued by the National Development and Reform Commission, we suggest that an alternative “sophisticated revenue-based” regime, in which the penalty rate applied to revenue is based on the overcharge rate, is superior in terms of welfare, implementability and legal certainty properties.

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