Methodological note

Antitrust law can be enforced in two ways. Antitrust authorities can pursue administrative proceedings to investigate, prohibit and sanction, for example, with a fine, anti-competitive behaviour. Alternatively, the party allegedly prejudiced by an antitrust infringement may bring proceedings against the unlawful behaviour under private law. The plaintiff may, for example, bring a cease and desist or compensatory claim. The defendant may raise the ‘Euro-defence’, that is defend contractual claims by pointing to the anti-competitive nature of the contract. In Europe the enforcement of antitrust law is almost entirely a matter of administrative law while private enforcement of antitrust law is of less significance. This phenomenon contrasts with the legal situation in the USA, where the number of private antitrust proceedings is many times greater. An important aim of this study is to learn more about private antitrust law in the reporting countries. A first step – in conformity with the basic approach of the Common Core Project – is to create a cartography of antitrust law remedies. The country reports will show that in fact there is extremely little case law on private enforcement in antitrust law, despite the fact that in theory private enforcement exists everywhere. A second step will consist in generating ideas on how to strengthen the position of private remedies. Here in particular European initiatives through Community institutions could play a significant role.

Objects of claim

Case 9 Predatory price undercutting agreements – forbearance (cease-and-desist order)

A, B and C all operate gas stations in town X. D opens a new gas station in X in which petrol is cheaper than A, B and C sell it. To protect themselves against the new competition, A, B and C agree to regularly undercut D's price so as to make him close down his gas station. Thus, D is brought to the point of ruin.

1. Can D claim to compel A, B and C to refrain from price undercutting?

2. Does D's claim require that an (antitrust) authority be engaged against the conduct of A, B and C?

3. Can the claim for an injunction also be pursued by an association? If yes, which associations are entitled to take legal action?

4. Does the conduct of A, B and C constitute an administrative or criminal offence? If yes, who is competent to prosecute the offence, what powers of investigation are there, and what sanctions can be applied?

Austria (9)

(1) The case is one of predatory pricing by collectively dominant enterprises. On the basis of their agreement A, B and C exercise virtually total control over the local gas market in town X, or at any rate have a market share of at least 30 per cent (§ 34 para. 1 a n. 1 KartG 1988 = § 4 para. 2 n. 1 KartG 2005), so that market dominance is presumed under Austrian law.

Summary of theses

Claim objectives

Implementation deficits

All Member States have implemented the duty in domestic law to order cessation or prohibition for an advertising infringement. However, in some countries there are deficits or ambiguities in the implementation.

(1) In Germany the easing of the burden of proof, called for in art. 6 lit. (a) Misleading and Comparative Advertising Directive 84/450/EEC, has only partly been implemented into national law. Because of the ambiguous wording of art. 6 it remains unclear what form of implementation is required.

(2) In England interlocutory legal protection is subsidiary to the compensatory claim. The OFT also regards the injunction as a remedy of last resort. This low priority is not provided for in the Misleading and Comparative Advertising Directive 84/450/EEC.

(3) The legal position in Sweden, Finland and England, which do not admit as a matter of principle the preventive cessation claim on the grounds of press freedom, is not in conformity with art. 4 para. 2 Misleading and Comparative Advertising Directive 84/450/EEC.

Proposals for further harmonization

Art. 11–13 of the Directive on Unfair Commercial Practices largely adopts the legal harmonization which was already achieved in 1984. Legal consequences which already exist in almost all Member States could lead without difficulties to further European legal harmonization.

(4) With the exception of the legal position in England all states provide for monetary fines in cases where orders of an authority or courts are infringed.

The overall results of the country reports

The country reports allow the conclusion that – although there is everywhere the theoretical possibility to pursue private remedies for antitrust law infringements – this possibility is rarely availed of in practice. Antitrust law is primarily used as a means of defence, for example where contractual claims are contested by relying on the invalidity of contract under antitrust law. However, the active use of antitrust law is only to be seen in individual cases. Examples of the (successful) enforcement of compensatory clams are almost entirely missing. In recent times, however, a change may be observed: in the wake of the particularly blatant vitamin cartel, private compensatory claims have been pursued in certain EU Member States. In addition, the readiness seems to be growing everywhere to undertake private legal action against antitrust infringements.

There is a variety of reasons for this discrepancy between theory and practice. In part there are legal difficulties, for example restrictions on standing or uncertainty regarding the precise requirements of a compensatory claim, for instance the admissibility of the passing-on defence. The most significant causes, however, are of a practical nature, thus difficulties in providing evidence or a lack of incentive to expose oneself to the costs and risks of a private claim. Also of fundamental importance is the competition between private legal remedies and public enforcement. The applicant incurs no costs by involving an antitrust authority.

According to a widely held view the legal nature of unfair competition law is more that of private law whereas antitrust law involves primarily public law enforcement mechanisms. The country reports have shown that, while this is an understandable starting point, it inadequately describes the wide variety of regulatory models in Europe. Regarding unfair competition law there is a rich body of private law experience. In the northern states, however, public law enforcement methods are preferred even in the field of unfair competition law. In many other countries there is a mixture of private law, public law and even criminal law enforcement. In antitrust law a pronounced dominance of administrative law enforcement is to be observed in practice. Nevertheless, the at least theoretical possibility of private enforcement is found everywhere, and this potential requires only to be given life. The question arises of the extent to which the rich body of private law experience in unfair competition can be usefully tapped for the field of antitrust law. Before concrete proposals can be made, it is necessary to explore the reasons, that is the question of why private law enforcement works so well for unfair competition in many European countries but by contrast almost not at all for antitrust law.

Reasons for the different weight of private enforcement in unfair competition and antitrust law

The following reasons are often cited: Cartels are mostly operated covertly, while unfair competition practices have direct and visible effects on the market.

INTRODUCTION

I return now to consider the questions posed in chapter 1 of this book. My hypothesis is that legal reform is having an impact on administrative detention powers, but that the outcomes of the reform process are not predetermined as the processes of legal change are themselves dynamic and contested.

This book has addressed the ways in which processes of legal reform have impacted on administrative detention powers. I posed three questions, two of which address substantive issues. First, what are the continuities and discontinuities between administrative detention in the reform and the pre-reform era? Secondly, to what extent is it possible to trace legalisation and regularisation of these powers? Thirdly, how does the use of the legal field as an analytical construct illuminate our understanding of the process of legal change as it relates to police administrative detention powers?

WHAT ARE THE CONTINUITIES AND DISCONTINUITIES BETWEEN ADMINISTRATIVE DETENTION IN THE REFORM AND PRE-REFORM ERA?

Chapters 2 and 3 reviewed analyses of administrative detention in the pre-reform era which characterised the powers as part of the class-based, mass-line strategies that were representative of informal or populist modes of justice. This characterisation contrasts with formal modes of justice that emphasise procedural justice through reliance on codified laws and the concentration of legal authority in the ‘hands of trained specialists’.

INTRODUCTION

From the late 1940s the CCP grappled with the problems of consolidating and institutionalising its political power and restoring order. The public order situation in newly liberated cities was described as generally ‘chaotic’. From its efforts to deal with this chaotic situation at the same time as working to entrench its political power, the Party state evolved a comprehensive social order strategy in which administrative detention played an important role. In the official imagination at least, this social order strategy was so successful that the period between 1952 and 1960 was idealised as a time of ‘peace and prosperity’.

The ways in which the tasks of establishing political and social order were eventually achieved continue to influence approaches to the maintenance of social order today. They comprised strategies of education and reform, the use of administrative measures and the exercise of dictatorship, that is, the severe punishment of crime and political offences.

The political environment in which the comprehensive programme to manage social order developed in the late 1970s was different from that of the 1950s. The social and economic situation in which it was implemented was also radically altered. However, the contemporary public order programme draws on a similar mix of elements as those attributed to the 1950s and Mao Zedong: education and reform, the use of administrative measures and the severe punishment of crime.

INTRODUCTION

In the 1950s different forms of detention evolved in response to practical problems of establishing social control and to the impetus of political campaigns such as the Campaign to Suppress Counter-revolutionaries. Whilst law was not entirely absent, it tended to follow behind policies and practices. Since economic reforms were initiated in the late 1970s, the redevelopment of administrative detention powers has again been deeply influenced by their political and social order contexts, though these contexts are quite different from those of the 1950s. The possibilities for different forms of legal treatment of administrative detention are also directly influenced by the political and social order context in which those powers are developed and used. In this chapter, I set out the policy context within which police administrative detention powers have been developed and employed since the 1970s.

The social changes brought about by the economic reform programme disrupted established localised strategies for social control and crime prevention. The Party and police have responded by rejuvenating powers and reworking strategies they remember as successful in the pre-reform era. The remaking of contemporary social order policy in the shadow of its pre-reform analogue illustrates Bourdieu's observation that contemporary debates in social fields are historically and politically structured. Pre-reform strategies for social and political control have provided a vocabulary within which contemporary social order strategies have been developed, though in the process of reusing these powers in a changed social and political environment, they have been significantly altered.

INTRODUCTION

This book examines the impact of rebuilding the Chinese legal system since 1978 on the administrative detention powers of the Chinese public security organs (gong'an jiguan 公安机关, also referred to in this book as the ‘police’). The regulation and exercise of police administrative detention powers have arguably been amongst the most problematic areas in the programme of rebuilding China's legal system in the reform era. Until recently, the process of reconstructing the legal system appeared to have limited impact on the definition and exercise of these powers. This has been so for at least two reasons.

First, administrative detention powers are exercised alongside the state's criminal justice powers to target conduct considered to be socially disruptive, to maintain public order, social stability and, ultimately, political stability. Consequently, there has been a high degree of political sensitivity surrounding these powers. Deng Xiaoping repeatedly asserted that success of the economic modernisation programme was premised on order and stability, a demand reiterated by Jiang Zemin. The maintenance of social control since the introduction of the economic modernisation policy in December 1978 has been so important that it has led sociologist Borge Bakken to comment that the policy of social control itself ‘has been one of the crucial pillars of reform’.

In recent years, problems of social disorder have worsened along with the deepening of inequities arising out of economic reform. The importance to the state of maintaining social order, control and stability has, if anything, heightened.

INTRODUCTION

The Party policy of ruling according to law has finally begun to have an impact on administrative detention. Despite some minor reforms, the police detention powers examined in this book have become increasingly inconsistent with the standards of the evolving administrative legal regime, both in terms of the legal basis of the powers and of the regulation of their scope and procedure. As I discussed in chapter 8, mechanisms for supervision of police detention have failed to curb abuses. With official acceptance that the law must not only protect administrative efficiency and empower the police but also protect the rights of citizens, the ongoing systemic abuse of these powers by local police is becoming socially and politically unjustifiable. There is a recognition that these powers, if they are to be retained, must be reformed to make them more compatible with the developing legal framework and that there is a need to create a rational structure for the coercive powers of state. Where a decision is made not to reform, or where a power cannot be reformed, the conditions are now conducive for their abolition.

Legal reform of administrative detention powers has begun, usually taking the form of incremental changes to regulation of the power and to the principles for exercise of that power. Occasionally, reform takes a form that is dramatic and thoroughgoing. An example of such radical reform occurred in 2003.

INTRODUCTION

This book posits the legal field as a conceptual framework through which to inquire into the growing force of law in ordering Chinese administrative detention powers and to frame my questions about the processes of legal change.

This chapter sets out Bourdieu's concept of the juridical field and considers how this idea may be applied to an examination of legal change in China. It considers the literature on Chinese legal reforms which suggest that conditions now exist for the emergence of such a field. In particular, I consider the literature examining the extent to which the state's instrumental uses of law have either changed or weakened and conclude that, whilst instrumental uses of law remain pronounced, the Party no longer controls all uses and interpretations of law. In the reform era, the increasing range and complexity of matters regulated by law has enabled a greater number of actors and institutions to participate in developing legal norms and theory and to use law for their own ends. Within the bounds of Party policy, this pluralisation of interests in and uses of law has created a greater scope for these actors to adopt diverging positions in relation to the law.

Bourdieu suggests the juridical field is neither completely determined by state and political power, nor completely autonomous from it. The juridical field constitutes a metaphorical space where a range of different self-interested legal actors compete over the production and interpretation of the law, where these competitions are themselves historically and politically structured.

This book started its life in 1994 when I was sitting in a library in China and came across some handbooks of police regulations that had been misfiled. These handbooks opened the door to research on an area that has taken me twelve years to complete. Throughout the extended period of this project, I have accumulated many debts to a large number of people who have helped and supported me in different ways.

My friends in China have helped me find documents and material; discussed ideas and laws; and aided my understanding of the changing organisation and culture of power, which, from the outside, often appears incomprehensible. I thank them especially because many had real doubts about the advisability of a project on police detention powers, but nevertheless assisted me however they could.

Mal Smith was a friend and mentor for many years. He encouraged me to start this project and to complete it. He is sorely missed. This work was submitted as a PhD thesis at the University of Melbourne in 2004. I owe a great debt of gratitude to my supervisors Michael Dutton and Pip Nicholson. They did more to assist me with this project than supervisors should humanly be asked. Without their comments, criticisms, advice and unswerving support, this project would not be what it is now. All errors of course are mine.

INTRODUCTION

In chapters 4, 5 and 6, my examination of the development of administrative detention powers in the context of social order policy since the late 1970s has shown the perseverance of political and administrative definitions of both the scope and procedures for imposing administrative detention. Although the purposes for the imposition of administrative detention are now more pragmatic than ideological, administrative detention remains a flexible tool for use by the public security organs.

The focus of the inquiry changes in chapters 7, 8 and 9 to consider administrative detention from the point of view of the legal system. I examine developments in the legal regulation of administrative powers of state organs and how they impact on administrative detention.

In this chapter, I first discuss Party leadership of the public security organs, both organisational and ideological, and of enforcement policy. I contend that legalisation of police power occurs within the parameters of Party leadership and that the authority of the Party in advocating ‘governance according to law’ has given impetus to efforts to legalise and regularise police power.

I then focus on two interrelated issues. First, the process of legalisation and rationalisation of state power since 1978 and how this has impacted on police administrative detention powers. I consider the extent to which the developments in the legal system under the policy of ‘administration according to law’ (yifa xingzheng 依法行政) have created pressure for administrative detention powers to be structured legally rather than politically and administratively.

INTRODUCTION

In this chapter I trace the parallel development in the reform era of two administrative detention powers: detention for education of prostitutes and clients of prostitutes and coercive drug rehabilitation of drug addicts. These powers were both used by the CCP from around 1949. At that time, these powers, in combination with other measures, were deemed to be so successful that, according to official accounts, the problems of prostitution and drug addiction were eliminated and the powers rendered obsolete. They were both revived at the beginning of the reform era as part of the strategy for dealing with the deterioration of social order and the ‘social vices’ that were identified as part of the fourth ‘high tide’ of crime discussed in chapter 4.

Like RETL, these powers officially form part of the ‘second line of defence’, the ostensible purpose of which is to prevent bad and morally blameworthy conduct from deteriorating further into crime; and which have been used as an adjunct to anti-crime campaigns. Unlike RETL, both powers are directed at very specific targets, were officially abolished and only revived later during the 1970s and 1980s. The reinstatement of these powers took place after the decision was made to rebuild China's legal system. The ways in which these powers have developed from the late 1970s thus provides a very good example of the ways in which the Chinese state has managed legal reform in the context of social order.