Abstract
The task of China’s Price Law requires that the power of price supervision and inspection is exercised in a way of protecting effective market competition. However, there is a hybrid of two legislative conceptions in the legal text of China’s Price Law, i.e. maintaining market competition and protecting consumers. Though the ultimate purpose of maintaining market competition is also to protect the interests of consumers, the two legislative conceptions differ in requirements for the subject, object and means of law enforcement. Such hybridism causes difficulty to the exercise of the power of price supervision and inspection. Drawing a lesson from the Swiss Price Regulation Act, this article tries to reconstruct the power of price supervision and inspection in the sense of competition law, with a view to further improving and perfecting China’s Price Law and price law theory under the competition law regime.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Richard Posner (US), Economic Analysis of Law, translated by Jiang Zhaokang, Law Press, 2007, page 279.
When the marginal cost is lowered to or below zero, further sales will not increase or decrease the gross revenue. Id. page 280.
Id., footnote 1, page 13.
Standard Oil Co. v. United States, 221 U. S.1; in China, the general theory of anti-monopoly also believes that the act that two or more competing business operators maintain or change their prices by agreements, decisions or joint acts to gain excessive profits, is a price cartel, a typical act of monopolization. See Wu Weida, Price Competition in the View of Antitrust Law, Zhejiang University Press, 2005, page 122.
Richard Posner (US), Antitrust Law, 2 edition, translated by Sun Qiuning, China University of Political Science and Law Press, 2003, page 40 (outer).
Paragraph 2, Article 17 of the China's Anti-monopoly Law defines the act of dumping sales as "without justifiable reasons, selling commodities at prices below cost". Paragraph 6 of the same Article relates to price dumping, stating that "without justifiable reasons, differential prices and other transaction terms are applied to trading counterparts under the same conditions".
The "act of price hike in a disguised form" as provided for in this Article includes: (I) raising the level in selling commodities or charging a fee; (II) passing a fake product off as a genuine one, passing a defective product off as a high-quality one, and lowering quality; (III) using inferior materials and turning out sub-standard products, or giving short measures, and reducing quantity; (IV) other acts of price hike in a disguised form.
Article 26, Chapter IV of the China's Price Law states that: "stabilizing the general price level is one of the major objectives of macro-economic policy. The State shall set targets for the control and adjustment of general price level in the light of the requirements of the development of the national economy and social tolerance, incorporate them into national economic and social development plans and enforce them through comprehensive policies and measures in terms of monetary, fiscal, investment, import & export and other areas". The remaining provisions in Chapter IV and those in Chapter V specify the various circumstances where the governments at various levels intervene in the price act of their own motion.
See Article 35, China's Price Law.
See Articles 19–25, China's Price Law.
20 JAHRE PREISÜBERWACHUNGSGESETZ HINTERGRUNDDOKUMENTATION FÜR DIE JUBILÄUMSVERANSTALTUNG, 15. September 2006, Bernhof, 3.
20 JAHRE PREISÜBERWACHUNGSGESETZ HINTERGRUNDDOKUMENTATION FÜR DIE JUBILÄUMSVERANSTALTUNG, 15. September 2006, Bernhof, 4.
The regulation on credit business is excluded.
For example, in 2014, the government of Kloten, Switzerland, decided to increase the water fee charged by a water supply company, IBK, which had a monopoly position in the city. After hearing the price increase resolution at a meeting as an audience, the Price Supervisor officially issued a suggestion to the municipal council. In the suggestion, the Price Supervisor made a comparison between the increasing trend of the water supply cost in the past 60 years and the gradually rising revenue of the company monopolizing in water supply in the long time water supply and found that the company could gain reasonable revenues without increasing the water fee. Therefore, the Price Supervisor suggested that Kloten should abort the price increase of the IBK company and announced the suggestion to the public. Empfehlung des Preisüberwachers zu den Wassergebühren der industriellen Betrieb Kloten (IBK), OM 365/13.
Rolf H. Weber, Preisüberwachungsgesetz (PüG), Kommentar, Bern 2009, Art. 13 marg. no. 4 et seqq.
http://wirtschaftslexikon.gabler.de/Archiv/15842/vergleichsmarktkonzept-v10.html (Accessed 17 Aug 2015).
For example, in 2013, in order to determine whether there is any unfair price act in the Swiss drug market, the Swiss Price Supervisor conducted a drug survey by comparison of the market prices of more than 20 drugs in 14 western European countries and adjusted the comparison result taking into account the different costs for producing drugs in these countries, and finally confirmed that the problem of excessively high prices of drugs exist in Switzerland. (Eidgenössisches Departement für Wirtschaft, Bildung und Forschung WBF, Preisüberwachung PUE, Schweizer Medikamentenmarkt im internationalen Vergleich—Handlungsbedarf im patentfreien Bereich, Bern, August 2013 Tobias Binz, 3 et seqq.).
For example, the Swiss Price Supervisor, Stefen Meierhans, found that the flight ticket prices for two routes (Zurich to Brussels, and Zurich to Luxembourg) charged by Swiss International Air Lines AG (SWISS) were excessively high, and made a demand of adjustment to SWISS. SWISS agreed to solve the issue by channel other than by judiciary. Upon consultation, the two parties reached a harmonious adjustment agreement in August, 2013, according to which, the provisions as to sanctions in Articles 23 and 25 of the Price Regulation Act will apply if SWISS breaches the agreement and raises the prices in the duration of the agreement. (Einvernehmliche Regelung zwischen Swiss International Air Lines AG und dem Preisüberwacher betreffend Flugpreis auf der Strecke ZRH-BRU und auf der Strecke ZRH-LUX, den 22 August 2013).
Rolf H. Weber, Preisüberwachungsgesetz (PüG), Kommentar, Bern 2009, Art. 5 marg. no. 12 und Art. 16 marg. no. 12 et seqq.
If a competition agreement obviously harms the competition centered by certain good or service in a market, without justified reason in terms of economic efficiency, then such agreements restricting effective competition are unfair.
Richard Posner (US), Antitrust Law, 2 edition, translated by Sun Qiuning, China University of Political Science and Law Press, 2003, page 9 (outer).
References
20 JAHRE PREISÜBERWACHUNGSGESETZ HINTERGRUNDDOKUMENTATION FÜR DIE JUBILÄUMSVERANSTALTUNG, http://www.preisueberwacher.admin.ch/dokumentation/00060/00061/index.html?lang=de (Accessed 20 Sept 2015)
Eidgenössisches Departement für Wirtschaft, Bildung und Forschung WBF, Preisüberwachung PUE, Schweizer Medikamentenmarkt im internationalen Vergleich—Handlungsbedarf im patentfreien Bereich, Bern, August 2013 http://www.preisueberwacher.admin.ch/dokumentation/00073/00074/00238/index.html?lang=de (Accessed 20 Sept 2015)
Einvernehmliche Regelung zwischen Swiss International Air Lines AG und dem Preisüberwacher betreffend Flugpreis auf der Strecke ZRH-BRU und auf der Strecke ZRH-LUX, den 22 August 2013. http://www.preisueberwacher.admin.ch/dokumentation/00073/00222/index.html?lang=de (Accessed 20 Sept 2015)
Empfehlung des Preisüberwachers zu den Wassergebühren der industriellen Betrieb Kloten (IBK), OM 365/13. http://www.preisueberwacher.admin.ch/dokumentation/00073/00223/index.html?lang=de (Accessed 20 Sept 2015)
Richard Posner (US) (2003) Antitrust Law, translated by Sun Qiuning. China University of Political Science and Law Press, Beijing
Richard Posner (US) (2007) Economic Analysis of Law, translated by Jiang Zhaokang. Law Press, Beijing
Weber RH (2009) Preisüberwachungsgesetz (PüG). Kommentar, Stämpfli, Bern
Weida W (2005) Price competition in the view of Antitrust Law. Zhejiang University Press, Hangzhou
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Tianshu, Z. Reconstructing the power of price supervision and inspection in the sense of competition law: from the perspective of the Swiss Price Regulation Act. China-EU Law J 5, 197–207 (2017). https://doi.org/10.1007/s12689-015-0060-5
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12689-015-0060-5