Facts
Decision


On 2 September 2022, the Hunan Administration for Market Regulation (AMR) issued a decision to impose administrative penalties on five motor driver training schools in Xintian county for taking part in a monopoly agreement. The Hunan AMR opened an investigation into the case in June 2019 and in July 2022 issued an administrative penalty in accordance with the law.

Facts

It was found that, prior to 17 November 2018, five motor vehicle driver training schools in Xintian county had engaged in training operations, charging their own prices and competing with each other. In the afternoon of 17 November 2018, the parties concerned held a meeting in the office of Xintian Longquan Motor Driver Training School (Longquan), attended by representatives from each driving school. The meeting reached a consensus on the realisation of unified office, unified registration and charging issues.

The representatives of the parties involved in this case all signed the minutes of the meeting to confirm the monopoly agreement of fixing the price of driver training in Xintian county. After 18 November 2018, five driving schools set up a driver training centre registration office in the office area of Longquan, configuring desks, computers and other facilities to pool their offices and charge registration fees at a unified rate of 4,980 yuan (£615) per person.

Decision

The Hunan AMR considered the following facts:

  • The fact that the parties had reached and implemented a monopoly agreement was clear and conclusive.
  • The training fees charged by the coach of the dependent vehicle should be included in the sales of the driving school.
  • The case was not characterised by circumstances that should be exempt from administrative punishment or mitigated or reduced administrative punishment according to the law.

In determining the amount of the fine, circumstances such as the short period of violation, timely rectification and operation difficulties during the covid-19 pandemic were considered.

Article 46 of the Anti-Monopoly Law (AML) 2008 states as follows:

where an undertaking reaches and implements a monopoly agreement in violation of this Law, the antimonopoly enforcement body shall order it to cease the violation, confiscate its illegal proceeds, and impose a fine of not less than 1% nor more than 10% of its sales for the previous year.

Article 49 of the AML 2008 states as follows:

in determining the specific amount of the fine, an anti-monopoly enforcement body shall take into account factors including but not limited to the nature, extent, duration, and elimination of the consequences of a violation.

The Hunan AMR decided to order the concerned parties to cease the violation and impose a fine of 3.5% of the annual sales in 2018 respectively.

For further information on this topic please contact Hao Zhan or Ying Song at AnJie Law Firm by telephone (+86 10 8567 5988) or email ([email protected] or [email protected]). The AnJie Law Firm website can be accessed at www.anjielaw.com.