The “hidden monopoly” in regulatory compliance

• Administrative authorities and the
  organisations empowered by laws and regulations to have the function of administering public affairs (collectively, the “Administrative Authorities”) (Chapter 5 of Anti-Monopoly Law (AML));
• Government authorities and their departments (Article 7 of the Anti-Unfair Competition Law);
• Public utilities which operate supply of water, power, heat, gas, postal services, telecommunications, transportation and other public utilities and other business undertakings who have monopoly positions in accordance with the laws.

However, AML fails to exhaust the subjects that can abuse administrative powers to restrict or eliminate competition: Administrative Authorities’ indirect engagement into commercial activities by means of abusing their administrative powers and restricting free competition, normally in a way of their cooperation with particular enterprises, still flourishes in the economic activities, as one of the results from the long term tradition of integration of governments with enterprises and special protection to state-owned enterprises. To investigate the abovementioned violations faces an embarrassing situation that how the laws should apply — on the one hand, neither the Administrative Authorities conduct any direct monopolistic activities nor the particular enterprises have any administrative powers, which removes the grounds of application of Chapter 5 (Administrative Monopoly) of AML; on the other hand, Chapter 2 (Monopoly Agreement) of AML cannot apply either, because Administrative Authorities and the particular enterprises in the cooperation are not those undertakings who are competitive or have upstream and downstream relationship; moreover, even if we investigate such particular enterprises only, the investigation will probably demonstrate that they normally are not dominant in the market but are able to acquire and maintain monopolies with the aid of administrative powers, so Chapter 3 (Abuse of Dominant Market Position) of AML cannot apply.

The behaviours that impair competition as described above are closely connected with the abuse of administrative powers and cannot be effectively prohibited by current provisions of AML. Therefore, we define them as “hidden monopoly”.

Scarce resources
Nowadays the Administrative Authorities still control lots of scarce resources in the market in our country. What the Administrative Authorities usually do is to exercise their control powers to carefully choose a few beneficiaries, enabling them to acquire huge benefits and advantages in the allocation of scarce resources. Such practices are so common that they can be seen in every aspect of society, including the granting of land use rights and real estate development, investment promotion, disposal of state-owned assets and even curb-side parking.

Such collusion between the Administrative Authorities and enterprises also exists widely in the areas of governmental procurement,
tendering and bidding, among others. Governmental purchase orders, infrastructure construction projects, hosting conferences and so on, which normally involve a huge amount of money, can be deemed as “scarce resources” in a broader sense; they are becoming more and more secret along with the widespread and strengthened investigations. From this perspective, they should also belong to the hidden monopoly in the scarce resources allocation.

Industry regulation
AML does not exclude governmental regulation over special industries. Generally speaking, industry regulation focuses on natural monopoly in addition to those subject to regulation for special reasons such as national security and franchise.
Our research and analysis indicate that typical examples of above-mentioned hidden monopoly include (1) taxi licence control: local governments strictly control the issuance of taxi licences, which undoubtedly raises the entry barrier and accordingly impedes effective competition in the market, and gradually and potentially local government and the taxi companies form monopoly through the “collusion” in the taxi licence issuance; (2) driving school licence control: in practice local transportation administration authorities set various hidden barriers for the establishment of driving schools in the name of industry regulation. It leads to the short supply of driving schools in the market and consumers may have to accept poor services with high prices from the limited number of driving schools; (3) automobile brand sales: since the effectiveness of the Implementation Rules of the Automobile Brand Sale, it is only permissible to sell automobiles under the exclusive licences of automobile brands, namely, automobile manufacturing enterprises. However, benefiting from their brand advantages, the automobile manufacturing enterprises completely control the upstream and downstream markets of automobile sales. In summary, automobile brand sales appear to be a vertical monopoly but essentially it is a hidden monopoly in industry regulation.

Suggestions

• AML should (i) expand its coverage of subject of administrative monopoly to local legislative authorities and other quasi-administrative agencies with governmental supports; (ii) broaden the scope of administrative monopoly, no longer limiting monopolistic behaviours to the model like “local Administrative Authorities restrict non-local business undertakings”; and (iii) expressly forbid any behaviour that impairs market competition by means of collusion between governments and enterprises or abuse of administrative powers or influences in a hidden way.
• Anti-monopoly enforcement agencies should start investigating the administrative monopolies step by step while continuing to investigate the commercial monopolies, forcing local governments to fully recognise the importance of compliance with AML.
• Government should formulate and promulgate preferential policies targeting small and medium enterprises and change, as quickly as possible, the situation that those state-owned enterprises and international companies that already have strong market positions have been receiving favourable treatment from governments for years.

行政合规中的”隐性垄断”问题
隐性垄断–介於行政垄断与商业垄断之间
滥用行政权力排除、限制竞争的行为称为”行政垄断”。行政垄断的主体主要包括以下几类：

• 行政机关和法律、法规授权的具有公共事务职能的组织（以下统称”行政机关”），即《反垄断法》第五章规制的对象；
• 政府及其所属部门，即《反不正当竞争法》第七条规制的对象；
• 经营公用事业（供水、供电、供热、供气、邮政、电讯、交通运输等行业）的公用企业以及其他依法具有独占地位的经营者。

但是，《反垄断法》对滥用行政权力排除、限制竞争的主体的规定并不完善：由於中国政企不分、偏袒国企的传统，经济活动中存在大量行政机关滥用行政权力间接参与商业活动、妨害自由竞争的情形，这些妨害竞争的行为通常以政府与特定企业合作的方式进行。查处上述违法行为时法律适用上可能存在难点–从表面看，行政机关没有直接实施垄断活动，相关企业又没有行政权力，均无法适用《反垄断法》第五章（行政垄断）的规定；而行政机关与相关企业的合作又并非具有竞争关系或者上下游关系的经营者，无法适用《反垄断法》第二章（垄断协议）的规定；如果针对相关企业的行为单独进行查处，此类企业又往往不具备市场支配地位，而是凭借行政权力的支持才能维持垄断，自然也无法适用《反垄断法》第三章（滥用市场支配地位）的规定。

这一类妨害竞争的行为与行政权力的滥用存在密切关系，但又不能被《反垄断法》的现有规定所有效禁止，我们将其称为”隐性垄断”。

稀缺资源分配中的隐性垄断
我国很多市场中的稀缺资源还受到行政机关的支配和控制。行政机关正是通过其支配和控制的能力，精心挑选少数的受益人，使他们在稀缺资源分配中获取了巨大利益和优势。此类企业与政府串通的做法体现在生产经营、生活的各个方方面，包括土地出让与地产开发、招商引资、国有资产处置、道路停车场设置等。

此类政企通谋的情形亦常见於政府采购、招标投标等领域。政府采购订单、建设项目、承办会议等商业机会通常金额巨大，广义上可以视作”稀缺资源”；而且随着查处力度的增强，行为模式有越来越隐蔽的趋势。因此，这类行为同样可归类为稀缺资源分配中的隐性垄断。

行业监管中的隐性垄断
反垄断法并不排斥政府对特定行业进行监管。除特殊原因（例如涉及国家安全、专营专卖）外，行业监管主要体现在自然垄断行业。

根据我们的调查研究，此类隐性垄断发生的典型领域包括（1）出租车牌照管理：地方政府严格控制出租车牌照发放，导致出租车准入门槛过高，难以形成有效竞争，进而催生潜在的地方政府和出租车公司”共谋”垄断风险；（2）驾校申办许可：实践中各地道路运输管理部门以行业监管为由，为驾校申办设置层层隐性门槛，从而导致市场中驾校供给短缺，消费者不得不接受既有驾校质次价高的服务；（3）汽车品牌销售：自2005年《汽车品牌销售管理实施办法》生效后，汽车品牌销售一直是品牌独家授权制。汽车生产企业（即整车企业）凭借品牌优势，完全控制了汽车销售的上下游市场。汽车品牌销售的纵向垄断是表象，其实质问题是行业监管中出现的隐性垄断。

建议

• 《反垄断法》修法时应：第一，扩充行政垄断的主体，应当包括地方立法机关，以及具有政府支持的准行政机关；第二，扩充行政垄断的范围，不再以”本地行政机关妨害外地经营者”的模式对垄断行为进行描述；第三，对政府与企业串通、退居”幕后”利用行政权力或行政影响妨害市场竞争的行为进行明确禁止。
• 反垄断执法机关应在查处商业垄断的同时逐步对行政垄断展开有针对性的执法活动，令地方政府充分认识到《反垄断法》合规的重要性，以执法倒逼立法。
• 政府应当出台针对中小企业的优惠补贴政策，及时扭转本已处於强势地位的国有企业、国际企业进一步受到政府照顾的现状。

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