A discussion on how to recognize and regulate the abuse of dominant market position in antitrust law

The three basic pillars of antitrust law are the prohibition of abuse of dominant position, the control of joint restrictive behavior of competition and the control of excessive concentration of economic power. Among them, the supervision and control of enterprises occupying a dominant market position and their behaviors is an important entity area of antitrust laws in countries around the world, and is one of the core contents of antitrust laws. The author intends to talk about his own rough understanding of the identification and regulation of the abuse of dominant market position.

I. Market Dominate Position Market Dominate Position (Market Dominate Position), also known as the market control position, Germany, the European **** body, etc. on the definition of its: enterprises or business organizations in the market to achieve or have a state in the state of the enterprise or business organizations in the relevant product market, geographic market, as well as the time market, have the ability to determine the product output, price, price, and the market, and have the ability to determine the product output, price, and the time market. It is defined as a state of affairs in the marketplace in which a firm or a combination of firms has the ability to control the production, price and sale of a product in the relevant product market, geographic market and time market [1]. The concepts used in the U.S. antitrust laws are "Monopoly Power" or "Market Power"; the corresponding concepts used in Japan's Monopoly Prohibition Law are "Monopoly Status" and "Monopolistic Status". The corresponding concept used in Japan's Anti-Monopoly Law is "monopoly status"; the concept used in Taiwan's Fair Trade Law is "monopoly". Different countries have the same understanding of this: an operator or several operators in a specific relevant market has a certain degree of advantage or power, can use this power to "control" or "dominate" the market, and thus have a significant impact on competition in the market [②]. influence on competition in the market [②]. Market dominance has a variety of forms of expression, including the following: exclusive (Monopoly), quasi-exclusive (quasi-Monopoly), absolute advantage (Sufficient Market Dominance Power) and oligopoly (OligopolySituation) and so on. For the definition of market dominance, different criteria have been discussed in western countries, such as market outcome scheme, market behavior scheme and market structure scheme [③]. Among them, the market structure criterion is centered on market share, which is highly operational and has become the core criterion for defining market dominance [4]. However, the market share can only indicate the competitive strength of the enterprise at that time, but cannot determine the market position of the enterprise in the future. The judgment of whether the enterprise concerned has a dominant market position should be based on the ****same evaluation of relevant factors such as the enterprise's financial strength, the degree of vertical integration of the enterprise and its market behavior. The method of determining a dominant market position includes two main aspects: first, defining the relevant market, and second, determining the enterprise's dominant power. 1. Define the relevant market [⑤], that is, from the product market, regional market and time market and so on different dimensions to define the enterprise engaged in certain business activities, market competition in the field or scope. Defining the relevant market is the first step in determining the dominant market position, and it is also one of the important steps for the antimonopoly enforcement authorities to recognize the dominant market position. 2. Determining the dominant capacity of an enterprise, i.e., specifically determining whether an enterprise has a dominant market position in a particular relevant market, the core indicator of which is the market share of the enterprise. Since market share determines the existence of exclusive power to a large extent, it is crucial to determine the exact figure of the market share of the suspected enterprise in the process of handling antitrust cases. Market share is usually determined by dividing the defendant's sales in the relevant market by the total sales in that market, multiplied by a percentage. The formula is: Sales of a particular business [vi] Market share = -------- ---- x 100% Total sales in the relevant market The greater the market share of the suspected dominant firm, the greater the likelihood that it will exercise market power. An enterprise with a market share of less than 30% is unlikely to have the ability to reduce output or raise prices significantly above competitive levels. Conversely, if an enterprise has a market share of 70% or more and there are significant barriers to entry, it is very likely to exercise market power. Definition of Abuse of Market Dominance Market dominance itself is not ipso facto unlawful, and antitrust laws restrict or prohibit such dominance only when it destroys competition due to abuse and when it is obtained and maintained by an enterprise in violation of the law. The general definition of "abuse" is best represented by Article 86 of the EFTA [7]. In China, there are different views in the theoretical circles. Some scholars believe that: "abuse of dominant market position behavior, refers to have a dominant position of the enterprise abuses its market power, and in a certain field of transactions to substantially restrict competition, contrary to the interests of the public ****, should be condemned by the antitrust law behavior" [⑧]. Dr. Cao Soldier, a doctor of law, pointed out that "in determining the existence or non-existence of the abuse of monopoly power, the dominant market position plays a crucial role ...... As for 'abuse', if not specified, it has at least two meanings, one of which is to mean The general sense of 'excessive use', the second is to refer to the legal sense of the fact of damage, if there is no fact of damage, the abuse does not exist" [⑨]. In legal practice, it is possible to determine whether certain specific competitive behavior is an abuse of market dominance by analyzing the constituent elements of abuse of market dominance. Specifically, the subject should be an enterprise with a dominant market position or two or more enterprises jointly possessing a dominant market position; the subjective aspect has the intention to abuse, that is, knowing that the abuse will cause the occurrence of the harmful consequences of restricting competition and so on, but wishing for or indulging in the occurrence of such consequences; the object of the infringement is the market order of effective competition as well as consumer interests and enterprise freedom which are closely related to the competition order; the objective aspect manifests itself in the form of the abuse of a dominant market position; the objective aspect manifests itself in the form of the abuse of a dominant market position. The object of infringement is the market order of effective competition and the interests of consumers and the freedom of enterprise, which are closely related to the competition order; the objective aspect is manifested in various abusive behaviors of enterprises in a dominant market position and their substantial damage to effective competition. Abuse of a dominant position of market power is characterized by the following features: the subject of the act can only be an enterprise with a dominant position of market power; the abuse of a dominant position of market power consists of the implementation of abusive behaviors; and the consequences of the act are anticompetitive, damaging to the interests of the public **** and private interests. Abuse of dominant market position in the following specific forms of expression: 1. Compulsory trade. That is, enterprises with a dominant position in the market to take advantage of their own advantage or dominant position to force, induce or threaten and other improper ways, forcing other enterprises against their will to trade with them or prompting other enterprises to engage in behavior that restricts competition. 2. Unfair price behavior. Mainly refers to the dominant market position of enterprises by virtue of its dominant position to determine, maintain and change the price of goods, to higher or lower than in the normal state of competition may be practiced in the price to sell their products, the behavior seriously harm the rights and interests of consumers and other operators. 3. Tying or attaching other unreasonable trading conditions. That is, the operator to take advantage of its economic and technological advantages, in the sale of a product to force the counterparty to buy the goods it does not need, unwilling to buy, or accept other unreasonable conditions. 4. Discriminatory treatment behavior. That is, enterprises with a dominant position in the market without justifiable reasons for the conditions of comparable traders to provide different prices or other trading conditions, resulting in some traders in an unfavorable competitive position, or even forced to withdraw from the market competition, differential treatment in essence, to limit the competition between the object of the transaction. 5. Refusal to trade behavior. That is, in a dominant position in the market enterprises use their dominant position in order to exclude competitors for the purpose of rejecting the related enterprises of the transaction requirements, so as to maintain their own in a certain range of dominant position and competitive advantage. But not all refusal to deal with behavior belongs to the antitrust law to regulate the restriction of competition, antitrust law is the social responsibility of the law, only the exercise of the right to refuse to deal with the behavior of the market entity to restrict competition, damage to the overall welfare of consumers, the antitrust law is necessary to restrict it. III. Legal Reflections on the Regulation of Abuse of Dominant Market Position in China Legislation on abuse of dominant market position is an important part of the field of antitrust law. Compared with the developed countries with market economy, the legal control of abuse of dominant market position in China has just started, and the systematic system of legal control of abuse of dominant market position needs to be further established and improved. Many experts and scholars have put forward their views on whether China should establish a systematic control system for abuse of dominant market position and what kind of system should be established. The author in y inspired by these views, based on the current legislative status, combined with the improvement of China's abuse of market dominance control system to put forward a little of their own ideas: 1. Construction of structuralism and behaviorism combined with the model of the regulatory system of market dominance of the main methods of regulation of structuralist control methods and behaviorist control methods [⑩]. Comparatively speaking, the structuralist regulatory model is more severe, the behaviorist regulatory model is more moderate. The author believes that the more ideal regulatory model is to combine the actual needs of China, the high pressure of structuralism and mild behaviorism combined with each other, between the two, on the one hand, can avoid due to severe high-pressure and damage to the high efficiency of business operations, while creating excessive competition in the market activities; on the other hand, can also be avoided due to the mild indulgence of the loss of the significance of the protection of market competition in the anti-monopoly legislation. 2. The criteria for recognizing a dominant market position are clarified through a comprehensive examination of the elements reflecting the competitiveness of an enterprise. In determining market dominance, market share is a basic standard of measurement, and in general, an enterprise may be suspected of having a dominant market position only if it occupies exclusively, or if several enterprises **** the same substantial market share in a particular market. The law may make specific quantitative provisions as to the market share of an enterprise constituting a dominant position, such that an enterprise may be recognized as having a dominant market position if its market share is 50 per cent or 70 per cent or more. At the same time, it is also possible to establish presumptive criteria for market share, such as stipulating that an enterprise may be presumed to have a dominant market position if its market share in respect of a particular commodity reaches more than 1/2 or if the market share of two enterprises in respect of a particular commodity reaches more than 3/4. Other factors reflecting the competitiveness of the enterprise should also be taken into account, such as: obstacles to the entry of new competitors into the market; the market behavior of the enterprise; the financial strength of the enterprise; the degree of vertical integration of the enterprise; and the possibility of the enterprise switching to the production of other products. 3. Establishing a system for analyzing the abuse of dominant market position that combines subjective and objective factors. Only if the operator subjectively has the intention of abusing a dominant market position to exclude competition and objectively implements behavior that jeopardizes competition by abusing a dominant market position can it constitute abusive behavior. At the same time, enterprises accused of abusing their dominant market position are allowed to legally defend against the accusation. If an enterprise in a dominant market position is able to provide an objective and reasonable explanation for its alleged behavior, proving that the behavior is done to safeguard its legitimate interests and is subjectively motivated by goodwill, the antimonopoly authorities or the court may not find it to be abusive behavior. For example, refusal to deal is motivated by the purchaser's own misconduct; exclusive restraints imposed by exclusive deals can be a legitimate means of conducting competition among producers; tying for technical reasons and for the safety of users is necessary and appropriate, etc. Allowing the operator's defense can balance the interests of the enterprise in a dominant position in the market with those of its competitors in order to achieve harmonious development. 4. Establishing a flexible and effective legal liability system. Abuse of market dominance by enterprises is a kind of illegal behavior, the legal sanction for such illegal behavior has been stipulated in the antitrust laws of various countries, such as the U.S. antitrust law on the legal sanction for the abuse of market dominance by enterprises stipulates three ways: one is to change the structure of the market, cutting, dissolution of the large enterprises; the second is the damages, the monopoly enterprise to give the victim a three-fold compensation, the damages are punitive damages, can be used to weaken the monopoly enterprise market dominance. This kind of damages is punitive compensation, which can weaken the dominant market position of the monopolized enterprise; Third, criminal punishment, mainly in the form of fines and imprisonment, mainly used for anti-competitive behaviors with aggravating circumstances. China's anti-monopoly law will soon be introduced, the author believes that the abuse of market dominance by enterprises of the legal sanctions can learn from the United States and other countries, and combined with the specific realities of our country to develop: (1) civil remedies. The operator violates the provisions of the anti-monopoly law, damage to the rights and interests of others, the victim can to the people's court requesting the operator to bear the responsibility for damages. Here we can consider learning from the U.S. "triple damages" system, the monopoly (including the abuse of dominant market position) behavior of the operator to impose punitive damages. (2) Administrative Counseling. This is mainly for minor circumstances, has not yet caused harmful consequences, or although in possession of prima facie evidence, but the investigation and determination will be very difficult and complex situation. If the party concerned accepts the advice, completely stop abusive behavior, the law enforcement agencies that is the termination of the investigation; but if the party concerned does not accept the advice, continue to implement the abusive behavior, the law enforcement agencies should continue to carry out investigations until the final determination, and in accordance with the provisions of the law to give further penalties, and even criminal responsibility. For the party has accepted the advice, but afterwards violated the content of the advice to continue to implement the abusive behavior, as long as there is evidence to prove that the party violated the duty of advice, the law enforcement agencies can be punished in accordance with the provisions of the law to the party. (3) Administrative penalties. For abusive acts in violation of the Antimonopoly Law, the competent antimonopoly authority under the State Council has the right to order the cessation of the illegal acts. If the perpetrator also has illegal proceeds from the commission of the abusive act, the illegal proceeds shall also be confiscated. At the same time, the anti-monopoly enforcement agency may also impose a fine of not less than double and not more than triple the illegal income according to the circumstances of the abusive act; if the circumstances are serious, the business license shall be revoked by the administrative organ for industry and commerce. Based on the decomposition of large enterprises to improve the market structure of the special function, the author believes that in China's anti-monopoly law to provide for large enterprises in specific circumstances to decompose the sanction method is still necessary, of course, in the specific provisions of the need to strictly limit the conditions of its application. (4) Criminal sanctions. In order to give full play to the authority of the law and effectively sanction the offenders who seriously abuse the dominant market position, China's anti-monopoly law should also stipulate the necessary criminal sanction clauses, and if the abusive behavior violates the criminal law and constitutes a crime, it will be investigated for criminal responsibility according to the law, such as the imposition of fines and imprisonment. To sum up, the monopoly status of the enterprise possessing the dominant market position is not illegal, however, if the enterprise has abused the dominant market position leading to monopolization, it can be recognized as an illegal act, and this kind of illegal act is the object of the anti-monopoly law***same regulation in various countries. Supervision and control of enterprises with dominant market position and their behavior is an important entity of the antitrust law, belonging to the cornerstone system, China should pay enough attention to the establishment and improvement of the system, to build both suitable for China's national conditions and international standards with the abuse of dominant market position control system, in order to promote the healthy development of China's socialist market economy.