How to Compete Fairly in the Digital Era -Implications of the New Anti - Unfair Competition Law

 

Authored by Michael Gu (michaelgu@anjielaw.com) and Charles Xiang (xiangwenlei@anjielaw.com) at AnJie Law Firm

Introduction

On 4 November 2017, the Standing Committee of the National People’s Congress of China finally passed the long-awaited amendments to the Anti-Unfair Competition Law (AUCL), which takes effect on 1 January 2018.This is the first time the AUCL has been amended since it came into effect in 1993, and it will have significant impact on business practice in China.

The revision of the AUCL covers various legal issues, such as acts of confusion (Article 6), commercial bribery (Article 7), false or misleading business promotion (Article 8), infringement upon trade secrets (Article 9), illegal prize-giving sales (Article 10), spread of rumors or misleading information (Article 11), and Internet-related unfair competition by technical means (Article 12).

In particular, the revised AUCL included a new section addressing the Internet-related unfair competition. Some of the unfair competition behaviour(e.g. false or misleading online business promotion)are more like an online version of the traditional acts of unfair competition. Other Internet-related unfair competition behaviour is unique in the digital age driven by information technical means.

This article mainly focuses on the latter, i.e. unique unfair completion in the digital world,and endeavors to illustrate some precedents and interpretations of Article 12 of the AUCL and analyze how Article 12 will be applied and enforced inpractice.

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China 2020: The World's Largest Insurance Market and the Strategy of Foreign Insurers

Authored by Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry (sharifhendry@anjielaw.com) at AnJie Law Firm.

The Chinese insurance market continues to grow unabated.  While structural changes have seen a drop-off in infrastructure investment and its corresponding high levels of GDP growth, the services sector, and finance in particular, is growing strongly. This shift towards a knowledge based, digital economy is fuelling growth not only in IT, pharmaceuticals and banking, but also insurance .This growth is in line with the government’s plan to target a doubling of the rate of insurance penetration (insurance premiums as a percentage of GDP) from its previous level of around 2.4% to 5% by 2020 . By this point it is expected that insurance premium income will have reached 4.5 trillion RMB, with total industry assets of 25 trillion RMB. If this aim comes to fruition, it would mean the Chinese insurance market usurping the US to become the world’s largest insurance market .

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Recent Developments in Standard Essential Patent (SEP) Pricing Mechanisms in China and the UK

  Authored by Zhan Hao (zhanhao@anjielaw.com), Sharif Hendry(sharifhendry@anjielaw.com), Song Ying(songying@anjielaw.com)at AnJie Law Firm.

At the China Competition Policy Forum in Shanghai on August 31, 2017, a high standing official of the Price Supervision and Antimonopoly Bureau (PSAB) gave comment on the potential enactment of regulations on Standard Essential Patent (SEP) licensing practice by China’s National Development and Reform Commission (NDRC). This proposal follows in the wake of forthcoming draft Intellectual Property Rights (IPR) related antitrust guidelines that are expected to provide an analytical framework and recommended approaches to SEP related issues in China. The new proposed SEP guidelines will advise on a more fixed approach to the pricing mechanism for SEP licenses, as they apply to products used or sold in China , since these would not be covered under the forthcoming IPR guidelines.

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The Ascent of "Insurtech" in China

 Authored by Zhan Hao (zhanhao@anjielaw.com), Sharif Hendry(sharifhendry@anjielaw.com), Yu Dan(yudan@anjielaw.com) and Chen Jun( chenjun@anjielaw.com) at AnJie Law Firm.

ZhongAn, a Chinese insurance company selling online insurance products, is representative of a new wave of “insurtech” companies; insurers engaging with online distribution models (or tech companies foraying into insurance) that recognize the gains to be had by entering this emerging market. The China Insurance Regulatory Commission (NDRC) has been forthright in recognizing and encouraging innovation centered on new types of insurance products and online distribution on a national level, and on the back of this favorable regulatory environment, companies and investors are following suit.

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Anti-monopoly Enforcement Trends in Healthcare Industry

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

The healthcare industry has gradually become one of the key focal points of the anti-monopoly law enforcement in China. As of the end of July 2017, the National Development and Reform Commission (NDRC) and the State Administration for Industry and Commerce (SAIC) have concluded and published nine anti-monopoly penalty cases, targeting 16 healthcare enterprises with a total fine of about RMB 134 million since the implementation of the Anti-Monopoly Law in 2008. We foresee the two law enforcement authorities potentially raising a more forceful ‘anti-monopoly windstorm’ in the healthcare industry in the future and possibly investigating and penalizing in succession certain well-known pharmaceutical and medical device enterprises. Through the investigation and handling of a series of cases, the NDRC and SAIC have accumulated a significant amount of experience in the healthcare industry sector. Healthcare enterprises are likely to face a more serious anti-monopoly compliance challenge.

 

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A Comparative Insight into China's Risk Oriented Solvency System

Authored by Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry (sharifhendry@anjielaw.com) at AnJie Law Firm

As of today, the recently adopted ‘China Risk Oriented Solvency System’, also known as “C-ROSS”, is the only regime by which a Mainland insurer’s capital adequacy is regulated. Following the implementation of China’s 13th Five-Year plan in 2016, the China Insurance Regulatory Commission (CIRC), as the industry’s sole regulator, published an outline of the plan, including several goals relating to the reformation, innovation and regulation of the insurance industry. This draws interesting comparisons with the overseas capital adequacy regimes of other major jurisdictions, notably with Solvency II in the EU. Both these reforms mark a fundamental shift towards a risk-based, market-oriented approach to estimating capital requirements, being geared as they are towards individual insurance entities, rather than the previous "one-model-fits-all" approach.  This is expected to lead to greater market efficiency in managing risk, and enhance consumer protection. For China, it marks a renewed focus on both volume and value for the domestic insurance sector, implicitly recognizing that better risk management includes all drivers of product profitability, including product terms and conditions, guarantees, pricing and underwriting . As a result, the transition towards fully implementing, supervising and enforcing the C-ROSS regime is already having far reaching repercussions. 

 

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A Closer Look at the Chinese Cyber Risk Insurance Industry

Authored by Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry (sharifhendry@anjielaw.com) at AnJie Law Firm
 
Recent “ransomware” attacks worldwide, including greater China, have once again brought to the fore the nascent yet potent threat “cyber risks” present as an all-encompassing enterprise risk management challenge to corporations worldwide. Concordantly, the raft of operational consequences that can potentially cascade from an attack, including the liability of directors and officers for errors and omissions, reputational and market valuation knock-on effects, and regulatory compliance issues1, present an ever burgeoning opportunity for insurers to expand further into this potentially lucrative new line of business.
 

 

A Rational Approach towards Abuse of Collective Market Dominance in Antitrust Law

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Song Ying(songying@anjielaw.com) and Tian Chen (tianchen@anjielaw.com)at AnJie Law Firm

1.Introduction

The concept of abuse of collective market dominance (“Collective Abuse”)stems from Article 102 of the Treaty on the Functioning of the European Union (“TFEU”), (formerly Article 82 of the European Community Treaty) and was first acknowledged by the EU General Court in 1992.

According to Article 102 of the TFEU, Collective Abuse refers to two or more undertakings abusing their concentrated market dominance based upon some kind of connection between/among them. However, since there are no specific applicable rules for this concept under EU competition laws or guidelines, and with the concept being applied in only a few cases under EU competition law practice, from an antitrust perspective, the relevant competition issues have to some extent not been solved. Hence, there is still plenty of theoretical and practical space to discuss those issues. For these reasons, this article is written from three aspects of this topic as follows, with the intention of shedding light on the rationale behind this concept, and the precautions to take when applying Collective Abuse.
 

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Upcoming Regulations for Investors in Insurance Companies

Authored by Zhan Hao (zhanhao@anjielaw.com) and Dong Xin at AnJie Law Firm

In China, amidst fierce competition amongst insurance companies, more and more investors, both domestic and foreign, are striving to enter this market. Relevant regulations concerning investment limits and the qualifications for shareholders to invest in Chinese insurance companies are a continuing focal point for potential investors.

 

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Declarations of Death in Personal Insurance Contract Cases

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Kang Xin at AnJie Law Firm.

A declaration of death is a civil declaration that may be granted when a natural person is missing from his or her usual residence and his or her whereabouts have been unknown for the requisite period set by law, and for which an interested person may apply to the people's court. Article 23 of the General Principles of the Civil Law of the People's Republic of China provides that:

"Under any of the following circumstances, an interested person may apply to the people's court for the declaration of a citizen's death: (1) if the citizen's whereabouts have been unknown for four years; or (2) if the citizen's whereabouts have been unknown for two years after the date of an accident in which he was involved."

 

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