Authored by Michael Gu (michaelgu@anjielaw.com)

I.       BACKGROUND

On 8 May 2012, the PRC Supreme People’s Court (“Supreme Court”) issued the long-awaited Provisions on Certain Issues Concerning the Application of Law in Hearing Cases Involving Civil Disputes Arising out of Monopolistic Behaviors (“Judicial Interpretation”), which will become effective on 1 June 2012.Being the first interpretation on antitrust litigations, it lays the foundations of the antitrust litigation legal framework in China. The Judicial Interpretation provides guidance to the courts’ precise application of the Anti-Monopoly Law (“AML”), the undertakings’ compliance and avoidance of the legal risks in their business operation, or consumers’ initiation of antitrust litigations.

The drafting and issuance of the Judicial Interpretation has gone through an extremely lengthy process. The Supreme Court started the drafting in 2009, at the beginning of the AML’s implementation. After numerous rounds of amendments, the Supreme Court released the draft of the Judicial Interpretation for public consultation on 25 April 2011. Although the Judicial Committee of the Supreme Court has approved the Judicial Interpretation on 30 January 2012, the text of the Judicial Interpretation was not publicly released until more than three month later. The extraordinary long process and delayed issuance might indicate that the Judicial Interpretation has raised exceptional disputes during its drafting process, and that the Supreme Court shows a prudent attitude towards the Judicial Interpretation in terms of the content and timing.

The AML contains only one article (i.e. Article 50) with respect to the civil litigation, which provides that “any undertaking who engages in monopolistic act resulting in losses to another person, it shall bear civil liabilities according to law”. The Judicial Interpretation not only supplements the AML and addresses many procedural issues regarding the civil litigations; it also throws light as to how the Tort Liability Law, the Contract Law and Civil Procedure Law may apply in dealing with the antitrust civil disputes. The Judicial Interpretation clarifies certain matters related to the antitrust litigations, such as the filing, acceptance, jurisdiction, evidence rules, civil liabilities and time limit of case filing. Compared with its consultation draft released earlier, the Judicial Interpretation is simplified to 16 articles with approximately 2,000 words in total. By dropping the controversial articles and stating only the general principles for some issues, the final version of the Judicial Interpretation is more aligned with existing laws while ensuring that it remains flexible to deal with unforeseen situation that may arise in the future.

Continue Reading Far-Reaching Impact of the First Judicial Interpretation on Antitrust Civil Litigations

Authored by Michael Gu (michaelgu@anjielaw.com)

I. OVERVIEW

It has taken 13 years for China to finally promulgate the Anti-monopoly Law of the People’s Republic of China ("AML") which was passed on 30 August 2007 and took effect on 1 August 2008. The AML aims to prevent and restrain monopolistic behaviors, protect fair market competition, improve economic efficiency and safeguard interests of consumers and the public. The AML regulates the following four types of monopolistic behavior: monopoly agreements, abuse of dominant market position, concentration of undertakings and administrative monopoly.

II. LAW ENFORCEMENT AND REGULATORY ANTHORITIES

The highest regulatory body of anti-monopoly law-enforcement is the State Council Anti-Monopoly Commission ("SCAC"), established in August 2008. The SCAC members include heads and relevant officials from the Ministry of Commerce ("MOFCOM"), the State Administration for Industry and Commerce ("SAIC"), and the National Development and Reform Commission ("NDRC"). SCAC, a coordinating body under the State Council, does not participate in specific anti-monopoly law enforcement, but is mainly responsible for drafting competition related policies, organizing investigations, assessing the overall market competition, publish assessment reports and anti-monopoly guidelines, and coordinating anti-monopoly law-enforcement. SCAC established an office in September 2011 and the office takes charge of SCAC’s day-to-day work which was previously assumed by the Anti-monopoly Bureau of MOFCOM.

According to relevant State Council regulations, the administrative law-enforcement authorities are MOFCOM, SAIC and NDRC.

(1) MOFCOM is the enforcement agency in charge of antitrust reviews and investigations in connection with concentration of undertakings. The specific law-enforcement department is the Anti-monopoly Bureau.

(2) SAIC mainly regulates abuses of dominant market positions and abuses of administrative powers to eliminate or restrict competition (excluding price-related conducts). The specific law-enforcement department is the Anti-monopoly and Anti-unfair Competition Enforcement Bureau.

(3) NDRC principally administers price monopolies, including price-related monopoly agreements, abuses of dominant market position and administrative monopoly. The specific law-enforcement department is the Price Supervision and Inspection Section.Continue Reading An Introduction of the Anti-Monopoly Law in China

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

1.       Overview of the Jurisdiction System of Private Antitrust Litigation

Private Antitrust Litigation belongs to the civil proceeding in nature and its relationship with the civil proceeding can be summarized as the special and general. Despite that there are differential rules and slight variances in private antitrust litigation; they are still designed rooting from general theories, principles and systems of civil proceeding.

The jurisdiction in the civil proceeding refers to division of work and authorities among People’s Courts of all levels or courts of the same level when civil cases of first instance were handled. Jurisdiction system serves as prerequisite and foundation of litigations. Appropriate division of the jurisdiction not only determines proper exercise of judicial power, but also prevents litigants from nowhere-to-go when filing lawsuits due to buck-passing or competing for jurisdiction between different courts. In addition, it helps protect our national jurisdiction and safeguard the interests of private subjects in foreign-related disputes. To ensure a reasonable jurisdiction, the following systems are specified in Civil Procedure Law of PRC: jurisdiction by level; territorial jurisdiction, exclusive jurisdiction, designated jurisdiction and transfer of jurisdiction. Likewise, the jurisdiction system of private antitrust litigation is framed with the aforesaid systems.  Continue Reading Study on Jurisdiction of Private Antitrust Litigation

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

On 13th August of 2012, MOFCOM granted a conditional approval on the concentration between Wal-Mart and f Niuhai Holdings Ltd (hereinafter referred to as NH) after a nearly 6-month review

MOFCOM received the concentration filing as early as Dec 16th,2011, and officially accepted the case on Feb 16th, 2012 …

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

The deal between United Technologies (hereinafter referred to as “UT”) and Goodrich has triggered widespread discussions and guess from both Chinese and foreign antitrust, business and economist circles. On June 15, 2012, MOFCOM finally disclosed its decision, issuing the fourteenth conditional approval on the UT/Goodrich deal on its Antitrust Bulletin.

The filing submission of this transaction can trace back as early as December 12, 2011; when MOFCOM received the notification on the contemplated concentration between UT and Goodrich. Perhaps being influenced by the Chinese New Year session, it took 56 days from the parties filed at the first time to MOFCOM officially accepted the filing (namely, clock for MOFCOM starts to tick).

Through comprehensive competitive assessment on the relevant market, consultation with relevant authorities, industry associations, main competitors, upstream and downstream market players and customers, MOFCOM found that the concentration at hand may eliminate or restrict competition in the market for “Aircraft AC Power Generation System”. In order to solve the aforesaid competition concerns, MOFCOM engaged several rounds of talks with the filing parties regarding the remedies. In the end, on June 6, 2012, the filing parties submitted a final commitment on how to resolve MOFCOM’s concerns, which was recognized by MOFCOM as sufficient to prevent potential competition concerns in “Aircraft AC Power Generation System” market; thus, the concentration was cleared in the end.Continue Reading MOFCOM Imposed Conditions on United Technologies’ Purchase of Goodrich

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

On May 19, 2012 MOFCOM confirmed the conditional approval of Google’s purchase of US phone maker Motorola Mobility.

On August 15, 2011 Google and Motorola Mobility signed a purchase agreement, under which Google would acquire all shares of Motorola Mobility, which would then become a wholly owned subsidiary of …

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

On 18th April, 2012, the case of dispute on the abuse of dominant market position filed by Qihoo 360 (NYSE: QIHU) against Tencent (HKEX: 700) was heard in the Superior People’s Court of Guangdong Province, with the claim of 150 million RMB. It should be recognized that, whether in terms of the claim amount or close involvement in people’s everyday life of the goods or services provided by the two parties, the fact that 360 vs Tencent case has aroused wide attention is not a surprise.

Parties of the Case

The Plaintiff:

Qihoo 360 Technology Co Ltd (referred to as “Qihoo 360”), is engaged in the operations of Internet services and sales of third party anti-virus software in the People’s Republic of China. It provides Internet and mobile security products in China. In January 2011, the Company had 328 million monthly active Internet security product users, representing a user penetration rate of 83.9% in China.Continue Reading 360 VS Tencent Impels the Growing up of Private Antitrust Litigation in China

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

On 4th May, 2012, the People’s Supreme Court issued the Regulations on Several Issues Concerning the Application of Law in relation to Trials of Monopoly Civil Disputes arising from Monopolistic Conducts (The “Judicial Interpretation”). This new Judicial Interpretations of Anti-Monopoly Law will take effect on 1st June, 2012. As the first issued judicial interpretation on the field of Anti-Monopoly law, it began to be drafted early since 2009. On 25th April, 2011, the People’s Supreme Court of China released the Draft version of the Judicial Interpretation to solicit public comments. Based on various public opinions, the official Judicial Interpretation freshly baked is different from the Draft version in some facets to some extent.

It is a fact that since 1st August 2008, when the Anti-Monopoly Law of PRC came into force, civil monopoly dispute cases have gradually become a very important type of lawsuits of People’s Courts. According to the Supreme Court’s records, as of the end of 2011, local courts in China have accepted 61 civil actions as courts of first instance under the Anti-Monopoly Law and have closed 53 of them. However, the civil monopoly dispute cases are normally difficult and complicated for the court proceedings whether in terms of anti-competitive agreements or abuse of dominant position. legal problems in such cases usually closely intertwine with economic data and analysis. Good understanding of specific field of economy is necessary with the view to analyze monopoly dispute cases. Indeed, some provisions of the Anti-Monopoly Law are highly principled and abstract. Provisions that refer to the operation of the People’s Court are stipulated relatively simple. Therefore, the issue of the Judicial Interpretation undoubtedly has a significant influence on the practical operation of the People’s Courts.Continue Reading The First Judicial Interpretation on the Anti-monopoly Private Litigation in China