China Monthly Antitrust Update: October 2022

Legislation

SAMR Reports the Public Feedback on the Draft Revision of Four AML Supporting Regulations 

On September 28, 2022, the State Administration for Market Regulation ("SAMR") published the public feedback on the draft revision of the four anti-monopoly law supporting regulations. SAMR received 339 pieces of suggestions in total. On June 24, the new Anti-monopoly Law ("AML") was passed. To implement the new AML, SAMR solicited comments for the revision of five department regulations and one administrative regulation from June 27 to July 27. SAMR will revise the regulations according to the feedback and continue the relevant work based on the procedure. [1]

SASAC Issues the Measures for Compliance Management of Central Enterprises

On September 16, the State-owned Assets Supervision and Administration Commission ("SASAC") published the Measures for Compliance Management of Central Enterprises ("Measures"). The purpose is to encourage central enterprises to strengthen compliance management, effectively prevent and control risks, and guarantee the deepening of reform and high-quality development. The Measures will come into effect on October 1, 2022. The Measures requires to strengthen compliance risk prevention in key areas and formulate special management guidelines, in which anti-monopoly compliance is given the top priority. [2]

Authorities

Fourteen Provincial AMRs Talk About the Anti-Monopoly Top Priority This Year: Stop Administrative Monopoly and Promote Competition, and Thoroughly Implement the Fair Competition Policies

This year, in accordance with the unified deployment by SAMR, focusing on the "stimulation of the vitality of market players and smooth domestic circulation", local administrations for market regulation ("AMR") deeply carry out law enforcement special actions to stop the abuse of administrative power to exclude and restrict competition, as well as to promote stability of macroeconomic, make contributions to high-quality development. Persons in charge of the provincial AMRs were invited to the interview, and mentioned that one of the anti-monopoly priorities this year is to stop administrative monopolies and promote competition, and implement fair competition policies in depth. [3]

Henan Provincial AMR Issues the Anti-monopoly Warning Letter for Key Industries

On September 20, 2022, Henan Provincial AMR issued the Anti-monopoly Warning Letter for Key Industries. In recent years, undertakings in various industries in Henan have gradually enhanced their awareness of anti-monopoly compliance, and the business environment for fair competition has improved. However, the number of complaints and reports on suspected monopoly behaviors in some industries across the province has increased, and the suspected monopoly violations seemed to become frequent. Some have gradually formed the risk of industrial and regional monopoly violations. For these reasons, Henan Provincial AMR, according to the newly revised AML, warned the undertakings of key industries not to engage in relevant monopoly behaviors. [4]

Opinions of the General Office of the State Council on Further Optimizing the Business Environment and Reducing Institutional Transaction Costs for Market Entities Issued

On September 15, the General Office of the State Council issued the Opinions of the General Office of the State Council on Further Optimizing the Business Environment and Reducing Institutional Transaction Costs for Market Entities, which requires to further optimize the business environment, strengthen the law enforcement on anti-monopoly and anti-unfair competition. Relevant authorities should fully implement the fair competition review system, organize and carry out special actions to stop the abuse of administrative power that excludes and restricts competition by the end of October 2022. In the meantime, relevant authorities should investigate and punish malicious subsidies, price dumping, and unreasonable trading conditions in accordance with the law. [5]

Zhejiang Provincial AMR Conducts Antitrust Compliance Counsel for 647 Listed Companies in the Province

Recently, Zhejiang Provincial AMR conducted antitrust compliance counsel for the listed companies in the province. Many experts in the antitrust area were invited. The event was held for all 647 listed companies for antitrust compliance counsel. Many industries were involved, such as platform economy, equipment manufacturing, biomedicine, electronic technology, and public utility enterprises. [6]

Public Enforcement

Hunan Provincial AMR Imposes Administrative Penalties on Five Driving Schools for Monopoly Agreements

On September 2, 2022, SAMR released the administrative penalty decisions given by Hunan Provincial AMR to five driving schools for monopoly agreements. This case was assigned by local public complaints and proposals administration. After investigation, it was found that the five driving schools jointly reached and implemented an agreement on price-fixing which restricted competition in the motor driver training market in Xintian County. Ultimately, the five driving schools were fined a total of RMB 321,778.1. [7]

Merger Control

SAMR Releases the Merger Review Decision on the New Joint Venture Between Shanghai Airport and Eastern Air Logistics

On September 14, 2022, SAMR released the merger review decision to approve the new joint venture between Shanghai Airport (Group) Co., Ltd., and Eastern Air Logistics Co., Ltd., with restrictive conditions. In view of the fact that this concentration of undertakings has or may have the effect of excluding or restricting competition in the market of cargo terminal services at Shanghai Pudong Airport and the market of international/domestic air cargo services with Pudong Airport as the origin or destination, the SAMR decided to approve this concentration with restrictive conditions based on the commitment plan submitted by the filing party. [8]

Courts Litigation

Shanghai Intellectual Property Court to Hear Apple's Case for Abuse of Market Dominance 

According to the court session published by Shanghai Intellectual Property Court online, the case that Apple was sued for abuse of its market dominance will be heard on the morning of October 20, 2022. The plaintiff claimed that the price of many digital products purchased through the Apple channel was higher than that in the Android channel, and the only choice for transaction was Apple Pay, which was suspected of abusing its dominant market position. During the period of submission of the pleadings, Apple Shanghai raised an objection to the jurisdiction, and the Supreme People's Court ruled that Shanghai Intellectual Property Court had the jurisdiction over the case. [9]

SPC Clarifies Again China Has Jurisdiction over Cases About SEP Global License Fees in OPPO v. Nokia

On September 7, the Intellectual Property Tribunal of the Supreme People's Court ("SPC") made a final judgment on the jurisdiction of OPPO v. Nokia on the global licensing fee dispute, and rejected Nokia's appeal. The Tribunal finally determined that China is one of the main places for licensing the standard essential patents involved in the case, negotiating the license agreement, performing the contract that could be reasonably foreseen, and implementing the main license. It has a close geographical connection with the dispute in this case, and the Chinese court has indisputable jurisdiction over this case. Among them, the court where the standard essential patent is mainly implemented has proper contact with the dispute, thus it has jurisdiction over the dispute, and can hear the dispute about the licensing conditions for the standard essential patent involved in the case. [10]

The First Anti-Monopoly Case for Public Data in China: Second-hand Car Dealer Sues Lemon Search Platform for Abuse of Market Dominance

Recently, Shanghai Yuhan Automobile Technology Co., Ltd. ("Yuhan"), which is engaged in second-hand car trading, filed an anti-monopoly lawsuit against Beijing Youche Information Technology Co., Ltd. ("Youche"), the operator of "Lemon Search", and believed that it had a monopoly position because it could easily access the public data from the National Automobile Insurance Information Platform. Youche charged unfair high prices to data demanders including Yuhan for querying data, and applied discriminatory treatment to non-members of China Automobile Circulation Association, which violated the principle of fair and open public data, damaged the legitimate rights and interests of data demanders to obtain public data. Its abuse of market dominance violated the AML. This case has been formally accepted by Beijing Intellectual Property Court. [11]

SPC Rejects the Township Kindergarten's Appeal on the Horizontal Agreement Case

On September 8, the judgment of the second instance for the dispute over the horizontal monopoly agreement between Jinxian Wenzhen Art Kindergarten and Jinxian Wenzhen Liujiayi Kindergarten was published online, in which the SPC held that the implementer was not entitled to claim compensation based on the monopoly agreement. [12]

SPC Finds Collective Market Dominance for the First Time, Telecom Operators Involved Again

On June 23, in the case of Ma Lijie v. China Mobile Communications Group Henan Co., Ltd. for abuse of market dominance to implement restrictive dealing and discriminatory treatment, the SPC for the first time explained the factors and proof standards for the determination of collective market dominance. The SPC held that "according to the general experience of market operation, if multiple operators in the relevant market adopt different behaviors in relation to the same kind of business, it is often a normal manifestation of market competition among operators, and there is no need to consider collective market dominance at this time. Therefore, only when multiple operators in the relevant market adopt the same behavior in relation to the same kind of business, reflecting the consistency of behavior, there is a need to consider collective market dominance. For this reason, in addition to examining the market share of multiple undertakings, factors such as consistency of undertakings' behavior should also be taken into consideration when determining if they formed collective dominant position.” [13]

[1] https://www.samr.gov.cn/hd/zjjg/202209/t20220927_350398.html?afFfvuaSlo7F=1665213710229 

[2] http://www.sasac.gov.cn/n2588030/n16436141/c26018430/content.html 

[3]http://www.cmrnn.com.cn/content/2022-09/05/content_219514.html，http://www.cmrnn.com.cn/content/2022-09/05/content_219501.html 

[4] https://scjg.henan.gov.cn/2022/09-20/2610031.html 

[5]http://www.gov.cn/zhengce/content/2022-09/15/content_5709962.htm 

[6] https://baijiahao.baidu.com/s?id=1743279341247644833&wfr=spider&for=pc 

[7]https://www.samr.gov.cn/fldys/tzgg/xzcf/202209/t20220902_349784.html?afFfvuaSlo7F=1665389118960 

[8]https://www.samr.gov.cn/fldes/tzgg/ftj/202209/t20220914_350009.html 

[9]http://www.shzcfy.gov.cn/ktgg.jhtml?lmdm=ktgg&ds_p=11 

[10] https://mp.weixin.qq.com/s/EiBMnsB8JWfCNOFI8kFqiw 

[11] https://mp.weixin.qq.com/s/RyWDNy2XyCe3R4HfnvMU0A?scene=25#wechat_redirect 

[12] https://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=17c2faba16d2450c9333af0a006c4499 

[13]https://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=9914afbd732b483e8753af10006c40d1 

Source: Beijing Dacheng Law Offices LLP - Jet Deng and Ken Dai

Editor: IPR Daily-Ann