China Clarifies Conditions For Monopoly Agreement Exemptions

The Chinese competition regulator NDRC has issued a set of draft guidelines to specify the general conditions and procedures for exemption from the prohibitions on monopoly agreements. The consultation period ended on 1 June 2016. The draft guidelines on monopoly agreement exemptions follow a number of other draft guidelines issued in recent months by NDRC and China's two other competition authorities, MOFCOM and SAIC. The various guidelines elaborate on and interpret a number of provisions in China's anti-monopoly legislation. Once implemented, the guidelines will contribute to a more consistent and predictable application of competition law in China.

Under China's Anti-Monopoly Law, certain agreements are exempted from the general prohibition on monopoly agreements if specific conditions are met. Examples are agreements which improve product quality or encourage R&D. Currently, parties have to make their own assessment on whether an exemption applies to