Case 4

From November 1998 to July 1999, the Hanlu Township Power Administration Office of Gaoyou City forced 850 households of inhabitants to change their electric meters on the opportunity of power grid transformation. The inhabitants were forced to buy the electric meters within the limits of the products provided by the Power Administration Office. The turnover was 110,000 RMB.

According to the result of investigation, the Administration for Industry and Commerce of Yangzhou City find that transaction of the Hanlu Township Power Administration Office violates Article 6 of the Law for Countering Unfair Competition constituting the restrictive practice. The Power Administration Office argues that its transaction is not illegal for it follows article 72 of Chapter 6 of Decree No.8 of the Ministry of Power Industry, namely Operational Rule on Electric Power Supply, i.e. the purchase, installation, relocation, replacement, rectification, remove, seal and unseal of electric meter shall be conducted by the power supply enterprise.

The Jiangsu Provincial administration for Industry and Commerce and the Administration for Industry and Commerce of Yangzhou City hold:（1）As an administrative rule, Decree No. 8 of the Ministry of Power Industry is lower than the Law for Countering Unfair Competition in validity, so that the stipulation contradicting the Law for Countering Unfair Competition is of no effect.（2）As the operation of electric meter is not monopolized, other operators may engages in the production of electric meter and distribute their products if they are qualified.（3）The transaction of the power supply enterprise forcing the users to buy the electric meters designated by itself violates Article 6 of the Law for Countering Unfair Competition, and constitutes the restrictive practice of public enterprise. The Hanlu Township Power Administration Office is imposed a fine of 50,000 RMB by the Administration for Industry and Commerce of Yangzhou City.