China’s Anti-Monopoly Law (AML) prohibits a dominant company from selling products at prices below cost without legitimate reasons.
Chinese antitrust agencies and courts have provided some signals as to how they will enforce the predatory pricing provision in the AML and similar provisions in other laws. For example, in 2009, the National Development and Reform Commission (NDRC) circulated for comments a draft regulation implementing aspects of the AML, including its predatory pricing provision.
However, all in all, the law on predatory pricing is still relatively undeveloped in China at this stage. As US and EU courts have long dealt with the fundamental questions raised by predatory pricing claims, we assess the existing and draft rules in China against the backdrop of US and EU jurisprudence. We focus in particular on four factors: existence of dominance/monopoly power; definition of the benchmark used in a cost test; injury to competition; and absence of pro-competitive justifications.Legal Issues of Economic Integration