China’s Guangdong Provincial Administration for Industry and Commerce (“Guangdong AIC”) fined local trade association Guangzhou Panyu Animation and Game Association (“GAGA”) RMB 100,000 for alleged monopolistic conduct, according to a penalty decision posted on the website of the State Administration for Industry and Commerce (“SAIC”) on 8 December 2015. This is the first ever boycott case penalized by the PRC competition enforcement agencies.
According to the penalty decision, the Guangdong AIC’s investigation was not triggered by third party complaints, as is often the case; instead the agency initiated the investigation based on a report published by Guangzhou Daily on 13 March 2013. The local newspaper reported that GAGA had signed an “exhibition alliance agreement” (“Alliance Agreement”) with its 52 members. Under the Alliance Agreement, GAGA’s members were prohibited from attending exhibitions that were either not related to the animation and game industry or not approved by GAGA.
After an initial investigation, the Guangdong AIC regarded that GAGA’s behavior might violate China’s Anti-monopoly Law (“AML”). On 21 July 2014, the Guangdong AIC officially started its probe into the suspected conduct after obtaining authorization from the SAIC.
After further investigation, the Guangdong AIC concluded that the Alliance Agreement constituted a monopolistic agreement under Article 13 of the AML since the participants were competing undertakings and the Alliance Agreement was designed to carry out a boycott which effectively restricts or eliminates competition. Therefore, citing Article 46(3) of the AML, the agency imposed a penalty of RMB 100,000 on the association, and ordered it to cease the illegal conduct.