By Susan Ning,Liu Jia and Hazel Yin

On 3 May 2012,China’s Supreme People’s Court issued the Rules of the Supreme People’s Court on Several Issues Concerning the Application of Law in Hearing Civil Cases Caused by Monopolistic Conduct ("Rules").The Rules contain 16 articles covering standing of plaintiffs,jurisdiction,burden of proof,evidentiary rules,expert witness,the judicial process, form of civil liabilities and the statute of limitations.The Rules entered into force on 1 June 2012.

Compared to the draft Rules released last year for public comments ("Draft Rules")1,the Rules contain fewer articles and remain silent on a few issues that were previously addressed in the Draft Rules.This article discusses the major provisions in the Rules.

  • Relationship of antitrust administrative investigations and the judicial process 

Since the AML does not mandate ex ante administrative proceedings,the Rules recognize that a plaintiff can either directly bring a civil action before the court,or bring a civil action after the decision of the AML enforcement agencies2 is confirmed effective.

However,the Rules choose to stay silent on whether administrative decisions may be used as proof of the facts confirmed therein in a follow-on litigation.Under the Draft Rules,the parties do not have to bear the burden to prove facts that have been ascertained by the AML enforcement agencies in their valid decisions.It is unclear whether this retreat is intended to uphold the independence of courts in the fact-finding process.In practice,the role an administrative decision can play in a follow-on litigation remains to be tested.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

  • Jurisdiction

The Rules provide that civil monopoly cases of the first instance shall be heard by intermediate courts(i)in capital cities of the provinces and autonomous regions,(ii)in cities separately listed on the State plan,(iii)in municipalities directly under the State Council,or(iv)by intermediate courts specifically designated by the Supreme Court.

In addition,the Rules also clarify that primary courts may also have jurisdiction over civil monopoly cases of the first instance,if approved by the Supreme Court.To empower primary courts with the jurisdiction to hear civil monopoly cases of first instance may encourage more consumers or smaller enterprises to file private actions under the AML.

  • Consolidation of cases

The Draft Rules originally provided that plaintiffs can file"joint actions"against the defendant.However,the Rules removed this provision and only provide that where two or more plaintiffs have separately filed lawsuits before a court over the same monopolistic conduct, the court may consolidate the cases into one case for hearing.The Rules however does not specify what would constitute"the same monopolistic conduct",whether it refers to one particular conduct or one type of conduct.Such ambiguity may give the court more discretion in determining whether or not to consolidate the cases.


  •  Allocation of burden of proof in relation to a monopoly agreement claim

Pursuant to the principles of Civil Litigation Law,a plaintiff shall bear the burden of proving:(i)the existence of the alleged monopolistic conduct;(ii)the damages it claims; and(iii)the causal relationship between the alleged monopolistic conduct and the damages.Whether or under what circumstances a plaintiff shall prove the anti-competitive effects of the challenged conduct remained a controversy before the Rules were promulgated.

According to the Draft Rules,a plaintiff does not have to prove that a monopolistic agreement,either horizontal or vertical,has the effect of eliminating or restricting competition if the challenged conduct is expressly listed in the AML as constituting a monopolistic agreement, unless the defendants have enough evidence to prove otherwise. 

The Rules,on the contrary,removed the presumption of anti-competitive effects for vertical agreements,which under the AML include fixing resale price and restricting minimum resale price("RPM").For horizontal monopoly agreements that are explicitly identified in the AML(i.e.price fixing,output restriction,market segmentation,restriction on the procurement or development of new technologies,and joint boycott),the Rules followed the position in the Draft Rules,namely the defendant shall bear the burden to prove the lack of anti-competitive effects.As to other unidentified types of horizontal monopoly agreements,it will still be the plaintiff’s burden to prove that such horizontal agreements have the effect of excluding or restricting competition.

Such a change of position may suggest that the Supreme Court has adopted different standards of proof for horizontal agreements vis-à-vis vertical agreements.The head of the Intellectual Property Division of the Supreme Court said in a press interview in relation to the Rules that in most cases,vertical agreements become harmful only if the supplier and/or the buyer has market power.Therefore,in practice,if a plaintiff intends to challenge a vertical agreement,like RPM,it may have to establish that the agreement has anti-competitive effects and that the defendant has market power.In fact,this was the position taken by a Shanghai court in the Ruibang v.Johnson&Johnson case,where the plaintiff’s vertical agreement claim was denied on the ground that it failed to prove J&J has market power and the RPM is anti-competitive.

The broader implication of this evidentiary rule is that the Supreme Court appears to be advocating a rule of reason analysis for RPM.It is not clear whether the administrative agencies,in particular,the NDRC,will follow suit.  


  •  Allocation of burden of proof in relation to an abuse of dominance claim

As to abuse of dominance,the Rules provide that the plaintiff shall bear the burden of proof regarding the dominant position of the defendant in the relevant market, and the alleged abusive conducts,whereas the defendant shall bear the burden of proving the justifications of its conduct if it asserts such a defense.

In addition,the Rules provide that if the defendants are public utility enterprises or other undertakings legally authorized to possess a monopoly position, the court may have a preliminary finding of market dominance on the basis of the market structure and the competition conditions,unless otherwise rebutted by evidence to the contrary. 

The Rules have further clarified that the plaintiff can use information publicly released by the defendant as evidence of its dominance and the court may make a finding of the defendant’s dominance on such basis.This article provides for a very helpful way for plaintiff to establish the defendant’s dominant position.Companies with market power should also become more prudent in public promotions of their market positions.

  •  Expert witness and independent professional institutions

Antitrust cases may involve very complex issues that demand industry expertise or economics analysis.The Rules therefore provide that parties to litigations can apply to the court to entrust one or two specialists to testify at court hearings.They can also apply to the court to entrust an independent institution,either agreed by both parties,or designated by the court,to conduct market survey or economic analysis.  For credibility reasons, it may take some time before independent professional institutions are involved in antitrust private actions.Nevertheless,expert witnesses have already been employed in an antitrust case,i.e.,the most recent 360 v.QQ case.3  


Since the enactment of the AML in August 2008, quite some antitrust private actions have been filed.  However, there barely is any case where the court ruled in favor of the plaintiff.More often,the courts ruled against the plaintiffs due to their failure of meeting the burden of proof.The Rules have made great efforts in filling the gap between the AML and its implementation in civil litigations. 

A lot still remains uncertain.For example,the Rules do not clarify what action a private party can file in relation to a merger.Compared to the Draft Rules,it is less clear whether indirect purchasers would have the standing as a plaintiff.It also becomes less certain as to the assumption of dominance for public utility enterprises,potentially suggesting a compromise by the Supreme Court with other interested parties.

It may be too optimistic to anticipate that the Rules may bring about an outburst of private antitrust actions.Nevertheless,the Rules have laid a solid foundation for the development of antitrust judicial reviews in China.It is expected that along with the AML administrative enforcement, AML private actions will play an increasingly important role in shaping the antitrust regime in China.


1.To read more,please refer to our articles titled"Supreme People’s Court Issues Draft Rules Governing Private Actions under the Anti-Monopoly Law","A Further Look At The Draft Rules Governing AML Private Actions,and AML Class Actions and The Draft Litigation Rules".

2. The AML enforcement agencies include the National Development and Reform Commission("NDRC"),in charge of the price-related monopolistic conducts,the State Administration for Industry and Commerce("SAIC"),in charge of the non-price related monopolistic conducts,and the Ministry of Commerce("MOFCOM"),in charge of merger control review.

3. Both Qihoo(operator of 360,the anti-virus software)and Tencent(operator of QQ,the instant messaging software)employed specialists in the court hearing held at April 18th at the Guangdong Higher People’s Court.For details of the case, please refer to our article entitled"360 v. QQ-Abuse of Dominance Action Tried at Guangdong Higher Court".