Competition Law in Station Retail Concessions — China

1. Introduction

“Station retail concessions” may include the granting of exclusive or preferential rights to operate shops, convenience stores, food outlets, vending facilities, advertising retail spaces, fuel-related retail facilities, passenger-service stores, or other commercial concessions within railway, metro, bus, airport, highway-service, or transport stations.

Chinese competition law does not prohibit exclusivity merely because a concession is exclusive. The principal question is whether the concession arrangement, particularly when imposed by an undertaking with substantial market power or by a public authority, eliminates or restricts competition in a relevant market.

The principal legislation is the Anti-Monopoly Law of the People's Republic of China (AML), as amended in 2022. Article 22 prohibits a dominant undertaking, without justifiable reasons, from requiring trading counterparts to deal exclusively with itself or with designated undertakings.

Accordingly, station retail concessions should be examined through several possible theories:

1. abuse of dominant market position;
2. exclusive dealing or designated dealing;
3. tying or unreasonable additional conditions;
4. discriminatory concession conditions;
5. refusal to deal or exclusion from station retail space;
6. anticompetitive administrative allocation of concession rights;
7. anti-competitive tendering or concession procedures; and
8. merger/control issues where a concession operator acquires control over competing retail facilities.

2. Relevant Chinese Legal Framework

A. Article 22 — Abuse of Dominant Market Position

Article 22 of the amended AML prohibits a dominant undertaking from, without justifiable reasons:

• refusing to deal;
• requiring trading counterparts to deal exclusively with it or its designated undertaking;
• imposing tying arrangements or unreasonable trading conditions;
• applying discriminatory trading conditions to similarly situated counterparties; or
• engaging in other forms of abusive conduct. 

For station concessions, the most important provision is therefore Article 22(1)(4) concerning exclusive/designated dealing.

Example

Suppose a railway-station operator controls virtually all commercially viable retail space in a particular station and requires every concessionaire:

“You may operate here only if you purchase all beverages from Company X.”

If Company X or the station operator has dominance in the relevant market and the arrangement produces exclusionary effects without sufficient justification, Article 22 may become relevant.

3. Relevant Market

Market definition is critical.

A station concession does not automatically constitute the entire retail market of the city.

Depending on the circumstances, possible relevant markets may include:

• retail concession services within a particular railway station;
• convenience-store retail services within a station;
• food-and-beverage retail services within a transport hub;
• commercial leasing/concession services within a particular transport facility;
• advertising-related commercial space within stations;
• retail services for passengers within a geographically confined station area.

The Chinese Supreme People's Court has emphasized that relevant-market definition must consider the actual substitutability of products/services and geographical conditions. The 2026 agricultural-market case, for example, treated the relevant market as geographically limited because transportation and perishability materially restricted substitution.

Thus, a station operator could potentially possess substantial market power even if it does not dominate ordinary retail commerce throughout the entire city.

4. Exclusive Station Concession

An exclusive concession can take several forms.

Type 1 — Exclusive retail operator

A station gives all convenience-store space to Company A.

Type 2 — Exclusive product supplier

The station requires concessionaires to purchase beverages, snacks, tobacco substitutes, advertising services or other inputs only from a designated supplier.

Type 3 — Exclusive category

A station awards the entire coffee, food, pharmacy or convenience-store category to one operator.

Type 4 — Non-compete clause

The concessionaire is prohibited from operating another outlet in a competing nearby station.

Type 5 — “Two-choice” arrangement

A station operator tells a concessionaire:

operate here exclusively or lose the station concession.

This is particularly relevant to China's developing jurisprudence on “二选一” (“choose one of two”) arrangements.

5. Six Important Chinese Case Laws

The following cases are particularly useful for analysing station retail concessions. Some are not literally station-retail disputes; they are analogous Chinese authorities concerning exclusive dealing, concession rights, public infrastructure and market dominance.

Case 1 — Tan v. Agricultural Products Company (2025/2026)

Supreme People's Court, (2025) Zui Gao Fa Zhi Min Zhong No. 777

This is one of the most directly relevant recent authorities.

A company operated a major vegetable wholesale logistics market. A tenant entered into a long-term lease containing an exclusivity condition. The tenant was effectively prohibited from operating in a competing market.

When the tenant nevertheless operated in the competing market, the operator increased the tenant's service charges to three times the normal level and required the tenant to choose between the two markets.

The Supreme People's Court held that the operator had market dominance in the relevant vegetable wholesale stall-leasing market and that the contractual restrictions, reinforced by punitive charges, constituted exclusive dealing/limited dealing prohibited by the Anti-Monopoly Law.

Importance for station concessions

This case is highly relevant where:

• a station operator controls scarce retail locations;
• a concession agreement contains exclusivity;
• a competing station or retail facility is involved; and
• higher rents, penalties or termination threats are used to enforce exclusivity.

The case demonstrates that exclusivity combined with economic pressure can amount to prohibited exclusive dealing.

Case 2 — Weihai Water Group Case

Supreme People's Court, (2022) Zui Gao Fa Zhi Min Zhong No. 395

This is a leading Chinese case on implicit exclusive dealing.

The water company was the sole public water supplier in the relevant area and also participated in water-facility construction activities.

Its service guidance listed the water company and its subsidiaries but did not adequately inform customers that they could choose other qualified enterprises.

The Supreme People's Court concluded that this could amount to implicit or indirect exclusive dealing, because the conduct materially restricted customers' freedom to choose competing suppliers.

The Court emphasized that exclusive dealing need not be expressly stated in a contract.

Importance for station concessions

This principle is directly applicable to a station operator that does not expressly say:

“You must use our designated retailer.”

but nevertheless:

• lists only its affiliated retailer;
• directs concession applicants exclusively to its own subsidiary;
• provides information only about the designated operator;
• controls access procedures in a manner that effectively excludes competitors.

The substance of the arrangement, rather than its contractual wording, is important.

Case 3 — China Super League Image Rights Case

Supreme People's Court, (2021) Zui Gao Fa Zhi Min Zhong No. 1790

This case concerned exclusive commercial rights to China Super League photographic resources.

An exclusive operator obtained the commercial rights through a public tender. A competing company argued that the exclusive arrangement constituted abuse of dominance.

The Supreme People's Court rejected the claim.

The Court distinguished between:

• a legally created/exclusively awarded commercial right obtained through a competitive process; and
• an abusive use of market power.

Because the exclusive authorization resulted from a public competitive tender and had a legitimate commercial basis, the exclusivity itself was not treated as an abuse of dominance.

Importance for station concessions

This case establishes an important counter-principle:

A concession does not become unlawful merely because it is exclusive.

If a railway, airport, metro or stadium authority:

1. openly invites bids;
2. establishes transparent eligibility requirements;
3. allows genuine competition between bidders;
4. selects the successful bidder through a competitive process; and
5. grants an exclusive concession for legitimate operational reasons,

the resulting exclusivity may be considerably easier to justify.

The legal problem arises when exclusivity is used to foreclose competition, rather than being the result of competition.

Case 4 — Pharmaceutical API / Fuyang-type Exclusive Supply Case

Supreme People's Court, (2020) Zui Gao Fa Zhi Min Zhong No. 1140

This dispute concerned the supply of an active pharmaceutical ingredient.

The alleged dominant supplier was the only supplier of an essential patented ingredient and allegedly required the downstream producer to purchase exclusively from it.

The Supreme People's Court explained the elements of prohibited exclusive dealing:

1. the undertaking must possess market dominance;
2. there must be direct or indirect exclusive dealing;
3. the conduct must have exclusionary or restrictive competitive effects; and
4. the defendant may rely on a legitimate justification. 

The Court ultimately found that the particular conduct fell within the legitimate scope of the patent rights and therefore did not establish abusive exclusive dealing on the evidence.

Importance for station concessions

The case is important because it demonstrates that market foreclosure alone is not enough.

A station operator may have legitimate reasons for exclusivity, such as:

• passenger safety;
• food hygiene;
• security;
• operational compatibility;
• investment protection;
• intellectual-property protection;
• quality-control requirements; or
• infrastructure-specific technical requirements.

But the justification must be genuine and proportionate.

Case 5 — “给排水” Public-Utility Case

Supreme People's Court, (2022) Zui Gao Fa Zhi Min Zhong No. 395

This is technically the same judgment as the Weihai Water Group case but is frequently treated in Chinese judicial materials as the leading “water-supply and drainage public-enterprise abuse of dominance” case.

The Court stressed that a public utility with exclusive or quasi-exclusive market power carries a heightened responsibility when it also performs regulatory or administrative functions.

The company had listed itself and its subsidiaries in its service procedures without adequately informing users about competing qualified providers. The Court considered this an implicit restriction on customers' choice.

Importance for station concessions

The analogy is particularly strong for:

• railway-station operators;
• airport operators;
• metro operators;
• highway-service-area operators;
• government-controlled transport hubs; and
• other infrastructure operators with control over scarce commercial space.

Where the infrastructure operator simultaneously controls access, licensing, allocation and commercial operations, its conduct may receive particularly close scrutiny.

Case 6 — 2026 Agricultural Wholesale “Two-Choice” Case

Supreme People's Court, (2025) Zui Gao Fa Zhi Min Zhong No. 777

The Supreme People's Court's 2026 Anti-Monopoly Typical Cases specifically identified this case as involving forced “二选一”.

The market operator controlled around 90% of local vegetable supply and imposed an exclusivity condition on an individual trader. The operator then used a threefold service charge as a coercive mechanism to force the trader to abandon a competing market.

The Supreme People's Court held that the combination of:

• market dominance;
• contractual exclusivity;
• prohibition on competing-market participation; and
• punitive differential charges

constituted prohibited limited/exclusive dealing.

Importance for station retail

This is especially relevant where a station concession agreement provides:

• termination for operating elsewhere;
• rent increases for dealing with competitors;
• loss of deposits;
• withdrawal of concession rights;
• higher service fees; or
• reduced access to station facilities

if the concessionaire also operates in another competing station.

6. Judicial Test for Exclusive Station Concessions

The Supreme People's Court's judicial interpretation provides a particularly useful framework.

A dominant undertaking may engage in prohibited limited dealing where it:

• directly restricts the counterparty;
• imposes contractual conditions that indirectly restrict it;
• provides transaction guidance that effectively limits choice; or
• prevents the counterparty from dealing with specified competitors,

and the conduct excludes or restricts competition.

Courts may consider:

1. Scope of exclusivity

Does the restriction cover:

• one product?
• an entire product category?
• one station?
• multiple stations?
• an entire city?

Broader restrictions create greater foreclosure concerns.

2. Duration

A six-month exclusive concession and a 20-year exclusive concession raise materially different competitive questions.

3. Market foreclosure

The court can consider whether the arrangement:

• increases entry barriers;
• increases competitors' costs;
• prevents rivals from obtaining viable retail space; or
• substantially forecloses the market.

4. Choice of the counterparty

If retailers have realistic alternative stations, the competitive concern may be lower.

If the station is effectively indispensable because of:

• passenger volume;
• location;
• transport connectivity;
• absence of alternative premises;

the exclusionary effect may be stronger.

5. Consumer choice

The Supreme People's Court specifically identifies whether exclusivity substantially deprives transaction counterparts of autonomous choice as a relevant consideration.

7. Station Operator's Market Power

Market dominance should not simply be assumed from ownership of a station.

The relevant questions include:

• How many competing stations exist?
• Can retailers reasonably operate outside the station?
• Is the station commercially indispensable?
• What proportion of passenger traffic does it capture?
• Are there nearby substitute retail locations?
• Can passengers reasonably access those alternatives?
• Does the station control multiple facilities?
• Does the operator control the majority of commercially valuable station space?

A station operator may have substantial market power even without a nationwide monopoly if the relevant market is geographically narrow.

8. Exclusive Concessions and Tendering

Competitive tendering is an important defence.

An exclusive station concession is less problematic where:

• the concession was publicly advertised;
• several independent bidders participated;
• selection criteria were objective;
• bidders had equal access to information;
• the concession period is commercially justified;
• the exclusivity is necessary to recover investment; and
• the concession does not unnecessarily foreclose competing markets.

The China Super League case illustrates this distinction: the Court considered an exclusive right obtained through competitive public tender materially different from an exclusionary exercise of market power.

9. Administrative Monopoly Issues

Station retail concessions can also involve administrative monopoly, particularly where a government agency or public infrastructure entity:

• directly selects one retailer;
• prohibits competitors from entering;
• establishes discriminatory qualification requirements;
• allocates all station retail space to an affiliated enterprise;
• requires subordinate stations to purchase from a designated enterprise; or
• creates rules favouring a particular operator.

The AML separately prohibits administrative organs and organizations exercising public-administration functions from abusing administrative power to eliminate or restrict competition.

The Supreme People's Court has emphasized that an exclusive concession granted by a public authority without a fair, open and lawful competitive process can raise serious competition concerns.

10. Tying and Bundling

Station concessions may also involve tying.

Example

A station grants a food concession only if the concessionaire agrees to:

• buy beverages from the station's affiliated supplier;
• purchase advertising from the station's designated company;
• use a particular payment system;
• purchase logistics services from a designated provider.

If the station operator has dominance, such arrangements may potentially fall under Article 22(1)(5) concerning tying or unreasonable additional conditions.

The competition authority/court would examine whether the additional condition is genuinely necessary or instead functions as a mechanism for extending market power into an adjacent market.

11. Discriminatory Concession Terms

Article 22 also prohibits unjustified differential treatment among trading counterparts in equivalent circumstances.

For example, suppose:

If the retailers are similarly situated and the station operator possesses dominance, unexplained discriminatory terms could support an abuse-of-dominance theory.

The 2026 Supreme People's Court case concerning differential treatment in an industrial wastewater market confirms that differences in trading conditions can themselves raise Article 22 concerns where the relevant circumstances are equivalent.

12. Legitimate Reasons for Station Exclusivity

Exclusivity is not automatically illegal.

Potential legitimate justifications include:

A. Investment protection

The operator may require a period of exclusivity to enable the concessionaire to recover substantial investment.

B. Food safety

A station may impose centralized procurement to ensure:

• food safety;
• traceability;
• quality control.

C. Passenger safety

Transport hubs may need centralized control over particular products or services.

D. Operational efficiency

One concessionaire may be necessary to avoid congestion or duplication of facilities.

E. Security

Airports and certain railway facilities may impose strict restrictions on suppliers and access.

F. Intellectual-property protection

A concession may concern branded or proprietary commercial rights.

The Supreme People's Court's judicial interpretation recognizes legitimate reasons including protection of consumers, safety, intellectual property, data security and protection of specific investments.

13. When the Arrangement Becomes High-Risk

A station concession becomes particularly competition-sensitive where several factors exist simultaneously:

Dominant station operator

↓

Scarce/essential retail space

↓

Long-term exclusive concession

↓

Prohibition on dealing with competing stations

↓

Penalty or termination for breach

↓

High market coverage

↓

Competitors cannot obtain equivalent locations

↓

Consumer choice substantially reduced

This combination creates a strong potential market foreclosure theory.

14. Penalties and Enforcement

Under the amended AML, where an undertaking concludes and implements a prohibited monopoly agreement, authorities may order cessation, confiscate unlawful gains and impose fines within the statutory framework.

For abuse of dominance, enforcement can similarly involve:

• cessation orders;
• confiscation of unlawful gains;
• administrative fines;
• corrective measures; and
• potentially civil damages in private litigation.

The AML also provides for private civil actions, making contractual counterparties important potential claimants.

15. Practical Compliance Framework for Station Operators

A Chinese station operator contemplating an exclusive retail concession should document:

Before tender

• relevant-market analysis;
• availability of alternative retail locations;
• market share;
• necessity of exclusivity;
• expected foreclosure effects.

During tender

• public and transparent bidding;
• equal access to information;
• objective selection criteria;
• non-discriminatory qualification conditions.

In the concession agreement

Avoid unnecessarily broad:

• non-compete clauses;
• exclusive purchasing requirements;
• resale-price controls;
• tying clauses;
• indefinite exclusivity;
• punitive termination mechanisms.

During operation

Periodically assess:

• whether competitors remain able to enter;
• whether the concessionaire's market share has become excessive;
• whether exclusivity remains necessary;
• whether competing retailers receive equal opportunities.

16. Key Case-Law Principles — Summary

17. Conclusion

Under Chinese competition law, station retail concession exclusivity is not per se unlawful. The decisive issue is whether the concession is being used by a dominant or administratively powerful operator to foreclose competing retailers, suppliers or concessionaires without sufficient justification.

The strongest legal distinction is between:

Competitive exclusivity

Transparent tender → genuine competition → objectively selected concessionaire → commercially justified exclusivity

and

Exclusionary exclusivity

Dominant station operator → scarce/essential premises → compulsory exclusivity → penalties or termination → foreclosure of rival retailers.

The recent Supreme People's Court jurisprudence is particularly important because it recognizes that exclusive dealing can be direct or indirect, including through contractual conditions, service guidance, differential charges or other mechanisms that effectively deprive counterparties of freedom of choice.

Therefore, in a Chinese station-retail-concession dispute, the principal analytical sequence should be: