National anti-monopoly law enforcement report： HowNet was fined 87.6 million yuan, and there were many cases of restricting competition in bike-sharing.

　　On June 9, 2023, the State Administration of Market Supervision (State Anti-monopoly Bureau) issued the Annual Report on Anti-monopoly Enforcement in China (2022) (hereinafter referred to as the Report). The data shows that in 2022, China closed 187 monopoly cases in accordance with the law, with a fine of 784 million yuan, and concluded 794 cases of concentrated operators, of which 5 cases were approved with additional restrictive conditions.

　　Since 2019, the State Administration of Markets has compiled and published the Annual Report on Anti-monopoly Enforcement in China for four consecutive years.

　　According to the Report, on June 24, 2022, the 35th meeting of the 13th the National People’s Congress Standing Committee (NPCSC) passed a decision on amending the anti-monopoly law, completing the first systematic revision of the law in the past 15 years.

　　The "Report" pointed out that China’s Internet platform anti-monopoly normalization supervision and law enforcement situation has basically taken shape. In May, 2022, the State Administration of Market Supervision filed an investigation into the alleged abuse of market dominance by HowNet, and imposed a fine of 5% of the previous year’s sales on illegal acts such as unfair high prices and restricted transactions by HowNet, totaling 87.6 million yuan, requiring HowNet to make comprehensive rectification around lifting exclusive cooperation, reducing users’ burden and strengthening internal compliance management, so as to promote the standardized, healthy and innovative development of the industry.

　　At the same time, the State Administration of Market Supervision has given full play to the guiding and warning role of the monopoly case of HowNet, strengthened the administrative guidance for the operators of academic resource platforms such as HowNet, Wanfang, Weipu and Superstar, and guided the upstream and downstream operators to consciously safeguard the good ecology and comprehensively standardize the competition order in the industry. Industry operators are required to operate in compliance with the law and shall not engage in exclusive cooperation.

　　According to the Report, in 2022, anti-monopoly law enforcement agencies investigated and handled one case of abuse of market dominance in the Internet industry and six cases of abuse of administrative power to exclude and restrict competition; 24 cases of concentration of operators in the field of Internet platforms were concluded, and 27 cases of illegal implementation of concentration of operators in the field of Internet platforms were publicly punished. The amount of fines and confiscations in the above cases totaled 104.1 million yuan.

　　The abuse of administrative power to exclude and restrict competition in bike-sharing and other fields has become increasingly prominent. According to the Report, cases involving abuse of administrative power to exclude and restrict competition in the Internet industry are mainly concentrated in bike-sharing. In order to standardize the operation and management of bike-sharing, some local industry authorities abuse their administrative power to improperly restrict a single or a few bike-sharing-operated enterprises from entering the local market, prevent other qualified enterprises from entering the market, and exclude and restrict market competition. From the implementation of the main body, mainly for the city, county (district) level urban management departments, transportation departments, comprehensive administrative law enforcement departments.

　　In the field of online games, the Report believes that there is a risk that some operators will reach a vertical monopoly agreement or realize a hub-and-spoke agreement with the help of vertical relations in the online game market. In terms of concentration of operators, the horizontal integration in the game R&D and live broadcast markets is more likely to have the consequences of eliminating and restricting competition. For example, the merger of Huya and Betta will further strengthen Tencent’s dominant position in the live broadcast market, enabling Tencent to implement closed-loop management and two-way vertical blockade in the upstream and downstream markets, which has or may have the effect of eliminating and restricting competition, which is not conducive to fair competition in the market, may impair the interests of consumers, and is not conducive to the standardized, healthy and sustainable development of online games and live broadcast markets.

　　In view of the online video industry, the Report said that the high-risk competitive behavior in this industry is mainly reflected in two aspects: suspected monopoly agreement and abuse of market dominance. At present, the growth of user scale in online video industry is slowing down, and the user penetration of video platforms is close to saturation. Among them, the users of long video platforms have a negative growth trend, and their operations are under great pressure. In 2021, the market share of short video platform surpassed that of long video platform for the first time, and it became one of the fastest growing segments of Internet platform in China. However, the growth rate of users of short video platform also declined, and the risk of copyright infringement increased.

　　"At present, the competition order in the field of Internet platforms continues to improve. Internet platforms generally strengthen anti-monopoly compliance training, actively regulate their own business practices, and continuously improve the level of compliance management. At the same time, with the continuous progress of digital technology and the innovative development of business models, the problem of monopoly risk in the field of Internet platforms has also presented new features. The concealment and complexity of monopoly behavior are getting stronger and stronger, and the problem of infringing on the interests of operators and consumers in the platform still exists. It is necessary to further strengthen supervision and law enforcement. " The "Report" said.

　　Focusing on the people’s "urgent difficulties and worries", the national anti-monopoly law enforcement has continued to strengthen supervision and law enforcement in the fields of medicine, public utilities and building materials, investigated and dealt with major typical cases such as Shaanxi cement monopoly case, Zhejiang civil explosion monopoly case and Beijing Stroman monopoly case, examined and approved five cases of Chaowei’s acquisition of Xilinx, a new joint venture between Shanghai Airport and China Eastern Airlines Logistics, and strengthened cases with additional restrictions such as Ukrainian potassium merger and Xie Potassium acquisition and NVIDIA’s acquisition of Milos.

　　Specifically, in 2022, China’s anti-monopoly law enforcement filed 18 new cases to investigate monopoly agreements, and 16 cases were settled, with a total amount of fines and confiscations of 569 million yuan. From the perspective of industry distribution, it was mainly concentrated in industries such as medicine, education and training, building materials and motor vehicle testing. A total of 13 cases of abuse of market dominance were investigated and dealt with nationwide, and the amount of fines was 166 million yuan. From the perspective of industry distribution, there were 9 cases in public areas such as water supply and gas supply, and 1 case in Internet platform, wholesale and retail, logistics, ports and other fields. From the perspective of illegal subjects, administrative penalties were imposed on 14 enterprises, including 10 state-owned enterprises and 4 private enterprises.

　　According to the Report, people’s livelihood accounts for more than 73% of cases of abusing administrative power to exclude and restrict competition, among which urban management, medical and health care, engineering construction, education and people’s livelihood account for about 19%, 16%, 16%, 15% and 7% respectively.

　　Cases in the field of urban management mainly involve bike-sharing, construction waste removal, liquefied petroleum gas distribution and other industries. Specific actions include limiting the operation of enterprises in bike-sharing, setting an unreasonable list of garbage transport enterprises, and designating liquefied petroleum gas distribution enterprises. Cases in the field of medical and health care mainly involve medical procurement, medical material distribution, medical insurance, health examination and other industries, and the most typical one is to restrict or restrict transactions in disguise. Cases in the field of engineering and construction mainly involve construction, engineering supervision, housing safety appraisal and other industries, with the most typical behavior of restricting transactions and excluding and restricting foreign enterprises from participating in bidding. Cases in the field of education mainly involve campus security services, students’ clothing, training institutions and other industries. Specific actions include designating security service companies, designating students’ clothing suppliers, and designating centralized training institutions.