Navigating China's Anti-Monopoly Law With Attorney Who Helped Write It

NEW YORK (The Deal) -- Winston & Strawn partner Stephen Harris was one of the first non-Chinese lawyers to advise U.S. and other foreign companies in dealings with China's competition regulators after that country enacted its anti-monopoly law in 2008.

The law assigned the duty of enforcing China's competition regime to three agencies: the Ministry of Commerce (MofCom), which is responsible for reviewing mergers, joint ventures and other transactions that could lead to market concentration; the National Development and Reform Commission (NDRC), which has jurisdiction over price-fixing and other price-related conduct; and the State Administration for Industry and Commerce (SAIC), which oversees non-price-related monopolistic behavior, including monopoly agreements and abuse of market dominance.

Harris, who already had experience advising firms on competition matters in Japan and Korea established his China practice after being recruited to advise Chinese authorities as they drafted the anti-monopoly law.

The final product blended the modern U.S. and European approach to competition law, which requires government authorities to prove a company's business practices harm consumers before bringing an enforcement action, and China's effort to modernize its economy by promoting what it calls a "socialist market economy."

To say the anti-monopoly law has produced some decisions on mergers and other competition matters that Western executives would find surprising is a bit of an understatement. Harris, who has just written a guide to help foreign companies navigate China's somewhat bewildering competition rules, sat down with The Deal's Bill McConnell to discuss doing business in the Middle Kingdom. 

The Deal: How did you get involved with China's anti-monopoly law process and what did you do?


Harris: I consulted with the government during the drafting process. I was invited because of a request from the American Bar Association's antitrust section to go to a consortium with a small number of foreign lawyers and Chinese officials and academics where a very early draft was tabled and we got a look at it and gave our views. They were kind enough to invite me back and I stayed engaged both through Chinese sponsored symposia and consortia and through outreach the Chinese drafters made through bodies like the ABA and the International Bar Association.

 

The Deal: Why were you recruited to the effort?


Harris: I had become known as someone who had an interest in antitrust law in Asia and particularly in Japan. I used to live in Japan and I had handled a couple of significant matters for U.S. companies under Japanese antitrust law and I had been involved in some matters involving the Korea Fair Trade Commission. So when the request for a representative from the ABA came in, I seemed like the logical candidate. But Japan is about different from China as it can be. And, knowledge of the antitrust law drafted by the American occupation force after World War II in Japan bears little resemblance to the one in China or the industrial policy goals that underlie some aspects of the antimonopoly law in China.

It was strictly an accident that I was picked, in a sense. I had this experience in Asia and they extrapolated that to include China, where I knew very little about what was going on, although nobody really knew much about this draft outside China. That's how I was tapped and I'm glad I was.

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