Legal Analysis of the Prior Year Revenue as the Basis for an Antimonopoly Fine under Chinese Law (Case Study of the Model Case of the Supreme People’s Court of the People’s Republic of China in the Case of Hainan Shenghua)

When an economic entity concludes and implements a monopoly agreement, the antimonopoly authority issues an order to stop illegal behavior, confiscates illegally obtained income and imposes a fine. At the same time, the confiscation of illegal income and the imposition of a fine are independent, but accompanying measures of responsibility, which in principle are subject to joint application. However, in practice, given the difficulties in accurately identifying illegal income, an approach is often used whereby an administrative fine absorbs illegal income. When calculating the amount of the fine, the statutory concept of «revenue for the previous year» should be understood as the total revenue of an economic entity in mainland China for the previous calendar year, and not just revenue received from the sale of goods or services related to monopolistic behavior. This interpretation is the result of a systematic analysis of the provisions on liability for monopolistic actions, regulatory objectives, a low percentage penalty limit, as well as a comparative legal analysis of the legislation of other countries and seems optimal in the context of current legal regulation. When determining the specific percentage rate of a fine, the antimonopoly authority has discretionary powers and must take into account the degree of harm caused by monopolistic behavior, the subjective guilt of the business entity, as well as whether the amount of the fine will have the necessary deterrent effect to eventually ensure compliance between the severity of the offense and the measures of responsibility.

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