Competition & Antitrust, China updates

Supreme Court: first judicial interpretation on private anti-monopoly litigation
  • China
  • 24 May 2012

Since the Anti-monopoly Law came into force in August 2008, civil anti-monopoly cases have become increasingly prominent. The first Supreme People's Court interpretation on the issue - revised following public consultation - covers a number of significant aspects, including the filing of lawsuits, jurisdictional issues, plaintiffs' standing and the relationship between public enforcement and private litigation.

Key online players in Rmb150 million dispute over abuse of dominance
  • China
  • 17 May 2012

The Guangdong Superior People's Court has heard a claim that Tencent, which operates instant messenging service Tencent QQ, allegedly used its dominant position in the messaging software and services market to force users to uninstall software supplied by anti-virus software company Qihoo 360. However, the two sides disagree on the relevant market, the relevant market share data and the existence of a dominant position.

Hubei Yihua investigation: doubts remain over reports of alleged fine
  • China
  • 26 April 2012

A number of sources in China's mainstream media reported earlier in 2012 that the National Development and Reform Commission had imposed a Rmb10.2 million fine on Hubei Yihua Chemical Industry. However, the company has announced that the reports are untrue. Competition law practitioners await an announcement from the commission with interest - whatever the inside story of the case proves to be.

Regulator imposes further conditions on Western Digital/Viviti deal
  • China
  • 29 March 2012

Three months after imposing conditions on Seagate's acquisition of Samsung's hard drive business, the Ministry of Commerce has published another conditional clearance of a concentration in the hard disk industry, this time involving Western Digital and Viviti Technologies. At 11 months from initial filing to final decision, the process was even longer than the seven-month wait in the Seagate/Samsung transaction.

Record fine for price monopoly
  • China
  • 22 March 2012

The National Development and Reform Commission recently issued the biggest fine - Rmb10.2 million - since the implementation of the Anti-monopoly Law in 2008. The decision makes a significant statement about China's economic priorities and the importance of reform within its monopolised industries.

Long-awaited measures on notification - but do penalties lack bite?
  • China
  • 16 February 2012

The Provisional Measures on Investigating and Penalising Violation of Notification Obligations for Concentrations of Undertakings have entered into force. The maximum fine under the provisional measures is tiny compared with the thresholds under the US and EU competition regimes, but the 'reputational' penalty in Article 15 may prove far more significant to enterprises in China.

Ministry of Commerce reveals steep rise in notifications of concentration
  • China
  • 09 February 2012

The Ministry of Commerce has revealed that it received 194 notifications for antitrust review of concentrations in 2011, a 43% increase on 2010. Suggesting reasons for the trend, the director of the Anti-monopoly Bureau cited greater awareness of the Anti-monopoly Law, a rise in the average size of companies in China and a prudent approach by international investors.

Ministry of Commerce clears Samsung and Seagate hard disk deal
  • China
  • 12 January 2012

The Ministry of Commerce has announced its approval of a deal between Samsung Electronics and Seagate Technology for the former's hard disk business. Among other factors, the ministry considered market position, product innovation, buying power and the potential influence on Chinese consumers and market entrants.

Ministry clears Nestlé's acquisition of Hsu Fu Chi
  • China
  • 22 December 2011

The Ministry of Commerce has officially cleared Nestlé's intended purchase of 60% of the shares in Hsu Fu Chi. The decision has dispelled the doubts raised by a variety of interested parties in recent months. In particular, the Nestlé/Hsu Fu Chi decision has resolved the concerns of foreign enterprises that China's antitrust enforcement policy is intended to protect national brands.

China Unicom and China Telecom apply for suspension of investigation
  • China
  • 15 December 2011

The Price Supervision, Inspection and Antitrust Bureau of the National Development and Reform Commission has confirmed that it has received applications from China Unicom and China Telecom for the suspension of probes into alleged abuse of dominance by the parties. It remains to be seen whether the commission will take a softer line with the state-owned enterprises.

Conditional clearance offers further insight on concentrations
  • China
  • 01 December 2011

The Ministry of Commerce recently announced the clearance of a proposed concentration between Penelope Co Ltd and Savio Macchine Tessili SpA on certain conditions. The ministry's reasoning and analysis shed light on its approach to the review of concentrations on anti-monopoly grounds.

Tmall's price rise: free economic behaviour or abuse of dominant position?
  • China
  • 17 November 2011

The recent decision by one of China's largest retail websites to impose a steep increase in fees and security deposits on its vendors sent ripples through the worlds of business, academia and politics. It also illustrated the difficulties inherent in determining what constitutes an excessive or unfair price in competition law.

Ministry of Commerce accepts Nestlé's filing for Hsu Fu Chi deal
  • China
  • 06 October 2011

The Ministry of Commerce recently stated that it has accepted notification of Nestlé's acquisition of confectionery company Hsu Fu Chi. Its approval would clear the way for one of the biggest foreign takeovers of a Chinese undertaking. The potential pro-competitive and anti-competitive effects - and the ministry's assessment of them - will be crucial to Nestlé's plans and those of future foreign acquirers in China.

Private company sues railway bureau over alleged monopoly
  • China
  • 29 September 2011

Administrative monopoly - the executive abuse of administrative power to eliminate or restrict market competition - occupies an important place in China's anti-monopoly regime. It is hoped that a case involving an alleged negative administrative monopoly in China's rail network will shed light on the courts' future approach to the issue.

Wide-ranging regulation provides guiding light for concentrations
  • China
  • 22 September 2011

The Ministry of Commerce's first guidelines on antitrust reviews of concentrations make assessments a much more transparent process for competitors, consumers and other stakeholders. Among many other things, the ministry highlights the main factors that it will consider when weighing the competitive and anti-competitive effects of a concentration.

China and US move closer on antitrust collaboration
  • China
  • 11 August 2011

China's anti-monopoly agencies have signed a memorandum of understanding with the US Federal Trade Commission and the US Department of Justice. The Chinese agencies' views on anti-monopoly regulation raise serious concerns for foreign companies and regulators, and a framework for enhanced cooperation will be widely welcomed.

Nestlé faces anti-monopoly review in Hsu Fu Chi deal
  • China
  • 28 July 2011

Nestlé has announced that it plans to commit around $1.7 billion to the acquisition of a 60% share in confectionery manufacturer Hsu Fu Chi. However, the Minstry of Commerce has announced that the turnovers of the undertakings involved are above the threshold for concentration filing. The acquisition could significantly change the composition of the Chinese confectionery market.

Can companies avoid filing concentrations?
  • China
  • 30 June 2011

When a merger, acquisition or joint venture is connected to the Chinese market and represents a concentration under the Anti-monopoly Law, a company's first question is likely to be whether the transaction must be filed. Some undertakings weigh the risk of being caught against the potential time saving and choose to not to file. This practice has become an open secret, but new provisional rules may make it a more risky tactic.

Jurisdiction for private anti-monopoly litigation
  • China
  • 26 May 2011

Since the Anti-monopoly Law was passed, around 50 private anti-monopoly litigations have been brought, and the courts' jurisdiction over such cases has become a key issue. Practice shows that so far, local courts have handled the issue of jurisdiction for private anti-monopoly litigation based on the regulations relating to IP litigation.

Revised Unfair Competition Law responds to changing economy
  • China
  • 12 May 2011

The Unfair Competition Law has been described as the constitution of the market economy. However, China's rapid social and economic development has given rise to new forms of unfair competition that the law did not foresee. A revised draft focuses on identifying the competent enforcement agency and extending the scope of administrative enforcement to new areas, particularly in the field of e-commerce.

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