Reconstructing the power of price supervision and inspection in the sense of competition law: from the perspective of th
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Reconstructing the power of price supervision and inspection in the sense of competition law: from the perspective of the Swiss Price Regulation Act Zhao Tianshu1
China-EU School of Law 2015
Abstract The task of China’s Price Law requires that the power of price supervision and inspection is exercised in a way of protecting effective market competition. However, there is a hybrid of two legislative conceptions in the legal text of China’s Price Law, i.e. maintaining market competition and protecting consumers. Though the ultimate purpose of maintaining market competition is also to protect the interests of consumers, the two legislative conceptions differ in requirements for the subject, object and means of law enforcement. Such hybridism causes difficulty to the exercise of the power of price supervision and inspection. Drawing a lesson from the Swiss Price Regulation Act, this article tries to reconstruct the power of price supervision and inspection in the sense of competition law, with a view to further improving and perfecting China’s Price Law and price law theory under the competition law regime. Keywords Power of price supervision and inspection Competition policy Consumer protection Swiss Price Regulation Act China Price Law
1 The hybrid legislative conception of China’s Price Law and the power of price supervision and inspection in dilemma The Price Law of the People’s Republic of China, as a self-contained law, entered into force on May 1, 1998 (hereinafter referred to as ‘‘China’s Price Law’’). Article 1 of China’s Price Law specifies its task as follows: ‘‘[to] strengthen the price’s role in rational allocation of resources, stabilize the general price level of the market, and protect the lawful interests of consumers and business operators, as well as promote & Zhao Tianshu [email protected] 1
Post Doctor of China University of Political Science and Law, Beijing, China
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Z. Tianshu
the healthy development of the socialist market economy’’. In fact, the so-called price’s role in rational allocation of resources is played by the pricing centered market competition mechanism. The pricing of business operators is subject to demands and production costs of products.1 In the market of comparable products, an enterprise, for the maximum profits in the competition with other business operators, needs to lower its price and boost product demand as much as possible on the premise that its marginal revenue is positive.2 When the price is as low as the marginal cost, the enterprise secures the maximum profit and meanwhile its consumers enjoy the cheapest price. From a utilitarian perspective, the market then reaches the Pareto optimality and the social wealth is maximized.3 The existence of such market state, however, needs a premise effective market competition. If there is a monopoly in the market, a business operator or some business operators will preclude other competitors by dumping sales or other means; then, consumers will lose alternative options to other comparable products and o
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