Competition Law in Crematorium Furnace Servicing — China

1. Introduction

Crematorium furnace servicing covers inspection, preventive maintenance, repair, replacement of refractory materials and components, calibration, emissions-control servicing, software/controls maintenance, emergency repairs and technical support for cremation furnaces.

In China, competition-law issues can arise where a crematorium operator, furnace manufacturer, equipment supplier, or affiliated maintenance company uses a monopoly or quasi-monopoly position to:

• require crematoria to use only its maintenance services;
• restrict access to spare parts, technical information or diagnostic software;
• tie furnace servicing to the purchase of equipment or consumables;
• refuse to supply essential spare parts or technical support;
• impose discriminatory maintenance terms;
• allocate servicing territories or customers;
• require exclusive long-term maintenance contracts;
• prevent independent maintenance companies from servicing furnaces; or
• coordinate prices or customers among competing maintenance providers.

This area is particularly important because cremation is closely connected with basic funeral services, and Chinese courts have specifically recognised that certain basic funeral-service providers can occupy a dominant position. In 2025, the State Administration for Market Regulation also conducted a dedicated anti-monopoly compliance session concerning the funeral-services sector.

2. Applicable Chinese Competition Law

The principal statute is the Anti-Monopoly Law of the People's Republic of China (AML), as amended in 2022.

The principal provisions relevant to crematorium furnace servicing are:

Article 6 — Abuse of Dominant Market Position

An undertaking with a dominant market position may not abuse that position to eliminate or restrict competition.

This becomes relevant where a crematorium operator or furnace manufacturer controls an essential input or service and uses that position against competing maintenance providers.

Article 22 — Specific Abuses

Particularly relevant forms include:

1. Refusal to deal;
2. Exclusive or restricted dealing;
3. Tying or imposing unreasonable additional conditions;
4. Discriminatory treatment;
5. Other conduct that eliminates or restricts competition.

The 2026 public-utility antitrust guidance specifically identifies situations where a dominant utility requires customers to purchase engineering services or equipment/materials from itself or a designated operator, or indirectly forces such selection through service procedures, catalogues or management systems.

Although a crematorium is not automatically classified as a "public utility" for every legal purpose, the reasoning is highly relevant where cremation services have a locally exclusive or legally protected character.

3. Relevant Market

A furnace-servicing dispute may require several possible market definitions.

A. Crematorium furnace servicing market

The relevant market could potentially include:

• preventive maintenance;
• corrective maintenance;
• furnace repairs;
• component replacement;
• inspection and calibration.

B. Particular furnace-brand servicing

If a furnace manufacturer controls proprietary:

• diagnostic software;
• replacement parts;
• operating codes;
• technical manuals;
• calibration equipment;

the relevant market may become narrower.

C. Spare-parts market

A separate market may potentially exist for particular furnace components if independent substitutes are unavailable.

D. Basic cremation-services market

Where the crematorium itself is using its control over cremation services to affect downstream funeral businesses, the basic funeral-services market can become the relevant market.

The Supreme People's Court has expressly analysed basic funeral services as an upstream market and funeral-intermediary services as a downstream market.

4. Market Dominance

Dominance cannot simply be assumed because an undertaking is large.

Relevant considerations include:

• market share;
• control over essential facilities;
• technological dependence;
• availability of alternative service providers;
• switching costs;
• barriers to entry;
• regulatory restrictions;
• control over spare parts;
• control over technical information;
• duration of the relationship;
• bargaining power of crematoriums;
• geographic constraints.

For example, if a city has only one authorised crematorium and that crematorium refuses to permit independent furnace-maintenance providers to work on its equipment, the competitive analysis may be considerably stronger than where ten independent servicing companies can readily access equivalent furnaces and parts.

5. Refusal to Deal

This is one of the most important theories.

Suppose:

Furnace manufacturer A supplies almost all cremation furnaces in a particular market and refuses to sell essential replacement components or provide necessary diagnostic access to independent maintenance company B.

The question is not simply whether A refused B.

The court would examine whether:

1. A has a dominant position;
2. the transaction is economically, technically, legally and safely feasible;
3. the input/service is sufficiently difficult to replace;
4. refusal eliminates or restricts competition;
5. A has a legitimate justification.

The Supreme People's Court's recent antitrust judicial interpretation specifically recognises refusal involving products, platforms, software systems, technical data, interfaces and intellectual property, while requiring consideration of economic, technical, legal and safety feasibility.

This is highly relevant to modern crematorium furnaces containing proprietary control systems.

6. Exclusive Furnace-Maintenance Arrangements

Consider:

"All maintenance, repairs and replacement parts for furnaces supplied by Company A must be purchased exclusively from Company A."

This could raise a restricted-dealing / exclusive-dealing issue where Company A has dominance.

The assessment would consider:

• proportion of the market covered;
• duration of exclusivity;
• availability of competing furnace-service providers;
• switching costs;
• whether independent repairers are effectively excluded;
• whether the restriction raises competitors' costs;
• whether customers retain meaningful choice.

Chinese judicial guidance recognises both express and implicit restricted dealing. A dominant undertaking can potentially restrict competition even without an explicit contractual exclusivity clause.

7. Tying and Bundling

A furnace manufacturer might state:

"Purchase of our cremation furnace requires you to purchase our five-year maintenance package."

This can raise tying concerns.

Other examples include:

• furnace + mandatory maintenance;
• furnace + proprietary spare parts;
• furnace + emissions-control service;
• furnace + software subscription;
• furnace + annual inspection;
• furnace + consumables.

The critical question is whether the separate products/services are being artificially linked by a dominant undertaking without adequate justification.

The Supreme People's Court's jurisprudence concerning dominant suppliers recognises the relevance of tying and additional unreasonable conditions.

8. Discriminatory Maintenance Terms

Suppose a dominant furnace-maintenance provider charges:

• Crematorium A: RMB 100,000;
• Crematorium B: RMB 100,000;
• Crematorium C: RMB 180,000,

while the customers are otherwise comparable.

This may raise discriminatory-treatment concerns if the different terms lack legitimate commercial justification and affect competition.

The 2024 SAMR compliance guidance specifically identifies differences in:

• maintenance services;
• repair conditions;
• spare-parts supply;
• technical guidance;
• warranty conditions

as potentially relevant forms of discriminatory treatment.

9. Independent Repair and "Right to Repair"

An important modern issue is whether independent maintenance companies can obtain:

• spare parts;
• diagnostic tools;
• firmware information;
• technical manuals;
• error codes;
• calibration information;
• safety specifications.

A manufacturer does not automatically have to disclose all proprietary information.

However, where a dominant undertaking controls an indispensable input and refuses access without legitimate justification, competition-law concerns become stronger.

The Chinese judicial rules expressly contemplate refusal to make software systems, technology, data and interfaces compatible or accessible.

10. Safety Justifications

Crematorium furnaces involve significant safety and environmental considerations.

Therefore, a manufacturer could have legitimate reasons for restricting third-party maintenance where necessary to protect:

• operator safety;
• emissions compliance;
• furnace integrity;
• fire safety;
• software security;
• calibration accuracy;
• environmental-control systems.

Competition law does not mean that every independent repair company must automatically receive unrestricted technical access.

The important distinction is between a genuine safety requirement and using safety requirements as a pretext to exclude competitors.

The 2026 public-utility guidance recognises legitimate reasons including protection of specific investments and other objectively justified requirements.

11. Administrative Monopoly

A further issue arises where a local authority or public-sector entity:

• designates one furnace-maintenance company;
• prohibits other qualified providers;
• requires crematoriums to use a government-selected contractor;
• creates licensing rules favouring one provider without adequate justification.

Such conduct may raise issues under the AML provisions concerning administrative power being used to eliminate or restrict competition.

This is especially important where the furnace-maintenance provider is connected with the local funeral-administration system.

12. Six Important Case Laws

Because there are relatively few reported Chinese cases specifically concerning crematorium-furnace maintenance, the following cases should be used as direct or analogous authorities rather than suggesting that all six arose from furnace servicing.

Case 1 — Quanzhou Lisheng Funeral Service Co. v. Quanzhou Jiying Funeral Service Co.

Supreme People's Court, (2021) Supreme People's Court Intellectual Property Civil Final No. 242

This is the most directly relevant authority.

Jiying provided basic funeral services including transportation, storage and cremation and held a locally exclusive position in the relevant basic funeral-services market. It refused to process cremation applications submitted by Lisheng, a funeral intermediary.

The Supreme People's Court held that:

• basic funeral services constituted the upstream market;
• funeral-intermediary services constituted the downstream market;
• Jiying possessed a dominant position in the relevant local market;
• the basic cremation service was indispensable to Lisheng's downstream activity;
• Lisheng had no effective substitute;
• refusal excluded Lisheng from the downstream market; and
• the refusal therefore constituted abuse of dominant position.

The Court ordered restoration of the previous trading relationship, subject to applicable legal and industry requirements, and awarded RMB 80,000 in damages.

Relevance to furnace servicing

If a dominant crematorium controls access to its furnaces and refuses independent maintenance providers access necessary to compete in servicing, the upstream/downstream foreclosure reasoning can become highly relevant.

Case 2 — Weihai Water Group Dominance Case

Supreme People's Court, (2022) Supreme People's Court Intellectual Property Civil Final No. 395

Weihai Water Group was the exclusive public water supplier and also performed public-service administrative functions. Its service documentation effectively directed customers toward its own or affiliated enterprises without adequately informing them of alternative qualified providers.

The Supreme People's Court held that restricted dealing may be:

• express or direct; or
• implicit or indirect.

The Court found that the conduct substantially limited the customer's freedom of choice and constituted restricted dealing.

Relevance

A crematorium or furnace supplier need not write:

"You must use our maintenance company."

A sufficiently restrictive:

• approved-vendor list;
• maintenance procedure;
• access policy;
• service portal;
• accreditation system;

could potentially have the same competitive effect if it effectively eliminates independent providers.

Case 3 — Yongfu County Water Supply Company Case

Nanning Intermediate People's Court, (2018) Gui 01 Min Chu No. 1190

The local water company had a dominant position in the relevant public-water market. It required the customer to purchase water-meter installation and related services from it without providing a genuine choice of alternative providers.

The court treated the conduct as tying/bundling and found abuse of dominant position.

Relevance

A similar structure could arise where a dominant cremation-furnace supplier says:

"You cannot purchase the furnace without purchasing our maintenance, calibration and replacement-parts package."

The legality would depend on dominance, competitive effects and legitimate technical/safety justifications.

Case 4 — Dongfeng Nissan Repair and Parts Case

Hunan High People's Court, (2012) Xiang Gao Fa Min San Zhong No. 22

A vehicle owner challenged the manufacturer's parts and repair arrangements, arguing that the manufacturer's authorised repair system restricted competition.

The court ultimately rejected the abuse-of-dominance claim because the evidence did not establish the defendants' dominance in the relevant market.

Importantly, the court considered the relevant parts market more broadly, including both manufacturer parts and substitute non-original parts.

Relevance

This case is particularly useful for crematorium-furnace servicing because it demonstrates that:

A manufacturer's control over its own branded equipment does not automatically establish dominance in every associated repair or parts market.

The availability of technically substitutable components and alternative servicing providers may materially affect market definition.

Case 5 — "Clodronic/Desloratadine API" Dominance Case

Supreme People's Court, (2020) Supreme People's Court Intellectual Property Civil Final No. 1140

A pharmaceutical company controlled an important patented active pharmaceutical ingredient and allegedly restricted the purchaser to obtaining the ingredient exclusively from it.

The Supreme People's Court nevertheless concluded that the evidence did not establish unlawful abuse in the circumstances. The Court emphasised:

• the existence of patent rights;
• downstream competitive constraints;
• the extent of market foreclosure;
• whether the restriction went beyond legitimate patent exclusivity.

Relevance

A furnace manufacturer may have intellectual-property rights over:

• control software;
• diagnostic systems;
• furnace designs;
• proprietary components.

A contractual restriction arising from legitimate IP rights is therefore not automatically an antitrust violation. The crucial question is whether the restriction exceeds legitimate IP protection and produces unlawful competitive foreclosure.

Case 6 — "Basic Funeral Services" Public-Enterprise Refusal-to-Deal Case

This is the same Supreme People's Court decision in (2021) Supreme People's Court Intellectual Property Civil Final No. 242, but it is worth treating separately in an examination answer because of its specific doctrinal significance concerning public-service monopolies and essential upstream services.

The Court stressed that where a dominant public-service undertaking provides a service indispensable to a downstream market, refusal to provide that service can have competitive effects beyond the immediate transaction.

The Court also held that restoration of an established trading relationship does not necessarily constitute an impermissible forced-dealing order where restoration merely re-establishes the previous competitive relationship.

For an academic answer, however, do not count this as a separate factual case from Case 1; it is the same judgment. For a strict "six distinct cases" requirement, the analogous cases above should be supplemented with other Chinese refusal-to-deal, public-utility and exclusive-dealing authorities rather than presenting duplicate citations as separate cases.

13. A Particularly Important 2026 Development

China's Supreme People's Court issued six new antitrust typical cases on 10 September 2026.

They cover:

• restricted dealing;
• discriminatory treatment;
• unfairly high prices;
• horizontal cartel conduct;
• antitrust administrative penalties; and
• administrative guidance.

The cases include disputes involving electroplating wastewater treatment and pipeline steam, which are particularly useful analogies for crematorium furnace servicing because they concern essential/industrial support services and upstream-downstream competitive effects.

The 2026 cases demonstrate increasing judicial attention to the distinction between:

legitimate technical/commercial restrictions and restrictions that actually foreclose competition.

14. Application to Common Crematorium-Furnace Scenarios

15. Economic Effects

Competition authorities would likely examine whether the servicing restriction:

A. Raises rivals' costs

Independent maintenance firms may have to purchase expensive diagnostic equipment or obtain restricted parts.

B. Creates switching costs

A crematorium may become effectively locked into one supplier.

C. Forecloses competitors

If independent maintenance firms cannot obtain parts or technical information, they may exit the market.

D. Increases prices

Reduced competition can permit higher maintenance and repair prices.

E. Reduces service quality

A monopoly maintenance provider may face weaker incentives to provide:

• rapid emergency repairs;
• preventive maintenance;
• technical innovation;
• transparent pricing.

F. Affects downstream funeral services

Where furnace access is indispensable to cremation, restrictions on servicing can indirectly affect funeral-service intermediaries and ultimately families using funeral services.

The Quanzhou funeral case is particularly important because the Supreme People's Court expressly examined effects on the downstream funeral-intermediary market and consumers.

16. Defences Available to the Furnace Supplier

A maintenance restriction should not automatically be characterised as anticompetitive.

Potential justifications include:

1. Safety

Only properly trained technicians may safely service high-temperature equipment.

2. Environmental compliance

Incorrect maintenance may cause emissions-control failures.

3. Product integrity

Improper repair could damage the furnace.

4. Cybersecurity

Connected furnace-control systems may require controlled access.

5. Intellectual property

Diagnostic software or proprietary designs may legitimately be protected.

6. Warranty protection

A manufacturer may establish reasonable warranty conditions.

7. Specific investment

A supplier may need to protect substantial investment made specifically for a particular customer.

The legal question is whether the restriction is necessary and proportionate, or whether the stated justification is being used to eliminate otherwise viable competition.

17. Compliance Framework for Crematorium Operators

A crematorium should maintain:

1. transparent procurement rules;
2. objective technical qualifications;
3. non-discriminatory access to maintenance contracts;
4. documented safety standards;
5. competitive tendering where feasible;
6. separation between technical certification and commercial preference;
7. objective criteria for spare-parts approval;
8. records explaining refusal of third-party servicing;
9. independent review of exclusivity clauses;
10. competition-law review of long-term maintenance agreements.

A furnace manufacturer should similarly avoid automatically imposing:

• perpetual exclusivity;
• unnecessary territorial restrictions;
• anti-independent-repair clauses;
• discriminatory spare-parts pricing;
• retaliation against customers using competitors.

18. Remedies

Potential remedies under Chinese competition law can include:

• cessation of the unlawful conduct;
• restoration of lawful trading;
• removal of restrictive contractual provisions;
• administrative penalties where applicable;
• damages in private litigation;
• reasonable litigation/anti-monopoly enforcement expenses;
• other corrective measures.

The Quanzhou case is especially significant because the Supreme People's Court ordered restoration of the prior commercial relationship and awarded RMB 80,000 damages.

19. Exam-Oriented Legal Test

For a problem concerning crematorium furnace servicing exclusivity, use this sequence:

Step 1 — Identify the undertaking

Furnace manufacturer / crematorium / maintenance company / public enterprise.

↓

Step 2 — Define the relevant market

Furnace servicing / spare parts / specific-brand servicing / basic cremation services.

↓

Step 3 — Establish dominance

Market share + alternatives + barriers + regulatory position + technical dependence.

↓

Step 4 — Identify conduct

Refusal / exclusivity / tying / discrimination / excessive pricing / cartel.

↓

Step 5 — Examine foreclosure

Does the conduct eliminate or restrict competing maintenance providers?

↓

Step 6 — Examine indispensability

Can the crematorium reasonably obtain equivalent servicing elsewhere?

↓

Step 7 — Examine justification

Safety / environmental compliance / IP / warranty / specific investment.

↓

Step 8 — Examine proportionality

Is the restriction broader or longer than reasonably necessary?

↓

Step 9 — Assess downstream effects

Does it affect cremation services, funeral intermediaries or consumers?

↓

Step 10 — Determine remedy

Cease conduct + restore access/trading + damages/administrative measures where legally justified.

20. Conclusion

Crematorium furnace servicing in China can present significant competition-law issues where control over furnaces, spare parts, technical information or maintenance access is used to restrict competing service providers.

The most important authority is Quanzhou Lisheng Funeral Service Co. v. Quanzhou Jiying Funeral Service Co., (2021) Supreme People's Court Intellectual Property Civil Final No. 242, because it directly concerns China's funeral sector and establishes that a locally dominant provider of indispensable basic funeral services may violate the AML through unjustified refusal to deal.

For furnace servicing specifically, the Weihai Water, Yongfu Water, Dongfeng Nissan repair, and API exclusive-supply cases provide important analogies concerning implicit exclusivity, tying, market definition, repair markets, IP rights and refusal/restriction of supply. The 2026 public-utility guidance further confirms that forcing customers toward a designated provider of equipment or engineering services can be scrutinised as restricted dealing.

Core principle: ownership or technological control of crematorium equipment does not itself create an antitrust violation. The central questions are market dominance, competitive foreclosure, indispensability, the actual scope of the restriction, and whether a genuine and proportionate technical, safety, environmental or IP justification exists.