作者 宁宣凤、吉凯伦、尹冉冉
2011年12月30日，商务部发布了《未依法申报经营者集中调查处理暂行办法》（“暂行办法”），将于2012年2月1日正式实施。该暂行办法就达到申报标准但未依法申报的经营者集中，规定了调查处理程序。
根据暂行办法，任何单位和个人均有权向商务部举报涉嫌应报未报的经营者集中，商务部也可能通过其他途径获得相关信息。如果有初步事实和证据表明存在未依法申报嫌疑，商务部就应当立案，并书面通知被调查的经营者。
Continue Reading...By Susan Ning, Ji Kailun and Hazel Yin
On 30 December 2011, the Ministry of Commerce ("MOFCOM") promulgated the Interim Measures on Investigation and Punishment of Failure to Duly Notify Concentrations of Undertakings (《未依法申报经营者集中调查处理暂行办法》, "Interim Measures"), effective from February 1, 2012.1 The Interim Measures set down the procedures for MOFCOM to investigate and penalize companies for failure to notify a notifiable transaction in violation of the Anti-Monopoly Law ("AML").
According to the Interim Measures, MOFCOM shall initiate an investigation ("case acceptance") if there is prima facie evidence, either presented by any third party or it obtains through other channels, indicating that a company fails to notify a notifiable transaction.
By Susan Ning, Liwei Wang and Hazel Yin
On 27 December 2011, the Ministry of Commerce ("MOFCOM") made a press release on its major merger enforcement work in 2011.1 Mr. Shang Ming, Director General of MOFCOM's Anti-monopoly Bureau and Chairman of the General Office of the State Council's Anti-monopoly Commission, gave a briefing at the press release and responded to press inquiries.
According to Mr. Shang, from January to mid-December, 2011, MOFCOM received a total of 194 merger control filings, an increase of 43% compared to the same period last year. Among the received filings, 179 filings have been accepted and 160 filings have been reviewed and closed.
Of the 160 closed cases, 151 cases were granted unconditional approval (94%), 4 cases were granted conditional approval (3%), and 5 cases were withdrawn by the applicants after case acceptance (3%). A breakdown of the filings by the industrial classification for national economic activities is as follows:
Continue Reading...By Susan Ning and Yun Wang
On 29 December 2011, the Ministry of Industry and Information Technology ("MIIT") finally promulgated the Various Provisions on Regulating the Order of Internet Information Service Market ("Rules"). Viewed by many as been driven by the QQ/360 disputes in late 2010, the Rules mainly set out the code of conducts for an internet information service provider ("IISP") vis-à-vis its competitors and consumers. The Rules also create a dispute resolution mechanism between IISPs.
Continue Reading...By Susan Ning, Sun Yiming and Hazel Yin
It was reported 1 that on December 15, 2011, the Intermediate Court of Changsha, Hunan Province dismissed a consumer's complaint that automobile producer Dongfeng Nissan and its 4S store 2 abused their dominant position in violation of China's Anti-monopoly Law ("AML") by reaping exorbitant profits and expelling their competitors. The case was originally filed in November 2010 and the court hearing was held in May 4, 2011. It is the first antitrust lawsuit in the automobile industry and yet another defeated attempt by Chinese consumers in bringing AML private actions.
The plaintiff, Mr. Liu Dahua, is a Nissan car owner. In October 2009, He had his car repaired at a local 4S store of Nissan. Finding that the 4S store charged much higher price for repair services than other local auto repair factories, Mr. Liu asked the 4S store to sell the spare parts separately so he could do the repairs elsewhere. However, the 4S store turned down his request saying that Dongfeng Nissan did not allow its 4S stores to sell spare parts alone, meaning that customers could only purchase the spare parts as well as the repair services together from Dongfeng Nissan's 4S stores.
Susan Ning and Ding Liang
On December 16, 2011, the Beijing Lawyers Association organized a seminar inviting Mr. Zhou Zhigao, an official from the Price Supervision, Inspection and Anti-monopoly Bureau (Price Supervision and Anti-monopoly Bureau) of the National Development and Reform Commission (NDRC), to speak on anti-price monopoly legislation and enforcement.
By Susan Ning, Ji Kailun and Yin Ranran
On December 12th, 2011, the Ministry of Commerce ("MOFCOM") conditionally approved the acquisition of the hard disk drive ("HDD") business of the Korean Samsung Electronics ("Samsung") by the US Seagate Technology ("Seagate")1. This is the 4th conditional approval of this year and the 10th conditional approval by MOFCOM since China's Anti-Monopoly Law ("AML") entered into effect in 2008.
According to MOFCOM's announcement, this review process lasted for almost 7 months starting from May 19th when the notification was first submitted to MOFCOM. The review process entered into the Extended Phase II and was cleared on the next business day of the expiry date of this phase.2
By Susan Ning and Ding Liang
On November 14, the National Development and Reform Commission ("NDRC") announced its decision to fine two private pharmaceutical companies nearly RMB 7 million for violating the Anti-monopoly Law (AML) (please see our previous article entitled NDRC Fined Two Pharmaceutical Companies for Abusive Conducts). The NDRC's news release did not clearly indicate which article(s) of the AML the two companies have violated and the method the NDRC adopted to calculate the fine.
On December 16, Mr. Zhou Zhigao, an official from the NDRC's Price Supervision, Inspection and Anti-monopoly Bureau discussed the reasoning behind this case in a seminar. According to Mr. Zhou, the two pharmaceutical companies were fined under Article 17(3) of the AML because they abused their dominance by refusing to deal with reserpine manufacturers. He also discussed the method used in that case to calculate the fine.
By Susan Ning, Sun Yiming, Liu Jia and Yin Ranran
On December 13, it was reported that the National Development and Reform Commission (NDRC) asked China Telecom to submit more detailed "rectification proposal" in relation to its pledge for suspension of antitrust probe1. Earlier on December 2, China Telecom and China Unicom announced that they have applied to the NDRC for suspension of its antitrust investigation into their internet access pricing practices, by promising to adjust the internet access prices and overhaul their broadband services (see our article entitled "China Telecom and China Unicom Seek to Settle Antitrust Probe").
By Susan Ning, Ding Liang, Liu Jia and Sun Yiming
On November 14, the National Development and Reform Commission ("NDRC") announced its decision to fine two private pharmaceutical companies nearly RMB 7 million for violating the Anti-monopoly Law ("AML")1. The penalty decision was released right after the NDRC publicly confirmed its investigation over China Telecom and China Union for alleged abuse of dominance in the broadband market. It seemed that the NDRC could not wait to show its determination to enforce the AML with another striking case.
Continue Reading...By Susan Ning, Sun Yiming, Liu Jia and Yin Ranran
On 2 December 2011, China Telecom and China Unicom announced that they have applied to the National Development and Reform Commission (NDRC) for suspension of its antitrust investigation into their internet access pricing practices, by promising to adjust the internet access prices and overhaul their broadband services.
According to their announcements 1, China Telecom and China Unicom stated that they have proactively cooperated with the NDRC's investigation and have engaged in "self-evaluation" of the challenged pricing practices. Both companies acknowledged "room for improvement" for their interconnection services and pricing practices.
By Susan Ning, Sun Yiming and Liu Jia
On December 7, the Provisional Measures on Investigating and Penalizing Violation of Notification Obligations for Concentrations between Business Operators (Provisional Measures) were reviewed and discussed at the No. 57th Ministerial Affairs Meeting of the Ministry of Commerce (MOFCOM) and were passed in principle.1
It was discussed at the meeting that currently companies frequently ignore their merger control notification obligations under the Anti-Monopoly Law which has caused negative social impact. Under such circumstances, the Provisional Measures are expected to strengthen MOFCOM's enforcement in relation to investigation and punishment for those companies who fail to honor their notification obligations.
By Susan Ning, Ji Kailun and Yin Ranran
Only 10 days after its conditional clearance of the Alpha V/Savio deal1, the Ministry of Commerce (MOFCOM) published, on 10 November 2011, the third conditional merger clearance of this year approving the proposed joint venture between General Electric (China) Ltd. (GE China) and China Shenhua Coal to Liquid and Chemical Co., Ltd. (CSCLC)2.
This is the first conditional decision relating to a Chinese Stated-owned enterprise (SOE) and the number of MOFCOM's conditional clearance decisions is lifted to nine in total. According to MOFCOM's announcement, the review process lasted for about 7 months starting from April 13 when the notification was first submitted to MOFCOM.
Continue Reading...
By Susan Ning, Sun Yiming and Liu Jia
On November 9, 2011, an earlier rumor indicating that China Telecom is under antitrust investigation for alleged abuse of dominance in the broadband market was confirmed by the National Development and Reform Commission ("NDRC"), the authority in charge of price-related breaches of the Anti-Monopoly Law ("AML"). This is by far the first time for China's antitrust enforcement authority to conduct an antitrust investigation on large state-owned companies. It is speculated that billions of antitrust fines could possibly be levied if the violation is established.
This article is a follow-up of our previous article entitled "Chinese Antitrust Enforcement Agencies Ready to Show Teeth to Large State-owned Enterprises? ", which includes a comprehensive analysis of the claimed violation.
by Susan Ning and Liwei Wang
On September 11, 2011, the name of the previous Guangdong Provincial Price Bureau was officially changed to the PriceSupervision and Inspection and Antitrust Bureau of Guangdong Province (广东省价格监督检查及反垄断局, Guangdong PAB). In connection with the expanded scope of its administrative authority, the agency will recruit additional officials for the purpose of supporting its price inspection and antitrust functions. In addition, the administrative hierarchy of the post-reform Guangdong PAB is elevated, indicating heightened administrative authority.
Continue Reading...By Susan Ning, Liu Jia and Yin Ranran
On 31 October 2011, the Ministry of Commerce (MOFCOM) publicly announced the eighth conditional merger clearance since the enactment of the Anti-monopoly Law (AML) in 2008. According to its announcement 1 , MOFCOM cleared the proposed acquisition by Alpha Private Equity Fund V (Alpha V) of Savio group (an Italia based textile machinery producer, Savio) with four conditions. This is also the second conditional merger clearance this year 2 .
Set out below are the salient issues in relation to this conditional clearance decision.
Continue Reading...By Susan Ning and Liu Jia
On 31 October 2011, the Ministry of Commerce (MOFCOM) publicly announced the eighth conditional merger clearance since the enactment of the Anti-monopoly Law (AML) in 2008. According to its announcement1 , the review process lasted for 3.5 months starting from 14 July 2011 when the notification was submitted to MOFCOM.
Set forth below is a chart outlining the review process.
2011年7月22日，美国华盛顿州通过了修改其《反不正当竞争法》的议案，新增一章名为《产品销售-窃取或盗用信息技术》的新法（以下简称“新法”）。根据该法律规定，在生产、经营中使用假冒盗版信息技术产品（包括假冒硬件产品和软件产品）并拒不改正的产品制造商，无论其违法行为发生在何处，只要其产品在华盛顿州销售或者许诺销售，都将可能构成不正当竞争，从而导致其在美国华盛顿州被政府或其竞争者起诉，并可能因此导致货物在美国被扣押、被禁止销售、以及被判令支付赔偿金，甚至惩罚性赔偿。该法案的颁布和实施虽然远在美国华盛顿州，但却对于全球所有向美国出口的制造业企业均有影响。中国被视为“世界工厂”而美国又是“中国制造”产品的最大出口市场，众多的中国制造企业均应注意该法案可能对其生产经营活动所产生的实质性影响，避免由于在生产经营过程中使用假冒盗版IT产品导致向美国出口受阻并引发其他法律风险。
Continue Reading...By Susan Ning and Huang Jing
On 7 September 2011, the Shanxi Combined Transportation Group Company (SCTG) filed an administrative law suit with the Taiyuan Xinghualing District People's Court against the Taiyuan Bureau of Railways (the "SCTG Case"). On 15 September 2011, the Taiyuan Xinghualing District People's Court accepted the SCTG Case.
SCTG alleged that it had submitted two applications to the Taiyuan Bureau of Railways for establishing new railway ticket agent stores on 25 January 2011; but Taiyuan Bureau of Railways did not respond to such applications. According to SCTG, Taiyuan Bureau of Railways' conduct was a violation of the Anti-monopoly Law (AML), and constituted administrative omission. Thus SCTG filed the administrative lawsuit.
By Susan Ning, Liu Jia, Sun Yi Ming and Yin Ranran
In early November, Taobao Mall (Tmall), part of the e-commerce operations of Alibaba Group and considered as China's biggest business-to-consumer (B2C) retail platform, suffered from a stormy protest from small vendors against its new rules. Meanwhile, antitrust concerns arise in relation to its suspected abuse of dominance in the e-commerce industry.
This article provides an overview of the whole incident, outlines details to do with Tmall' s conduct and examines whether such conduct could be considered as an abuse of dominance in violation of the Anti-monopoly Law of China (AML).
Continue Reading...By Susan Ning and Huang Jing
On 21 September 2011, Mr. Shang Ming, Director General of MOFCOM's Anti-Monopoly Bureau revealed the yearly merger control statistics at the BRICS International Competition Conference 2011 held in Beijing.
According to Mr. Shang, the merger control statistics for 2008, 2009 and 2010 are as follows:
| Case numbers |
|||
| Year | Cleared without conditions | Cleared with conditions |
Rejected |
| 2008 | 16 | 1 | 0 |
| 2009 | 75 | 4 | 1 |
| 2010 | 116 | 1 | 0 |
By Susan Ning and Huang Jing
On 21 September 2011, Mr. Shang Ming, Director General of MOFCOM's Anti-Monopoly Bureau revealed the most recent legislative plan of MOFCOM' at the BRICS International Competition Conference 2011 held in Beijing.
According to Mr. Shang, MOFCOM will promulgate 3 new rules on merger control within this or next year. The 3 new rules are: Rules on Imposing Restrictive Conditions on Concentration of Operators (the "Rules on Remedies"), Rules on the Investigation and Handling of Violation of Notification Obligations for Concentration of Operators (the "Rules on Violation of Notification Obligations"), and Rules on the Investigation and Handling of the Concentration of Operators below the Notification Thresholds with Monopoly Suspicion (the "Rules on Mergers Below Thresholds").
Continue Reading...By Susan Ning, Sun Yiming and Liu Jia
Most recently, the hottest topic on China's Anti-monopoly Law (AML) is a piece of news spreading on the internet, indicating that China Telecom, one of China's largest state-owned enterprises is under antitrust investigation conducted by a "relevant" competition authority for its suspected abuse of dominance in broadband market. If the abuse is successfully established, China Telecom may face huge fines under the AML. The news is also quoted by Xinhuanet.com, an authoritative website run by the government. However there has been no formal response from China Telecom or any competition authorities so far in this respect.
This article outlines details to do with China Telecom's conduct and examines whether or to what extent such conduct would be considered as an abuse of dominance and thus in violation of the AML.
Susan Ning and Yin Ranran
On September 2, 2011, China's Ministry of Commerce ("MOFCOM") released on its website the Provisional Rules on Assessment of Competitive Effects of Concentration of Business Operators (MOFCOM 2011 Announcement No. 55, the "Rules"). With 14 articles, the Rules elaborated on the factors to be considered by MOFCOM in assessing the competitive effects of a business concentration, which have been listed in Article 27 of the Anti-monopoly Law ("AML")1 . The Rules are implemented as of today (September 5, 2011).
The Rules set out the basic methodology for its competitive analysis and the basic elements for application of each factor in a merger review process. The Rules appear to identify market share/market control power and market concentration levels as the most important factors to be considered by MOFCOM in assessment of competitive effects of a concentration.
By Susan Ning, Huang Jing and Yin Ranran
On 25 August 2011, the Ministry of Commerce (MOFCOM) released the MOFCOM Rules for Implementation of Relevant Issues regarding National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (NSR Rules). From 1 September 2011, the Rules replaces the MOFCOM Interim Rules for Implementation of Relevant Issues regarding National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (NSR Interim Rules) issued on 4 March 2011 (see our article entitled "MOFCOM issues national security review interim rules").
Compared with the Interim Rules, the key change we see in the NSR Rules is that MOFCOM clearly states that the authority will assess the applicability of the national security review (NSR) process from the substance and actual impact of a transaction; and that foreign investors shall not evade the NSR regime via alternative transaction structures, including but not limited to warehousing arrangements, trusts, multi-tier investments, leases, loans, contractual control, or offshore transactions, etc.
By Susan Ning and Yin Ranran
On 27 July 2011, the Ministry of Industry and Information Technology ("MIIT") issued for public comments draft rules entitled Provisions on Administration of Internet Information Services (Draft for Comments) ("Draft Rules").
The Draft Rules are based on an earlier draft entitled Interim Rules for Supervision and Management of Internet Information Service Market ("Interim Rules") released by MIIT on 12 January 2011.1 The Draft Rules mainly set out the code of conducts for an internet information service provider ("IISP") vis-à-vis its competitors and consumers.
By Susan Ning, Huang Jing and Yin Ranran
On January 26, 2010, three GPS operators filed a complaint to the Guangdong Administration for Industry and Commerce ("Guangdong AIC") claiming that the municipal government of Heyuan city, Guangdong province ("Heyuan Government") abused its administrative power in the course of promoting the global positioning system ("GPS") for automobiles and eliminated and restricted competition in this industry. After investigation, the Guangdong AIC officially proposed to the Guangdong Government asking for rectification of Heyuan Government's abusive conducts.
According to news reports, after receiving the complaint, the Guangdong AIC initiated investigations and identified the following facts:
Susan Ning, Ding Liang
On July 27, 2011, the National Development and Reform Commission (NDRC), the Ministry of Commerce (MOFCOM) and the State Administration for Industry and Commerce (SAIC) signed Anti-trust Memorandum of Understanding (MOU) with their US counterparts, the U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ).
The MOU provides for high-level consultations among all five agencies as well as separate communications between individual agencies. The MOU also lists several specific areas for cooperation, including:
Susan Ning, Ding Liang
According to officials of the National Development and Reform Commissions (NDRC), the Department of Price Supervision of NDRC was renamed as the Price Supervision and Anti-monopoly Bureau and the internal offices are under reconstruction[1].
The following is a diagram of the current State Council Anti-monopoly Enforcement Agencies's organizational structure:
Continue Reading...By Susan Ning and Yin Ranran
On June 30, the Ministry of Industry and Information Technology ("MIIT") issued the Opinion on Regulating Conducts of Basic Telecoms Enterprises on College Campuses ("MIIT Opinion"). The MIIT Opinion governs specified conduct by basic telecom enterprises1 -in relation to unfair competition issues within college or university campuses.
Continue Reading...
By Susan Ning, Liu Jia and Yin Ranran
The QQ / 360 battle broken out towards the end of 2010 (see our article entitled "The QQ / 360 Disputes - Who, What, Where, When and Preliminary Antitrust Analysis") has stirred lasting and heated discussions about anti-monopoly issues in the emerging Internet industry in China.
About one month ago, Renmin University of China organized the thirteenth Anti-Monopoly Law Summit Forum, which was focused on discussion of fair competition in the Internet industry of China and protection of netizens' interests. Officials from various government agencies, such as the Law Committee of the National People's Congress, Legislative Affairs of the State Council, the Ministry of Industry and Information Technology ("MIIT"), the State of Administration for Industry and Commerce ("SAIC'), the Ministry of Commerce, and the National Development and Reform Commission, as well as judges from the Supreme People's Court participated in the forum..
Continue Reading...Susan Ning and Yin Ranran
Recently, the Ministry of Commerce (MOFCOM) announced that its Anti-monopoly Bureau is to put up a signboard for the "Office of State Council's Anti-Monopoly Commission (AMC)". According to Mr. Yao Jian, a spokesman for MOFCOM, the State Council has approved the formal establishment of the AMC Office (even though the AMC Office has been operational within MOFCOM since the enactment of the Anti-Monopoly Law (AML) in 2008).
As the third anniversary of the AML draws near, Mr. Yao expects that this move will further enhance effective enforcement of the AML and the coordination among the various ministries under the AMC.
Continue Reading...By Susan Ning, Shan Lining and Angie Ng
Pursuant to the Anti-Monopoly Law, transactions which are construed as "concentrations" (i.e. mergers, acquisitions and joint ventures) and which meet with specified turnover thresholds 1; must be notified to, and cleared (from an antitrust law perspective) by MOFCOM, before business operators can go ahead with these transactions (notifiable concentrations).
By Susan Ning, Zheng Ziqing and Angie Ng
On 3 June 2011, the Ministry of Commerce (MOFCOM) published, for public comments, draft rules which explain how MOFCOM will evaluate concentrations pursuant to the merger control regime. These rules are entitled "Provisional Rules on the Assessment of the Effects of Concentrations on Competition" (Draft Rules). The public has been invited to submit comments on these Draft Rules by 13 June 2011.
In fact, Article 27 of the Anti-Monopoly Law (AML) outlines a list of factors that MOFCOM would take into account, when assessing concentrations. These are: (a) the market shares of the business operators involved in the concentration and their control over the market; (b) the degree of market concentration; (c) the impact of the concentration of business operators on market entry and technological advancement; (d) the impact of the concentration on consumers and other relevant business operators; (e) the impact of the concentration of business operators on the development of the national economy; and (f) any other factors deemed by MOFCOM to be relevant for consideration. The Draft Rules expand on these factors. There are altogether 14 provisions in the Draft Rules. The following table provides an illustration of how the Draft Rules "expand" on the factors set out in Article 27 of the AML.
Susan Ning and Yin Ranran
On 3 June 2011, Mr. Shang Ming, Director General of MOFCOM's Anti-Monopoly Bureau revealed the latest figures to do with merger control at the 7th International Symposium on Competition Law and Policy hosted by the Chinese Academy of Social Sciences.
By Susan Ning, Liu Jia and Angie Ng
The National Development and Reform Commission (NDRC) has co-organised a conference focusing on price related monopoly agreements with the European Commission Directorate-General for Competition (DG Competition). The conference took place from 1 to 2 June 2011.
Antitrust authorities from the following jurisdictions attended this conference: the European Union, the United States of America, Germany, Spain, Ireland, Australia, Greece. From China, officials from several government agencies attended the conference, including officials from: the Law Committee of the National People's Congress, the Supreme People's Court, Legislative Affairs of the State Council, the NDRC, the Ministry of Industry and Information Technology, the Ministry of Commerce, the State of Administration of Industry and Commerce, and pricing authorities based in Beijing, Tianjin and Shanghai. Other attendees include representatives from China Consumers' Association, China Cleaning Industry Association and academics.
Continue Reading...By Susan Ning, Chai Zhifeng and Angie Ng
On June 2, 2011, Ministry of Commerce (MOFCOM) publicly announced the first conditional merger clearance in 2011. At its [2011] No. 33 Announcement, MOFCOM cleared Uralkali's proposed acquisition of Silvinit (the Parties) (both potash producers based in Russia) with conditions. This is the 7th conditional merger clearance since the enactment of the Anti-monopoly Law (AML) in 2008. MOFCOM is obliged by statute to publish conditional clearances.
The following are the salient points to note vis-à-vis this conditional clearance:
Continue Reading...By: Susan Ning, Angie Ng and Shan Lining
Last week (between 26 to 27 May 2011), it was reported in the press that Unilever has raised the prices of specific products (including Lux and Hazeline branded shampoos and shower gels) by 10% in some cities including Beijing, Shanghai and Guangzhou (Unilever's price increases). This was touted as a surprising move given that Unilever was recently fined by the price authority, the National Development Reform Commission (NDRC) in relation to conduct to do with its proposed price increases just earlier in the month (see below for more details to do with this fine) (Unilever's price signaling conduct).
This article outlines details to do with Unilever's price signaling conduct and subsequent price increases and examines whether or to what extent such conduct would be considered in breach of the Price Law and the Anti-Monopoly Law in China.
Continue Reading...By: Susan Ning, Shan Lining and Angie Ng
On 6 May 2011, the National Development and Reform Commission (NDRC) announced that a manufacturer of household and personal care products (the Manufacturer) has been fined a total of RMB2 million for breaching the Price Law. The NDRC also appeared to have made some Anti-Monopoly Law (AML) references in relation to this case.
Continue Reading...By Susan Ning, Liu Jia and Angie Ng
On 25 April 2011, the Supreme People's Court (the Court) published draft rules which govern Anti-Monopoly Law (AML) private actions (Draft Rules)1. These Draft Rules are entitled "Provisions on Issues Concerning the Application of Law in relation to Trials of Monopoly Civil Dispute Cases". The Court will consult on these Draft Rules till 1 June 2011.
We note that these Draft Rules provide for applicants to file "joint" applications with others against respondents. This article outlines what the Draft Rules say about joint applications and outlines how this interacts with the joint application regime pursuant to China's Civil Procedure Law.
Continue Reading...
By Susan Ning, Shan Lining, Ji Kailun and Liu Jia
On 25 April 2011, the Supreme People's Court (the Court) published draft rules which govern Anti-Monopoly Law private actions (Draft Rules). These draft rules are entitled "Provisions on Issues Concerning the Application of Law in relation to Trials of Monopoly Civil Dispute Cases".
This article outlines the salent provisions of, and points to some interesting features of, these Draft Rules.
By Susan Ning, Yin Ranran
On 25 April 2011, the Supreme People's Court issued for public comments draft rules which govern civil action in relation to Anti-Monopoly Law (AML) disputes. These rules are entitled "Provisions on Issues Concerning the Application of Law in the Trial of Monopoly Civil Dispute Cases"("Draft Rules"). Prior to the release of these Draft Rules, there haven't been any detailed rules in relation to AML civil action. The court will consult on this Draft Rules till 1 June 2011.
The Draft Rules contain 20 articles covering jurisdiction, standing of plaintiffs, burden of proof, evidentiary rules, relationship of antitrust administrative investigations and the judicial process, form of civil liabilities and the statute of limitations. The objective of these Draft Rules is to ensure proper adjudication of civil monopoly disputes cases, prevent monopolistic conduct, protect fair competition in the market and safeguard the interests of consumers and public interest.
Continue Reading...By Susan Ning and Yin Ranran
On 2 April 2011, the National Development and Reform Commission (NDRC) hosted a conference with 17 industry associations (relating to businesses selling major consumer products such as household electrical appliances, food, beverages and dairy products) in Beijing. Specifically, the NDRC's Price Department and Economic and Trade Department convened the conference as an effort to address the recent price hikes in commodities (see our articles entitledPrice Hikes for Washing Powders, Soaps and Shampoos Expected in April and Businesses Should Be Cautious in Making Advance Price Increase Announcement ).
The NDRC hosted conference was also regarded as an effort of NDRC to address China's increasing consumer price index (CPI) – which is a major indication of the rate of increase of inflation in China. According to data released by the National Bureau of Statistics on April 15, China's CPI rose 5.4% in March 2011 (from a year ago), hitting a 32-month high.
By Susan Ning, Liu Jia and Angie Ng
It's been slightly over a month since the enactment of a national security review (NSR) process for foreign acquisitions of domestic businesses. Thus far, it is not clear how many (if any at all) foreign-local deals have undergone the NSR process, Pursuant to the rules and regulations1 which govern the NSR process, there is no obligation on the part of the Chinese government to publish any determinations (whether deals are approved or not) in relation to deals which undergo the NSR process.
Continue Reading...By Susan Ning, Huang Jing and Angie Ng
We understand from press reports that the China Automobile Dealers Association (CADA) has complained that a large automobile manufacturer has allegedly been imposing unreasonable restraints on its distributors, including determining a minimum resale price and allocating territory. There has been some suggestion in the press that the conduct allegedly undertaken by the automobile manufacturer is in breach of the Anti-Monopoly Law (AML).
This article identifies the AML provision governing such vertical restraints; and also outlines how certain vertical restraints in relation to the motor industry are being dealt with in Europe.
Continue Reading...By Susan Ning, Yin Ranran and Angie Ng
An instant noodle manufacturer recently announced that it decided to increase prices for its "container instant noodle" (referring to both instant noodles packaged into a variety of "cup-like" or rectangular containers) from 1 April 2011. In China, this instant noodle manufacturer is considered one of the leading brands in relation to the instant noodle industry. According to press reports, the instant noodle manufacturer has announced that due to increased transportation and raw materials (e.g. flour and palm oil) costs, it intends to raise the prices for most of its container instant noodles to RMB 0.5 per unit – this amounts to an increase of between 10% to 15% from current prices. [Note: In the past month, several manufacturers of household and daily care products also made announcements that they were intending to increase prices of specified products due to an increase in price in raw materials. See our article entitled Price Hikes for Washing Powders, Soaps and Shampoos expected in April
Continue Reading...By Susan Ning, Yin Ranran, and Angie Ng
Recently, there has been a flurry of press reports on the proposed price increases by several major manufacturers of household and personal care products, including multinationals such as Procter & Gamble and Unilever, as well as domestic manufacturers such as "Liby" and "Nice". Pursuant to the press reports, all four manufacturers mentioned above have separately announced that the retail prices for their respective brands of washing agents (including washing powders, soaps and shampoos) will increase by as much as 10% commencing from early April 2011. Commentators have said that this is the largest price hike that they have seen in relation to the household and personal care products industry, in the past 3 years.
Continue Reading...By Susan Ning, Shan Lining and Angie Ng
The radiation leaks in Japan's Fukushima Daiichi nuclear plant (caused by the earthquake-tsunami in Japan on 11 March) has made consumers in China paranoid about the salt they will consume in the near future. Once news of the leak in the nuclear plant broke, there was a mad "scramble" to purchase table salt – as Chinese consumers were concerned that in the near future, the sea water around China would be contaminated as a result of the radiation leakage. According to press reports, around the same time, some table salt retailers proceeded to raise the retail prices of iodized table salt.
The Chinese Government controls prices in relation to table salt. Specifically, the ex-works and wholesale prices of table salt are set by the National Development and Reform Commission (NDRC, the central price authority); in addition provincial price authorities also control to some extent, the retail prices of salt. In some provinces, provincial price authorities set maximum retail prices – this means that table salt retailers are not to charge above a price set by these authorities.
Continue Reading...By Susan Ning, Huang Jing and Shan Lining
On March 4 2011, just one day before the implementation of the national security review mechanism1, the Ministry of Commerce (MOFCOM) released the MOFCOM Interim Rules for Implementation (Interim Rules). These Interim Rules came into effect on 5 March and are set to expire on 31 August 2011.
The Interim Rules provide more details in relation to how the national security review process is initiated, documents to be submitted and more details the initiation of a national security review, the required documents, and the review decisions.
By Susan Ning, Yin Ranran, Huang Jing
There have been concerns about Chinese government's foreign investment policy ever since the State Council announced the formal establishment of the national security review ("NSR") regime in China. At a press conference of the Fourth Session of the 11th National People's Congress held on March 7, 2011, China's Minister of Commerce Chen Deming reiterated that China's "opening-up" policy will remain unchanged. According to Chen, whereas China is in the process of further opening up to the world, introducing the NSR regime ensures that national security concerns will be addressed in a transparent manner and it is in line with international practice.
The NSR regime is not particular to China. The United States first instituted the NSR process in the 1980s. Other jurisdictions, such as Australia, Germany, Canada, also have similar processes (see our article entitled More on China's national security review regime - the American regime vs the Chinese regime). Through our research, we find that during the past few years, the following contemplated outbound investments by Chinese companies underwent the NSR process:
Continue Reading...By Susan Ning, Liu Jia and Angie Ng
In March every year, lawmakers and political advisers from the National People's Congress (NPC) (Chinas equivalent of Parliament) and the Chinese People's Political Consultative Committee (CPPCC) (China's top advisory body) conduct sessions in Beijing to take stock of social, legal and economic issues in China for the preceding year; and discuss objectives (in relation to the same issues) for the year going forward1. These sessions are often referred to as the "two sessions".
Two statements which have arisen during these two sessions; are of particular interest (from an antitrust law perspective):
By Susan Ning, Angie Ng and Shan Lining
On 3 February 2011, China's State Council released a notice which governs a national security review process for foreign acquisitions of domestic companies1. This national security review process will be implemented on 5 March 2011.
Since the release of the notice, there has been a flurry of articles and commentaries in both the legal and business media circuit. Foreign businesses who wish to invest in China are concerned that this is potentially another tedious clearance process (on top of the corporate, regulatory and antitrust clearance processes) to pass before they are free to close their proposed transactions.
Continue Reading...By Susan Ning, Shan Lining and Angie Ng
On 5 March 2011, China will implement its first National Security Review (NSR) regime. This NSR regime will govern foreign acquisitions of domestic companies. The precise boundaries of this NSR regime has been set out in a notice (specifically, a Notice on Establishing National Security Review by Foreign Investors issued by the State Council1. ).
We know, from the notice mentioned above that, broadly, a foreign-local transaction may only be caught if: (a) the foreign company acquires de facto control over a local company; and (b) the local company is involved in selling goods or services in relation to either national defense security or national economic security. [Note that if a foreign company acquires a local company involved in selling goods or services in relation to national defense security, the threshold set out in (a) (i.e. de facto control) does not need to be established. In other words, the transaction will come under the purview of the notice, despite there being no de facto control.]
This article outlines the above mentioned two thresholds (i.e. de facto control) and what is meant by national defense and national economic security in more detail.
By: Susan Ning, Liu Jia and Yin Ranran
Recently, the Jiangsu Administration for Industry & Commerce ("Jiangsu AIC") issued sanctions against the Concrete Committee of the Construction Materials and Construction Machinery Industry Association of Lianyungang City ("Association") and 16 concrete manufacturers for breach of the Anti-Monopoly Law, by way of having entered into a monopoly agreement.
This is the first publicly released enforcement decision by the SAIC (which delegated power onto the AIC) in respect of the Anti-Monopoly Law (AML), since the enactment of the AML in August 20081.
The State Administration for Industry & Commerce ("SAIC") possesses the jurisdiction to govern and enforce non-price prohibitions in respect of the AML. And, according to the Article 10 of the AML and the Article 2 of the Procedural Rules by Administration of Industry and Commerce regarding Investigation and Handling of Cases relating to Monopoly Agreement and Abuse of Dominant Market Position, where necessary, SAIC may delegate to relevant AIC of a province, an autonomous region, or a municipality ("Provincial AIC") the authority of anti-monopoly law enforcement with regard to monopoly agreement and abuse of dominant market position.
By Susan Ning, Liu Jia and Angie Ng
We understand from media reports that on 18 February 2011, Hudong1 (a Chinese internet search engine) made an Anti-Monopoly Law (AML) complaint to the State Administration for Industry and Commerce (SAIC) against Baidu2 (arguably the most often or commonly used internet search engine in China; often referred to as China's equivalent of "Google").
Continue Reading...By Susan Ning, Shan Lining, Yin Ranran and Angie Ng
On February 3, 2011, the State Council released the Notice on Establishing National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ("Notice"). According to the Notice, China will implement a national security review process in relation to foreign funded mergers and acquisitions ("M&A") of domestic enterprises 30 days after the issuance of the Notice. A ministerial joint committee ("Joint Committee") led by the National Development and Reform Commission ("NDRC") and the Ministry of Commerce ("MOFCOM") will be set up to administer and enforce the national security review process.
Continue Reading...By Susan Ning, Chai Zhifeng and Yin Ranran
In November 2009, the Ministry of Commerce of China ("MOFCOM") issued the decision to clear the Panasonic/Sanyo deal with conditions, one of which is for Panasonic to divest its nickel-hydride car batteries business in Japan. On February 9, 2011, the sale was sealed with Panasonic selling this business to Hunan Corun New Energy Co., Ltd. for about RMB 40 million.
Continue Reading...By Susan Ning and Huang Jing
Partly driven by the QQ-360 disputes (see our article entitled " The QQ / 360 Disputes - Who, What, Where, When and Preliminary Antitrust Analysis"), the Ministry of Industry and Information Technology (MIIT) released the Interim Rules for Supervision and Management of Internet Information Service Market (Draft for Comment) (Draft Rules), on 12 January 2011.
The objective of the Draft Rules is to safeguard the competitive environment in relation to the internet information service industry, and to safeguard consumers' interests. Broadly, the Draft Rules sets out the code of conduct for internet information service providers (IISP), and dispute resolution mechanisms.
Continue Reading...By Susan Ning and Liu Jia
Two and half years after the enactment of the Anti-Monopoly Law (AML), the anti-trust authorities in China (i.e. the National Development and Reform Commission (NDRC) and the State Administration for Industry and Commerce (SAIC)) issued detailed rules prohibiting abuse of dominance within their respective remit.
By Susan Ning and Ding Liang
Since the enactment of the Anti-Monopoly Law (AML), the antitrust enforcement authorities in China (i.e. the National Development and Reform Commission (NDRC)) and the State Administration for Industry and Commerce (SAIC)) have issued procedural rules, detailing how they will go about an investigation and adjudication of an alleged breach of the Anti-Monopoly Law (AML).
By Susan Ning and Liu Jia
As the Spring Festival approaches, the National Development and Reform Commission ("NDRC") has ordered local price authorities to step up enforcement efforts against price fraud conducts by retail stores, upon widespread consumer complaints. On 26 January 2011, NDRC issued an announcement titled "Retail stores such as Carrefour are suspected of price fraud, local price authorities will hand out grave penalities" , condemning price fraud conducts by retail stores, based on investigations by local price authorities.
By Susan Ning and Shan Lining
In January 2011, the National Development and Reform Commission (NDRC) and the State Administration of Industry and Commerce (SAIC) released the Rules on Anti-Price Monopoly (the NDRC Anti-price Monopoly Rules) (see our article entitled "Rules on Anti-Price Monopoly – effective 1 February 2011") and the Rules in relation to Conduct amounting to Monopoly Agreements (the SAIC Monopoly Agreement Rules) (see our article entitled "3 rules which shed light on non-price violations of the Anti-Monopoly Law – effective 1 February 2011") respectively on the 4th and 7th day of the month.
By: Susan Ning, Shan Lining, Liu Jia and Angie Ng
On 7 January 2011, the State Administration of Industry and Commerce (SAIC) published the following 3 rules which accompany the Anti-Monopoly Law (AML):
(a) Rules in relation to Conduct amounting to Monopoly Agreements (Monopoly Agreement Rules);
(b) Rules in relation to Conduct amounting to Abuse of Dominance (Abuse of Dominance Rules); and
(c) Rules in relation to Conduct amounting to Abuse of Administrative Powers (Abuse of Administrative Powers Rules).
By Susan Ning, Chai Zhifeng and Angie Ng
On 4 January 2011, the National Development and Reform Commission (NDRC) fined the Zhejiang Fuyang Paper Making Industry Association (the Association) for facilitating its members in relation to engaging in monopoly acts, in breach of both the Anti-Monopoly Law (AML) and the Price Law (PL)1.
This is the first enforcement action (in respect of price-related breaches of the Anti-Monopoly Law) by the NDRC in 2011.
Continue Reading...By Susan Ning, Zheng Ziqing and Angie Ng
At the brink of the New Year, it is timely to take stock of the antitrust merger control work we've undertaken for our clients and provide some observations re the merger control regime in China:
Continue Reading...By Susan Ning and Ding Liang
On 29 December 2010, the National Development and Reform Commission (NDRC) issued rules entitled Procedural Rules on Administrative Enforcement of Anti-price Monopoly (procedural rules). These procedural rules provide further guidance as to how Chapter 6 of the Anti-Monopoly Law (AML), entitled "Investigation of Alleged Monopoly Acts" operate. Chapter 6 of the AML outlines the investigation powers of the antimonopoly authorities.
This is the first time that the NDRC has issued any procedural rules in respect of the AML.
Continue Reading...By Susan Ning, Ding Liang, Shan Lining and Angie Ng
On 29 December 2010, the National Development and Reform Commission (NDRC) issued rules entitled "Rules on Anti-Price Monopoly"(rules). These are the first rules to provide further guidance in relation to the price-related prohibitions of the Anti-Monopoly Law (AML). [Note: The NDRC issued these rules in draft form for the first time in September 2009.] The rules will be effective as of 1 February 2011.
Broadly, the rules expand on and provide further guidance to the prohibitions against anticompetitive agreements and against an abuse of dominance within the AML.
By Susan Ning, Huang Jing and Angie Ng
We often receive queries from clients in relation to whether group restructures need to be notified to the Ministry of Commerce (MOFCOM) for antitrust merger control clearance.
This article provides some general guidance as to when a group restructure needs to be notified to MOFCOM for antitrust merger control clearance.
Continue Reading...By: Susan Ning and Ding Liang
On 22 December 2010, the Minister of Commerce Chen Deming stated in his annual working report at the 2010 National Commerce Work Conference that the Ministry of Commerce (MOFCOM) intends to combine the following processes: (a) administration of foreign investment; (b) anti-monopoly merger control review; and (c) national security review from next year.
According to Minister Chen's report, the main objective in combining the above mentioned processes is to "protect the security of domestic industries".
It is not clear how the processes in (a) to (c) as mentioned above will be combined or integrated. This article provides a brief overview of how the processes set out above are currently being conducted.
Continue Reading...By: Susan Ning and Shan Lining
On 20 December 2010, the Beijing Second Intermediary People's Court (the Court) issued a first instance ruling on an Anti-Unfair Competition Law dispute between Baidu (the largest Chinese search engine provider) and 360 (a large security software provider). The Court ruled in favor of Baidu, ordering 360 to pay damages amounting to RMB385,000.
At the time of writing, we were unable to obtain a copy of the first instance judgment – thus, this article sets out the facts of the case, based on public or press reports:1
Continue Reading...By: Susan Ning, Zheng Ziqing and Angie Ng
On 18 December 2010, Mr Shang Ming (Chief of the Antimonopoly Bureau, of the Ministry of Commerce or MOFCOM) delivered a speech at an academic conference entitled "International Symposium on Enforcement of China's Anti-Monopoly Law in the New Economy" held at Beijing's People's University.
During Mr Shang's speech, he revealed the following facts and figures about MOFCOM's merger control regime:
Continue Reading...By: Susan Ning, Shan Lining and Angie Ng
On 17 November 2010, the National Development and Reform Commission (NDRC) organized a "price monopoly" workshop in Chengdu to take stock of: (a) developments in relation to price related breaches of the Anti-Monopoly Law (AML); and (b) developments in relation to provincial level price authorities and their enforcement of the AML (see our article entitled "Provincial Price Authorities and the AML" dated 20 November 2010.[1]
Continue Reading...By: Kenneth Y. Choy of King & Wood's Hong Kong office and Antitrust & Competition Group
Tai Po is a traditional village located in the northeastern part of the New Territories in Hong Kong. Its historical relics, old temples, quaint fishing village and natural scenery make it a popular destination for both tourists and local residents alike.
The Hong Kong government began building up Tai Po in the late 1970’s, transforming it from a sleepy fishing community into a bustling new town of 300,000. In the last decade, the Government decided to tear down the old to make way for new facilities in the area. As part of the development, the old Tai Po Temporary Market which had housed many small cooked food stalls was replaced with a brand new complex. Stallholders who operated the cooked food stalls were vacated by the Food and Environmental Hygiene Department, the governmental agency that manages cooked food markets and relocate to the new facility.
Continue Reading...By: Susan Ning, Shan Lining, Liu Jia and Angie Ng
On 10 December 2010, the State Council published and enacted a set of revised penalty regulations[1] (vis-à-vis the Price Law 1997).
Broadly, the penalties set out in these revised penalty regulations are more severe than the previous version.
Of note is the fact that there is a new Article 5 which outlines more severe and specific remedies in relation to breaches amounting to price-fixing. In addition, the new Article 19 introduces criminal sanctions for breaches of the Price Law 1997 which severely disrupt the market order in China.
Continue Reading...By: Susan Ning, Zheng Ziqing and Angie Ng.
On 15 November 2010, the National Development and Reform Commission (NDRC) issued a notice entitled “Hubei Province Price Bureau to investigate and punish tying case”.[1]
Continue Reading...By: Susan Ning, Ding Liang and Huang Jing
On 22 November 2010, the National Development and Reform Commission (NDRC) announced1 that it was in the process of determining remedies against eight oil companies for selling diesel above the maximum prices set by the Government.
The eight companies are: (a) Shaanxi Petroleum Chemistry Industry Trade Company; (b) Shaanxi Yanchang New Resources Co., Ltd; (c) Shanxi Yanlian Petroleum Chemistry Co., Ltd Xi’an Supply Store; (d) Shandong Jincheng Petroleum Chemistry Group Company; (e) Jiangsu Province Lianyungang PetroChina Sales Co., Ltd; (f) Sinopec Wuhan branch company; (g) Sinopec Luoyang branch company; (h) PetroChina Wuhan branch Company. [Note: The companies listed in (e) to (h) are State Owned Enterprises (SOEs).]
Continue Reading...By: Susan Ning, Shan Lining and Angie Ng.
On 17 November 2010, the NDRC organized a “price monopoly” workshop in Chengdu.[1] Government officials from some 15 provincial level price authorities attended this workshop.
Continue Reading...By: Susan Ning, Shan Lining and Angie Ng.
On 12 November 2010, Professor Huang Yong (University of International Business and Economics) gave some comments to the media1 on the QQ-360 disputes (see our previous article entitled “The QQ/360 disputes”).
Professor Huang made the point that industries like the technology and internet services industries develop and change so quickly that by the time either party (i.e. QQ or 360) or a third party brings a claim (pursuant to the Anti Unfair Competition Law (AUCL)) to the courts and receives remedies (e.g. damages), the industry might have changed so much that either one or both of these parties might have been “driven” out of the industry. By contrast, in his comments, Professor Huang spoke about “public enforcement” being a more “efficient” route of enforcing the AUCL.
Continue Reading...By: Susan Ning, Ding Liang and Angie Ng.
Recently, the disputes between Tencent’s QQ and Qihoo’s 360 software have caused quite a stir in the press (see our article entitled “QQ vs 360 – an anti unfair competition case”.
We set out the “whos”, “whats”, “where” and “when” or the background to these disputes. We also provide our preliminary views or analysis re these disputes vis-à-vis the Anti Unfair Competition Law (AUCL) and the Anti-Monopoly Law (AML).
Continue Reading...By: Susan Ning and Shan Lining.
On 30 October 2010, it was reported in the press1 that the People’s Court has thus far accepted 11 antitrust cases (for the period 1 August 2008 to June 2010). Out of these 11 cases, 10 were antitrust civil cases (see our previous article entitled Two Years on, Ten Antitrust Private Actions) and 1 was an antitrust administrative action.
Continue Reading...By: Susan Ning and Liu Jia.
On 3 November 2010, it was reported in the press1 that the Changsha Yuelu District People’s Court (in Hunan province) accepted the court’s first private antitrust claim. The antitrust claim was formally accepted by the court 1 November 2010 and is an abuse of dominance case.
Continue Reading...By Susan Ning, Ding Liang and Angie Ng, King & Wood's Competition Practice.
In late August 2010, it was reported in the press that at least 10 antitrust private actions have been heard in the courts in China (see Two years on, ten private antitrust action
This article describes one of the cases, Zhou Ze v. China Mobile Beijing (the Zhou Ze case), in detail. This was an alleged abuse of dominance case – which was later settled.
Continue Reading...By Susan Ning, Shan Lining and Angie Ng, King & Wood's Competition Practice.
On 26 October, a couple of Chinese airlines, including Air China, China Eastern Airlines, Shandong Airlines, Xiamen Airlines, Hainan Airlines, Capital Airlines and Shenzhen Airlines announced, separately, that they were going to raise passenger fuel surcharges for domestic flights.(1)
Continue Reading...
By Susan Ning, Huang Jing and Angie Ng, King & Wood's Competition Group
On 14 October 2010, the PRC National Copyright Administration (NCAC) published two pieces of regulations (the regulations) which govern the collection of copyright royalties for movies provided on the Internet, on flights and on public transport.(1) Recently there have been concerns from internet cafes that these royalties are unreasonably high.(2) There has also been some discussion in the press that these alleged “high” royalties could constitute an abuse of intellectual property rights, in breach of Article 55 of the Anti-Monopoly Law (AML).(3)
Continue Reading...By Susan Ning and Shan Lining, King & Wood's Competition Group
On 14 October 2010, Tencent Technology (Shenzhen) Co., Ltd (Tencent) launched an action against Beijing Qihoo Technology Co., Ltd (Qihoo) alleging that the latter has breached Article 14 of the Anti-Unfair Competition Law(1). Article 14 of the Anti-Unfair Competition Law prohibits entities from fabricating or spreading false facts, resulting in damaging the business reputation of a competing entity
Continue Reading...By Susan Ning, Huang Jing and Angie Ng, King & Wood's Competition Practice
We understand that the SAIC is currently working on draft guidelines (the guidelines) which will shed light on how Article 55 of the Anti-Monopoly Law (AML) will be enforced. It has been reported in the press that the SAIC has published a 4th draft of these guidelines and are currently consulting with the relevant stakeholders (we understand that these drafts are not publicly available).
Continue Reading...By Susan Ning and Ding Liang, King & Wood's Competition Group
In September 2010, Wuxi Baocheng Vehicle Cylinder Inspection Co. Ltd (WB) filed a civil suit to against Wuxi China Resources Gas Co., Ltd (WCR), alleging that the latter abused its dominance, in breach of the Anti-Monopoly Law (AML) (the “WB-WCR case”). WB is engaged in the business of inspecting and installing compressed natural gas vehicle cylinders. WCR owns and operates natural gas filling stations. WB alleged that WCR abused its dominance by refusing to fill natural gas for a vehicle that was installed with a natural gas cylinder installed by WB, in breach of Article 17(3) of the AML. (1)
Continue Reading...
By Susan Ning and Ding Liang, King & Wood's Competition Group
In late August 2010, it was reported in the press that at least 10 antitrust private actions have been heard in the courts in China (see Two years on, ten private antitrust actions). This article describes one of the cases – Huzhou Yiting Termite Prevention Service Co., Ltd vs. Huzhou Termite Prevention Research Institute (an alleged abuse of dominance case) – in detail.
Continue Reading...宁宣凤、丁亮、Angie Ng ， 金杜反垄断及反不正当竞争组
据相关媒体报道，截止到2010年8月下旬，国内法院共受理了至少10件反垄断民事诉讼案件（参见“近两年内的十件反垄断案件”）。
本文将就北京书生公司诉上海盛大、上海玄霆公司滥用市场支配地位一案的判决进行详细解读。
Continue Reading...By Susan Ning, Ding Liang and Angie Ng, King & Wood's Competition Practice
In late August 2010, it was reported in the press that at least 10 antitrust private actions have been heard in the courts in China (see Two years on, ten private antitrust actions).
This article describes one of the cases – Sursen v Shanda and Xuanting (an alleged abuse of dominance case) – in detail.
Continue Reading...宁宣凤、Angie Ng、郑孜青，金杜反垄断与反不正当竞争组
由于中国是世界制造中心，在这里企业之间的纵向服务合同或协议（如生产商与经销商之间）非常普遍，因此，中国反垄断法中有关规范纵向限制（如限制转售价格行为）的法律规定显得尤为重要。
Continue Reading...By Susan Ning, Angie Ng and Zheng Ziqing, King & Wood's Competition Practice
Antitrust or competition law rules governing vertical restraints (such as resale price maintenance) are significant in China because as a manufacturing “hub”, vertical contracts or agreements such as manufacturer-distributor agreements are very common.
This article outlines the rules governing resale price maintenance (RPM), pursuant to the Anti-Monopoly Law (AML); and compares these rules to the rules governing RPM pursuant to the European competition law.
Continue Reading...宁宣凤、丁亮、 Angie Ng，金杜反垄断及反不正当竞争组
据有关媒体报道，截止到2010年8月下旬，人民法院共受理了至少10件反垄断诉讼案件（详见“近两年内的10件反垄断诉讼案件”）。本文将就其中之一，也是中国法院受理的第一起反垄断诉讼案即“李方平诉中国网通”案作简要分析。（此案于2008年8月1日反垄断法实施当天立案。）
本案中原告诉被告滥用市场支配地位，2009年12月18日，北京市第一中级人民法院做出一审判决， 2010年6月9日，北京市高级人民法院维持了一审判决。
Continue Reading...By Susan Ning, Ding Liang and Angie Ng, King & Wood's Competition Practice
In late August 2010, it was reported in the press that at least 10 antitrust private actions have been heard in the courts in China (see Two years on, ten private antitrust actions).This article describes one of the cases - Li Fangping vs China Netcom – in detail. This was th
Continue Reading...宁宣凤、姜丽勇、郑孜青和Angie Ng 反垄断及反不正当竞争小组
Ⅰ简介：
在中国，由以下两个部门负责合并控制：
a商务部反垄断局：负责受理和审查经营者集中申报的具体执法工作。
b反垄断委员会（国务院的下属部门）：负责相关并购规定和指引的制定和发布。该委员会实际上是一个议事协调机构，指导和协调商务部、国家发展和改革委员会和国家工商管理总局三个执法机构的工作。
Continue Reading...Susan Ning, Jiang Liyong, Zheng Ziqing, and Angie Ng, Antitrust & Competition.
I INTRODUCTION
The following two authorities deal with mergers:
a the Anti-Monopoly Bureau within the Chinese Ministry of Commerce (‘Mofcom’) is the authority responsible for reviewing and clearing merger filings; and
b the Anti-Monopoly Commission (a division of the State Council) is the authority responsible for formulating and issuing merger guidelines (it is also the coordinating government agency between Mofcom and the two other antitrust enforcement agencies, the National Development and Reform Commission (NDRC) and the State Administration for Industry and Commerce (SAIC)).
By Susan Ning, Liu Jia, Huang Jing and Angie Ng, King & Wood's Competition Group
BHP Billiton (BHP)(1), a global natural resources company, has recently launched a hostile bid (the bid) to purchase PotashCorp (Potash)(2), a leading potash producer based in Canada.
This proposed acquisition is likely to have an impact in the Chinese potash industry.
By Susan Ning, Ding Liang and Shan Lining, King & Wood's Competition Group
At the end of last month, it was reported in the press (for example see an article dated 29 August published in the Legal Daily, that since the enactment of the Anti-Monopoly Law (AML) in 2008, at least ten antitrust private actions have been heard in the courts.
Continue Reading...By Susan Ning, Jiang Liyong and Angie Ng, King & Wood's Competition Practice
On 5 July 2010, the Ministry of Commerce (MOFCOM) enacted regulations which set out the rules and procedures to do with divesting assets. These regulations are entitled “Interim Regulations on Implementing the Divestiture of Assets or Businesses in Concentration of Business Operators” (divestiture regulations). A copy of the divestiture regulations are located here.
By Susan Ning, Ding Liang and Jiang Liyong, King & Wood's Competition Practice
In mid-August, it was reported in the press(1) that the National Development and Reform Commission (NDRC) had received complaints that the commercial banks in China have engaged in price-fixing conduct. Pursuant to the Anti-Monopoly Law, conduct amounting to price-fixing is prohibited.
Continue Reading...By Susan Ning, Shan Lining and Liu Jia, King & Wood's Competition Practice
On 13 August 2010, the proposed acquisition of Alcon, Inc (Alcon) by Novartis AG (Novartis) was approved by the Ministry of Commerce (MOFCOM), with conditions. MOFCOM’s public announcement in relation to this acquisition is located here. This is the 6th merger that has been approved with conditions, since the enactment of the Anti-Monopoly Law (AML) in 2008.(1)
Continue Reading...By Susan Ning, Shan Lining and Angie Ng, King & Wood's Competition Practice
On 12 August 2010, the PRC Ministry of Commerce (MOFCOM) hosted a “stocktake” briefing to mark the second anniversary of the Anti-Monopoly Law (AML).(1) Director-General of the Anti-Monopoly Bureau Shang Ming chaired the briefing. MOFCOM’s transcript of this briefing is located here. The following were the salient points raised during the briefing.
By Susan Ning, Ronald Arculli, Peter Waters, and Angie Ng of King & Wood and Gilbert + Tobin (1)
Hong Kong's Competition Bill (the Bill) was gazetted on 2 July 2010.(2) Formal public consultations on a cross-sector competition law for Hong Kong commenced in 2006. The Bill will be tabled in Hong Kong's Legislative Council (LegCo) on 14 July 2010. When the Bill becomes law, it will be known as the Competition Ordinance (CO).
Continue Reading...The Hong Kong Government has decided to introduce a cross-sector competition law during the 2008-09 legislative session. The Government has published a draft framework for the competition law and is currently seeking public comments on this draft.
The introduction of a competition law is a significant step for an economy to take. Not all competition laws are the same and the most important thing is that the law is designed well to suit the Hong Kong economy.
I. Key features of the draft framework paper
A. Competition rules
There are three core prohibitions commonly found in competition laws around the world. These are a prohibition against horizontal coordinated conduct such as price fixing between competitors; a prohibition on an abuse of unilateral market power (sometimes called an abuse of dominance or otherwise called an abuse of a substantial degree of market power); and a prohibition against anticompetitive mergers.
The competition law would contain two broad prohibitions:
• prohibition against undertakings (individuals, companies or other entities engaged in economic activities) entering into agreements, decisions or concerted practices with the purpose or effect of substantially lessening competition (the "First Conduct Rule"); and
• prohibition against undertakings that possess a substantial degree of market power from abusing that power with the purpose or effect of substantially lessening competition (the "Second Conduct Rule").
The Public Consultation Paper also raises the possibility of a prohibition against mergers or acquisitions that are likely to substantially lessen competition (the "Merger Rule") and a clearance process for mergers and acquisitions. If this possibility was not adopted, it would put the Hong Kong competition law out of step with most other competition law regimes around the world.
Also prohibited in some jurisdictions and not in others is certain vertical conduct like resale price maintenance. For example, the competition law on the Mainland contains such a provision. However, in step with recent US case law, Singapore does not prohibit such vertical conduct. The proposed Hong Kong law would follow the latter course.
*Nick Taylor is a partner of Gilbert+Tobin, a strategic partner of King & Wood since November 2007.
**Kenneth Choy is a Partner King & Wood - Hong Kong.
At first glance, the goals of intellectual property law and competition law might appear to conflict. IPR owners are granted statutory rights to control access and charge monopoly rents to others for use of their rights. IPR owners may also use terms of IPR licences to regulate downstream activities of their distributors, such as imposing exclusivity, territorial restraints and price restraints. Competition law, on the other hand, is directed at curtailing such market power which may prove harmful to economic welfare.
However, IP laws and competition laws can also be seen as complementary rather than antagonistic. Both laws share the same fundamental goals of enhancing consumer welfare and promoting innovation. According to the United States (US) Department of Justice (DoJ) and the Federal Trade Commission (FTC) :
“…[competition] laws protect robust competition in the marketplace, while intellectual property laws protect the ability to earn a return on the investments necessary to innovate. Both spur competition among rivals to be the first to enter the marketplace with a desirable technology, product, or service.”
While an IPR may confer a “legal monopoly” over a product, process or work, it does not necessarily confer an “economic monopoly”. Further, while an IP license may well confer restraints on licensees (such as territorial restraints) with respect to a specific product, process or work, there may be sufficient actual or potential close substitutes that constrain the exercise of market power by the IPR owner.
Despite the view that the goals of IP and competition laws are complementary, difficult questions can arise when competition law is applied to specific activities involving IPRs.
A. China's AML: Article 55
The IPR provision in the AML is set out in Article 55:
“This law shall not apply to the conduct of operators to exercise their intellectual property rights in accordance with the laws and relevant administrative regulations on intellectual property rights; however, this law shall apply to the conduct of operators to eliminate or restrict market competition by abusing their intellectual property rights.”
Article 55 exempts conduct which amounts to an exercise of IPRs so long as: those IPRs are exercised in accordance with the provisions of laws and administrative regulations relating to IPRs; and the conduct does not amount to an abuse of IPRs by eliminating or restricting competition.
The Article 55 approach is very similar to the approaches in Australia and Canada. In both these countries, there has been debate about when the IPR owner is only fairly exercising their inherent rights in the IPR or is trying to achieve something more which has an anti-competitive outcome. Experiences in both countries show that this dividing line can be difficult to draw.
* Angie Ng is a graduate in the Competition and Regulatory Group at Gilbert + Tobin in Sydney, Australia.
** Ding Liang is of counsel for King & Wood's International Trade Practice in Beijing.
*** Peter Waters is a partner in the Competition and Regulatory Group at Gilbert + Tobin in Sydney, Australia.
King & Wood established a strategic alliance with Gilbert + Tobin in November 2007.
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