May 24 2012
On May 4 2012 the Supreme People's Court issued the Regulations on Several Issues Concerning the Application of Law in Trials of Monopoly Civil Disputes Arising from Monopolistic Conduct, which will come into effect on June 1 2012. Drafting work on this new judicial interpretation - the first of its kind on the Anti-monopoly Law - began in early 2009. On April 25 2011 the court released a consultation draft and the influence of public feedback on the version now issued is clear in several areas.
Since the law came into force in August 2008, civil anti-monopoly cases have become increasingly prominent. According to Supreme Court records, by the end of 2011 local courts had accepted 61 civil actions under the law as courts of first instance, of which they had concluded 53. However, civil disputes regarding monopolistic conduct generally make for complicated court proceedings, regardless of whether they involve anti-competitive agreements or abuse of a dominant position. The legal problems are often closely intertwined with issues of economic data and analysis, and such cases cannot be analysed without a sound understanding of the specific sector. Moreover, some areas of the law are principle-based and highly abstract in comparison to the simple provisions on the operation of the courts. Therefore, the interpretation will undoubtedly have a significant practical influence on the courts' consideration of anti-monopoly cases. The interpretation covers a number of significant aspects of application, including:
In so doing, the interpretation establishes a basic framework for private proceedings in anti-monopoly matters.
The interpretation makes clear that civil suits can be filed not only by the counterparties of undertakings that implemented monopolistic agreements or abused their dominant position, but also by purchasers that have been harmed, directly or indirectly, by monopolistic conduct. Article 1 provides that a legal or natural person can file suit for losses arising from a breach of the law in a contract or in the rules of an industry association. Nevertheless, the issue of whether consumers have standing as plaintiffs is still not entirely clear.
Two ways of filing suit
Article 2 provides that a plaintiff may file suit directly with the court, but also has the option of filing suit after the antitrust enforcement authorities have issued a determination of monopolistic conduct and this decision has come into effect.
Article 3 clarifies the principle of centralised jurisdiction. At first instance, civil cases regarding monopolistic conduct should normally be heard by intermediate courts of:
In addition, such cases may come before intermediate courts as designated by the Supreme People's Court. Some first-level courts may also hear such cases at first instance, with the Supreme People's Court's approval.
Burden of proof
In its provisions on the burden of proof, the interpretation distinguishes between different types of monopolistic behaviour. For specific horizontal monopoly agreements that eliminate or seriously restrict competition, the burden of proof rests with the defendant. However, for cases of abuse of dominant market position by public enterprises (as well as other operators which qualify exclusively as business entities), the interpretation appropriately reduces the burden of proof for a plaintiff in a civil lawsuit.
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