The Research On The Antitrust Law Of The Nonprofit Organization

Nonprofit organization (NPO) is one of the basic forms of social organization.Some developed countries such as the United States, the United Kingdom as well asCanada have paid more and more attention on the development of NPOs in the21stcentury. NPOs are playing an increasingly important role in economy, politics, cultureand international affairs. However, there is little concern of NPO’s monopolization andcompetition restriction.As the Economic Constitution of market economy country, the antitrust lawshould be applied to all market players, including non-profit organizations andprofit-seeking organizations. However, the antitrust law was not applied to NPOs fromthe very beginning even in United States, where antitrust law was well developed. Thebasic purpose of antitrust law is to control concentration of economic power andmonopolistic behavior of enterprises, and NPOs were exempt from the review of theantitrust law in the early period of the antitrust law for the reason that they were notcommercial. And at the same time, there existed a tradition of industry exemption inAmerican, and most Americans agree industry associations as Nonprofit organizationsare independent from profit seeking organizations and should be self-managed whichwould be more effective than law-governing. In addition, the antitrust law aims topromote competition and economic efficiency, safeguard social fairness and concernfor the interests of consumers, which are important dimensions of public interest. Andthe antitrust law represents public interest which is consistent in the pursuit of theinterests with antitrust NPOs, therefore, NPOs got the antitrust exemption.With the development of economy, the problem of competition restriction aroseup, and the U S antitrust law started to pay attention to the activities of NPOs. From1960s, the scope of U S antitrust law application was gradually expanded and the scopeof exemption was shrinking. Regarding to the exemption from the antitrust laws forNPOs, economists and sociologists take a critical attitude and believe that NPOs aswell as other business organizations are pursuing profit maximization and thereforeshould not be exempted from the antitrust law. Indicated by a large number of casesfollowed, not only some of the traditional non-profit organizations such as hospitals,schools but also professional industry associations even state administration began toenter the vision of antitrust field. The fundamental basis of the U S antitrust law to determine illegal restriction ofcompetition is Sherman Act1, while the judges of the United States had differentinterpretations in the judicial practice, which formed two basic methods of modernantitrust analysis, namely Illegal per se rule and the rule of reason, and these methods arethe basic methods in analyzing the behavior of competition restriction of NPOs. Basedon different types of nonprofit organizations, the paper argues that enforcementagencies and courts are using different analysis methods in antitrust problem of NPOs.Competition restriction of entrepreneurial nonprofit organizations should be based onthe nature of the act and apply self-illegal or reasonable rule for analysis whilerestriction of competition for the non-profit organizations should apply reasonable rulefor analysis. In addition, NPOs should be different in judicial liability bearingcompared with that of business enterprises.As a developing country, China has made no unified legal and strict definition anddivision of nonprofit organizations, and Chinese law has no explicit statementregarding NPOs’ competition restriction behavior. The implementation body ofcompetition restriction behavior in the legislation and practice in China is confined toenterprises, a large number of NPOs in education, health care, sports, charitable andculture are excluded from the application scope of antitrust law. With the improvementof people’s living standards and the increasing demand for public goods, competitionrestriction of NPOs are gaining more attention, which would not only affects theprocess of China’s further reform of social institutions but also undermines consumer’sinterests. This article discusses the applicability of antitrust law to China’s NPOs fromthe experience of developed countries, which would have important practicalsignificance.