Competition Law/ Anti-Monopoly Law

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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. Continue Reading China’s Antitrust Enforcement is at Its Full Swing

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

Introduction

There is a joke in reference to the relationship between antitrust and intellectual property and the conflicts between them, which goes, “It is not easy to marry the innovation bride and the competition groom and some have argued that such a marriage will unavoidably lead to divorce.” Nowadays it is not a problem if there is an intrinsic conflict between them. In China, the principle that both of the two legal regimes serve the common purpose of promoting innovation and enhancing consumer welfare is broadly acknowledged.Continue Reading Abuse of Dominance in Relation to Intellectual Property: From China’s Perspective

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

Introduction

There is a joke in reference to the relationship between antitrust and intellectual property and the conflicts between them, which goes, “It is not easy to marry the innovation bride and the competition groom and some have argued that such a marriage will unavoidably lead to divorce.” Nowadays it is not a problem if there is an intrinsic conflict between them. In China, the principle that both of the two legal regimes serve the common purpose of promoting innovation and enhancing consumer welfare is broadly acknowledged.Continue Reading Abuse of Dominance in Relation to Intellectual Property: From China’s Perspective

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.Continue Reading SAIC Moves Closer to Antitrust Rules for IP

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.Continue Reading No Way: Top Three Shipping Liners’ Proposed Alliance was Blocked by Chinese Watchdog

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. Continue Reading Non-filers Beware: MOFCOM Takes More Strict Approach

Authored by Dr. Zhan Hao and Dr. Song Ying

Following the antitrust watchdog in Germany, Japan, Taiwan and the United States, the Ministry of Commerce of the People’s Republic of China (MOFCOM) conditionally cleared Merck KGaA’s (Merck) acquisition of AZ Electronic Materials S.A. (AZ Electronics) on April 30, 2014. It means that Merck has won the last pass it needed to wrap up the takeover.

As the world’s oldest chemical and pharmaceutical company, Merck was founded in Darmstadt in 1668. The company was privately owned until going public in 1995. The Merck family, however, still controls a majority (roughly 70%) of the company’s shares. Continue Reading Last Hurdle for Merck’s Acquisition of AZ Electronics Removed: MOFCOM’s 23rd Conditional Clearance

Authored by Dr. Zhan Hao and Dr. Annie Xue

clevel play ground, optimizing industry structure, promoting competitiveness, and enriching the risk management tool kit of the insurance institutes”, quoting a statement of CIRC posted on its website. [1]

Promotion of Competition

CIRC’s partially relaxed mergers and acquisition rules in the insurance sector are expected to help facilitate market entry and expand the footprint of private capital, including the domestic and China-based foreign-funded insurance firms.Continue Reading China Issues New Insurance Merger Rules

Authored by Dr. Zhan Hao and Dr. Annie Xue

China has seen another far-reaching step towards deregulating the strictly regulated telecommunication sector.

On May 9, 2014, the Ministry of Industry and Information Technology of the P.R.C. (MIIT) and the National Development and Reform Commission (NDRC) jointly issued a notice announcing liberalizing pricing of the telecommunication services (Notice). [1] This policy has come into force on May 10, 2014.

Backdrop

The price liberalization in the telecommunication sector comes when the ruling party vows to comprehensively deepen the reform and looks to the market as the essential price-setting mechanism. And the Notice is an execution of the State Council’s Decision on Removing and Delegating Some Items Requiring Administrative Approval, [2] which was promulgated on January 28, 2014.Continue Reading China Deregulates Pricing in Telecommunication Sector

Authored by Zhan Hao (zhanhao@anjielaw.com)      
 

On August 1 2013, Shanghai People’s High Court (the Court) handed down judgment on the first private antitrust action involving vertical agreements under the minimum resale price maintenance (RPM) clause of China’s Anti-monopoly Law (AML). The Court rescinded the judgment of the first instance court and ordered the US-headquartered health care giant Johnson & Johnson Medical (China) Ltd. and its Shanghai branch (collectively J&J) to pay their Beijing-based former distributor Rainbow Medical Equipment & Supply Co. (Rainbow) RMB 530,000.

This judicial decision was made against the backdrop that the recent high-profile luxury liquors case and baby formula case handled by antitrust implementing agencies of China have demonstrated a new trend of striking both horizontal and vertical monopolies, but the agencies used to invest much more efforts in investigating horizontal monopolies. The Court’s judgment marks the first official deliberation of the Chinese judicial bodies over vertical monopoly agreements. Meanwhile, the judgment has also helped to mitigate the lack of transparency of how to deal with vertical monopoly agreements by the government bodies, as the ruling has clarified the Court’s attitudes towards vertical monopolies, in particular vertical price agreements, and the analytical approach. In this sense, the judgment is of great importance.

Continue Reading Chinese Court’s Roadmap on Vertical Monopoly Analysis: Some Comments on the Final Judgment on Rainbow vs. Johnson & Johnson Case