1. When Competition Law Meets Telecom Regulation: the Chinese Context
Prof. Dr. Liyang Hou
ACF Annual Conference 2017
Hong Kong

2. Table of Content Fair Competition Review
Conflict between competition and telecom regulation
Chinese Case
Conclusion

3. Table of Content Fair Competition Review
Conflict between competition and telecom regulation
Chinese Case
Conclusion

4. Fair Competition Review
State Council: “Notice on Establishing Fair Competition Review in the Market Mechanism”, 1 June 2016
NDRC, MOF, Mofcom, SAIC and Office of Legislative Affairs: “Guidelines on Fair Competition Review”, 23 October 2017

5. Some Key Points
Purpose: to establish a common, open and competitive market
Reviewable act: Any act producing general binding effect that affect economic activities should be reviewed
Body: Self-review
Approach: the AML

6. Prohibitions Discrimination against non-local goods
Discrimination against non-local persons
Discriminatory “state” aid
Exclusive or special rights
Price regulation
Any other measures that limit or restrain competition

7. Exemptions Conditions Examples Indispensable Proportionate
Timely limited
Examples
Act to maintain national security
Act to support poor regions or to offer disaster relief etc
Act to save energy, to protect environment etc.

8. Question
Consequence: every act of general effect, so long as affecting economic activities, should be aimed at improving competition.
Question: should we consider competition law as the GOD principle?

9. Table of Content Fair Competition Review
Conflict between competition and telecom regulation
Chinese Case
Conclusion

10. Can competition law apply to regulated industries?
Regulation preempts competition law (US)
Competition law prevails over regulation (EU)

11. US Model Milestone Cases Regulation preempts competition law Trinko
LinkLine
Regulation preempts competition law
When there exists a regulatory structure designed to deter and remedy anticompetitive harm, the additional benefit to competition provided by antitrust enforcement will tend to be small, and it will be less plausible that the antitrust laws contemplate such additional scrutiny

12. EU Model Milestone cases Competition law prevails over regulation
Deutsche Telekom
Telefonica
Telekomunikacja Polisca
Competition law prevails over regulation
Even a compliance of regulation does not exempt an undertaking from the application of EU competition law.

13. Table of Content Fair Competition Review
Conflict between competition and telecom regulation
Chinese Case
Conclusion

14. Chinese Scenario Case China Telecom/China Unicom Time: 2011-2012
Suspected abusive conducts: price discrimination or price squeeze
Agency: NDRC
Decision: commitments

15. Case China Telecom/China Unicom
1000/Mb/M
Other Broadband Operators
Telecom and Unicom
200/Mb/M or lower
Big customers
Broadband users
Household users

16. Competition Concerns Price Discrimination Price Squeeze
Wholesale price vs. retail price
Price Squeeze
Dedicated bandwidth vs. shared bandwidth

17. Applicability of the AML
If applicable, two issues occurs:
Can non-licensed broadband users can resale their Internet access services?
Can the AML in practice repeal a regulation adopted by other ministries?

18. Table of Content Fair Competition Review
Conflict between competition and telecom regulation
Chinese Case
Conclusion

19. Substantive Analysis
Does regulation explicitly excludes the application of competition rules?
IF NOT
Is regulation detailed and designed to deter and remedy anti-competitive harm?
Does the application of competition rules go against the regulator’s plans?

20. Director, Center for European Law Shanghai Jiao Tong University
Liyang Hou
Director, Center for European Law
Shanghai Jiao Tong University
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[SSRN]