Note of Caution: Record Fines on 12 Japnese Auto Parts and Bearing Manufactures - Analysis of the NDRC's Penalty Decision and Countermeasures of Companies

Authored by Michael Gu (michaelgu@anjielaw.com) at AnJie Law Firm

Within six years of implementation of China's Anti-Monopoly Law, the China's law enforcement agency responsible for supervising price monopoly, the National Development and Reform Commission ("NDRC"), continues to strengthen its law enforcement efforts with rounds of “antitrust storm” that swept across a number of industries and companies along with record fines. This is especially true since 2013, the NDRC has probed into number of high-profile penalty cases, including the LCD Panel case [1], Moutai and Wuliangye case [2], Baby Formula case [3], Shanghai Gold Jewelers case [4] and Spectacle Lenses case [5]. Meanwhile, the NDRC has also launched investigation into the US high-tech giants, InterDigital and Qualcomm. For InterDigital case, the investigation has been suspended [6]. As for Qualcomm case [7], Qualcomm has manifested their willingness to cooperate with the NDRC in its investigation and has submitted relevant commitment.

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China's Antitrust Enforcement is at Its Full Swing

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Dr. Song Ying from AnJie Law Firm

Since the very beginning of 2014, China’s public antitrust enforcement has attracted increasing attention domestically and abroad. Apart from business people, antitrust scholars and lawyers, even common people in the mainland have gotten to be familiar with the terminology of “antitrust”. The enforcement of China’s two antitrust investigative authorities, the National Development and Reform Commission (“NDRC”) and the State Administration for Industry and Commerce (“SAIC”), has foreboded two tendencies recently, which will be elaborated in the following.

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The Application of Reinstatement Value Insurance

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Song Yiqiu from AnJie Law Firm

Reinstatement Value Insurance is applied more and more in PRC insurance market. However, the Insurance Law of the People’s Republic of China does not specifically define the Reinstatement Value or how to apply the Reinstatement Value Insurance. This article pertains to briefly analyze the application of Reinstatement Value Insurance.

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Does Supreme People's Court's Decision Open the Door for Foreign Arbitration Institutions to Explore the Chinese Market?

Authored by Arthur Dong (dongxiao@anjielaw.com) from AnJie Law Firm and Li Meng

Whether foreign arbitration institutions could conduct arbitration in the People’s Republic of China (“PRC”) is a question that many industry insiders are curious about. Back in 2006, when the Wuxi Intermediate People’s Court (“Wuxi Court”) refused to recognize and enforce an arbitral award issued by the ICC Court of Arbitration in Shanghai in the Züblin case,1 many practitioners deemed that Chinese courts would decline opportunities for foreign arbitration bodies to carry out arbitration in China. However, the recently published PRC Supreme People’s Court (“SPC”) instruction in Longlide Packaging Co. Ltd. v. BP Agnati S.R.L. may suggest otherwise.

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General introduction on FATCA

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and He Shan from AnJie Law Firm

At present, most Chinese financial institutions are paying quite close attention to the ongoing process of Chinese participation in the implementation of FATCA. It is heard that the Chinese government has made its decision to sign the bilateral with the U.S. government. If this is true, Chinese financial institutions will undertake many more obligations. Some other countries have already signed this kind of treaty. FATCA is like a storm sweeping the whole world and will rewrite the financial order all over the world. At this moment, it is necessary to know that in general, FATCA has already become a buzzword in the financial area.

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SAIC Moves Closer to Antitrust Rules for IP

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) from AnJie Law Firm

On June 11, 2014, China’s State Administration for Industry and Commerce (SAIC) released the latest draft [1] of regulations designed to implement the Anti-Monopoly Law (AML) with respect to intellectual property rights—Rules of the Administration of Industry and Commerce on the Prohibition of Abuses of Intellectual Property Rights for the Purposes of Eliminating or Restricting Competition (Rules), to solicit public opinions. The Rules describe the authority’s enforcement policies, criteria of proof, and types of acceptable evidence in its analysis of suspected anti-competitive conduct involving IPR. The period of calling for public opinions will expire on July 10, 2014.

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Excessive pricing and standard-essential patents

Authored by He Jing (hejing@anjielaw.com) and Dong Xue from AnJie Law Firm

On May 22 2014, China’s National Development and Reform Commission (NDRC) announced the suspension of the investigation against Inter Digital Communications (IDC), a US wireless technology developer, as the company had submitted detailed  measures to address the regulator’s concerns. What is interesting is the differences in the IDC measures between the press release of NDRC and that of IDC. NDRC states that:

1) IDC will not charge Chinese enter- prises discriminatory and excessive patent licensing fees.

2) IDC will not bundle standard-essential patents (SEPs) with non-SEPs in the patent licence.

3) IDC will not require a Chinese manufacturer to agree to a royalty-free, reciprocal cross-licence.

4) IDC will not force Chinese enterprises to accept unreasonable licence conditions through direct legal action.

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No Way: Top Three Shipping Liners' Proposed Alliance was Blocked by Chinese Watchdog

Authored by Michael Gu (michaelgu@anjielaw.com) and Yu Shuitian from AnJie Law Firm

Introduction

On the very last day of the statutory period for a merger review (i.e. June 17, 2014), China’s Ministry of Commerce (“MOFCOM”) rendered its decision to prohibit the proposed shipping alliance among the world’s three largest liner shipping operators, namely, Maersk Line (“Maersk”), Mediterranean Shipping Co and CMA CGM (“P3 Alliance”). The proposed P3 Alliance would be structured as a limited liability partnership in England and Wales. It will be in overall charge of operational matters of all the participating undertakings’ container liner business on the world’s three major shipping routes - Asia to Europe, Transatlantic, and Transpacific. According to MOFCOM’s decision [1] and a statement of the explanations [2], MOFCOM concluded that the P3 Alliance was actually a “close joint operation” and it would have restrictive and anti-competitive effects on the Asia-Europe container shipping market. MOFCOM further pointed out that the parties cannot prove that the positive impact of the proposed alliance will outweigh the negative impact or that the alliance will serve public interest. The parties negotiated with MOFCOM for possible remedial measures for several rounds and submitted a final remedy proposal for review on June 9, 2014. However, MOFCOM observed that the remedy plan lacked legal basis and convincing evidence, thus it cannot resolve MOFCOM’s competition concerns.

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MOFCOM Updated Rules on Merger Control Filing

Authored by Michael Gu (michaelgu@anjielaw.com) and Yu Shuitian from AnJie Law Firm

Introduction

MOFCOM released the amended Guiding Opinions on Notification of Concentration of Undertakings (“Guiding Opinions”) on June 6, 2014. The amendments significantly expanded the content of the previous 2009 version of the Guiding Opinions. The number of articles in the Guiding Opinions is now 30, in comparison to 12 of the 2009 version. This is the third regulation on merger control issued by MOFCOM in 2014. Another merger control related regulation concerning the imposition restrictive conditions is currently being drafted and might be published this year as well. Among other things, four important areas of merger control filing that gave rise to a great deal of discussion in the past have now been clarified under the Guiding Opinions. These four areas include definition of control, calculation of turnover, status of joint venture in identifying concentration and pre-notification consultation.

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Non-filers Beware: MOFCOM Takes More Strict Approach

Authored by Michael Gu (michaelgu@anjielaw.com) from AnJie Law Firm

Introduction

On March 21, 2014, the PRC Ministry of Commerce (“MOFCOM”) announced that it decided to publicize the decisions of administrative penalties of undertakings which did not submit a notification prior to the implementation of their concentration. These decisions involved undeclared concentrations formally investigated after May 1, 2014 in accordance with the Anti-Monopoly Law (“AML”) of the PRC and the Interim Measures on Investigation of Failure to File Concentration of Undertakings (“Interim Measures”). As for those formally investigated before May 1, 2014, MOFCOM will still impose administrative penalties if necessary but may choose not to announce such decisions. In order to facilitate the implementation of this policy, MOFCOM had set up a hotline phone number (+86 10 65198998) for whistleblower complaints.

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