Many of us remember as kids the joys of playing the board game Monopoly.

Joys like zooming around Go in our car piece or – if we were the younger brother, with our thimble - and collecting $200.

Joys like feeling our hearts warm when seeing our older brother “go to jail.”

Joys like being naturally high after collecting the “Boardwalk” and “Park Place” spaces, erecting hotels on top, and waiting with baited breath as our opponent nears.

Well, friends, many of us are going to have to learn to play Anti-Monopoly now, and it ain’t nearly as much fun.

China’s Anti-Monopoly Law will take effect soon, on August 1. And so, many of us are going to have to play the Anti-Monopoly game if we want to keep large foreign companies relatively tangle-free in China.

These rules are hellishly boring to read unless you’re a lawyer. While it’s good to be acquainted with them, it’s hard without falling asleep in a pool of drool.

Playing Anti-Monopoly can be more fun if you imagine you’re 10 years old again, gingerly rolling dice to collect railroads and other prime properties without getting socked with penalties. You’ll also have to suspend certain principles of reality with this game, as we’ll use the already restricted real-estate sector to explain new anti-monopoly rules in order to keep the Monopoly metaphors in play.

So what the hell, why not? Let’s take our car and roll around the Anti-Monopoly board, which, for our purposes, looks exactly like the Monopoly board. By the way, screw the thimble.

You start at Go and roll a 3

So you land on Baltic Avenue. Oh, this is a favorite property because it’s so cheap (only $60) compared to the hundreds that other spaces cost. And you can nearly dominate the purple properties because there are only two of them. You decide to buy.

Hold up hot shot. According to China Business Review (CBR), “Acquiring 50 percent or more of the voting shares or assets of any other business operator” may mean that you have to notify the antimonopoly enforcement authority before going ahead with plans.

Now there are other factors that determine if you actually have to contact the antimonopoly enforcement authority, like whether the “concentration will give the participating business operators more than 25 percent of an industry’s market share in China.”

Baltic Avenue likely isn’t going to do this for you, so you’re probably safe. You go ahead and buy it without telling nosy bureaucrats.

Next you roll snake eyes and land on Reading Railroad

Not moving too quick around the board, eh?

That’s ok, because railroad owners exact heavy tolls from those that use their space, and this one isn’t owned yet.

Time to fork over $200 to get this sweet property.

Hold up. You may have to notify the antimonopoly enforcement authority on this one.

Reading, Short Line, B&O, and Pennsylvania railroads seemingly make up 25 percent of the railroad market in this game, but rumor has it, Reading is a little longer than Short Line and comes in at 26 percent. This kind of market concentration in your hands – as already noted – requires notification.

You decide to avoid the red tape and wait until Short Line to make a railroad purchase.

Don’t forget, though, that you’ll also have to notify anti-monopoly regulators of pending purchases if, according to CBR:

• During the previous fiscal year, the total global turnover of all the business operators participating in the concentration exceeded ¥9 billion, and at least two of the participating business operators each had a turnover of more than ¥300 million within China
• During the previous fiscal year, the total turnover within China of all the participating business operators was more than ¥1.7 billion, and at least two of the participating business operators each had a turnover of more than ¥300 million within China

Next you roll a 12 and land on Tennessee Avenue, which is an orange block

You note that your competitors already have landed on the other orange blocks of New York Avenue and St. James Place, which they now control.

You decide to join the orange block mafia before they get control of everything.

You’re about to slap down $180 for 33 percent of the block, when you realize that, according to CBR, “It is uncertain whether acquiring the same percentage interest as other shareholding business operators of the target business operator should be considered a concentration.”

The rules are ambiguous. But you decide that when in China, do as the Chinese and operate without transparency. You purchase the square, and wait to hear from the lawyers whether or not to notify the regulators.

You land on Chance after rolling a 4

It tells you to advance straight to Boardwalk, where unfortunately, your competitor awaits you with a hotel.

Damn, you’re thinking. You’re going to have to shell out big bucks.

Instead of fining you for trespassing, though, your competitor offers to sell you the whole blue block – both Boardwalk and Park Place. She has been hemorrhaging cash, and is trying to redeem some instead of going bankrupt.

But the figure she wants to charge is outrageous. Lucky for you, the new anti-monopoly rules prohibit “dominant firms from ‘selling at unfairly high prices or buying at unfairly low prices,’” according to Jones Day law firm. Although, “What constitutes ‘unfair’ is not defined.”

You’re confident you have a case, though, and decide to wait it out.

Restricting the purchase or development of new technology also is prohibited, and could be enforced in a discriminatory fashion against foreign companies – and is one of several provisions that could be disadvantageous to you. You note these before proceeding with your next roll.

You roll a 3 and land on Community Chest

This doesn’t seem good because it directs you to Jail square.

Oh, but you’re just visiting.

After all, penalties for noncompliance involve big fines (for starters, between one and 10 percent of total annual turnover plus the confiscation of any illegal gains) but no mention of jail time – at least not according to Jones Day.

While you’re visiting jail, though, you might be surprised to see a member of the anti-monopoly reviewing authority behind bars.

“If the reviewing authority’s staff members abuse their power, neglect their duties, engage in favoritism, engage in fraudulent practices, or disclose trade secrets or confidential information, and if such an act constitutes a criminal offense, they will be punished under the criminal law,” according to CBR. That should help keep your confidential trade secrets safe during review.

Walking out of the jail compound, you breath in some not-so-fresh Beijing air and breath out a sigh of relief, right before your heart starts racing again.

Anti-Monopoly is just getting started.

    Channel: Vital News     |