China Monthly Antitrust Update: November 2022

Legislation

State Council Announces Regulations on Promoting Development of Self-employed Businesses and Stresses that Platform Operators Shall Not Impose Unreasonable Conditions

On October 25, 2022, in order to encourage, support and guide the healthy development of the individual economy, safeguard the legitimate rights and interests of individual entrepreneurs, stabilize and expand urban and rural employment, and give full play to the important role of individual entrepreneurs in the national economy and social development, the State Council announced the completed Regulations on Promoting the Development of Individual Entrepreneurs, which will come into effect on November 1, 2022. [1]

SAMR Publishes Guiding Opinions on Regulating the Discretion over Administrative Penalty for Market Regulation 

On October 8, in accordance with the Administrative Penalty Law of the People’s Republic of China and other laws, regulations, rules and relevant provisions of the State and in light of actual market regulation work practices for the purposes of regulating the administrative penalty for market regulation, safeguarding the lawful exercise of discretion over administrative penalty by market regulatory authorities and protecting the legitimate rights and interests of natural persons, legal persons and other organizations, the State Administration for Market Regulation (“SAMR”) publishes Guiding Opinions on Regulating the Discretion over Administrative Penalty for Market Regulation. [2]

Authorities

SAMR to Recruit 11 More Anti-monopoly Enforcement Personnel

On October 25, 2022, the National Civil Service Administration published an announcement on “Employment of Civil Servants in the 2023 Examination”. In the announcement, the Antitrust Enforcement Division I, the Antitrust Enforcement Division II, and the Competition Policy and Coordination Division of SAMR plan to recruit 11 civil servants. [3]

Chongqing AMR Publishes Guideline for Anti-monopoly Review of Concentrations of Undertakings

On October 19, Chongqing Administration for Market Regulation (AMR) announced the guideline for anti-monopoly review of concentrations of undertakings in Chongqing. The guide is divided into three parts: brief guide, basic requirements, and process of negotiation application, which clarifies the acceptance scope of negotiation application, application time, preparation materials and negotiation content, etc. [4]

SAMR Appoints Antitrust Director

On October 14, SAMR appointed Xinjian Xu as the director of antimonopoly and regulations division of SAMR. [5]

Shandong AMR Publishes Bid Award for Procurement Project for Anti-monopoly Evidence Collection Equipment

On October 12, the Shandong AMR issued an announcement on the bid award for the procurement project for anti-monopoly evidence collection equipment, which stated that the winning company was Jinan Huitian Yunhai Information Technology Co., Ltd, and the winning bid amounted to RMB 195,850. [6]

Centre for Competition Policy and Big Data Provides Data and Evidence Collection Services for SAMR for Anti-monopoly Review on Concentration of Undertakings

On October 10, SAMR published the results of the winning bid for the anti-monopoly review data and evidence collection and other services project, with the Centre for Competition Policy and Big Data of the SAMR as the winning bidder, with a winning bid of RMB 2.58 million. [7]

Director of SAMR (Luo Wen): Significant Achievements in Construction of Unified National Market and Breaking up Administrative Monopolies and Market Monopolies

On October 10, Luo Wen, Director of the SAMR, said in his article Historic Achievements and Changes in China’s Market Regulation that the construction of a Unified National Market has achieved significant results and the breaking up of administrative monopolies and market monopolies has been effective. The article elaborates that since 2018, the state has been committed to promoting the establishment of a nationwide fair competition review system, vigorously cleaning up and abolishing various regulations and practices that hinder the Unified National Market and fair competition, continuously strengthening law enforcement on the abuse of administrative power to exclude and restrict competition, vigorously safeguarding the order of fair competition in the market, protecting the legitimate rights and interests of various market undertakings, safeguarding the rights and interests of consumers and social public interests, and promote the continuous optimization of the ecology of China’s mega market. [8]

MOF and CAFS Officers Answer Questions from Journalist Regarding Exposure Draft of GPL

On October 9, Officers of the Ministry of Finance (“MOF”) and the Chinese Academy of Fiscal Sciences (“CAFS”) answer questions from journalists regarding exposure draft of the Government Procurement Law of the People’s Republic of China (“GPL”), the main aspects including the purpose of the amendment of the GPL; the main changes to the GPL because of this amendment; the provisions made in the exposure draft to prevent and reduce corruption in the government procurement process. [9]

Anti-Monopoly and Fair Competition Commission Established in Shanghai

On September 30, the Shanghai Anti-Monopoly and Fair Competition Commission was formally established. The office of the Anti-Monopoly and Fair Competition Commission is located in the Shanghai AMR, and the director of the office is Wenhao Peng. [10]

Public Enforcement

Hubei AMR Investigates Abuse of Administrative Monopoly of Xiangyang Administrative Approval Bureau

On October 17, 2022, Hubei AMR announced that according to the results of the investigation legally conducted on the suspected abuse of administrative power to exclude and restrict competition by Xiangyang Administrative Approval Bureau since June 2022, Xiangyang Administrative Approval Bureau violated Article 34 of the Anti-Monopoly Law of the People’s Republic of China (“AML”). Xiangyang Administrative Approval Bureau realized that the above behavior violated the provisions of the AML and actively rectified during the investigation and eliminated adverse effects. The investigation procedure of Hubei AMR thus ended accordingly. [11]

Merger Control

NDRC Director: Focus on Launching “Green Light” Investment Cases for Platform Economy

On July 28, 2022，during the Thirty-seventh Session of the Standing Committee of National People’s Congress (“NPC Standing Committee”), Lifeng He, the Director of the National Development and Reform Commission (“NDRC”) pointed out that it is necessary to promote the standardized, healthy, and sustainable development of the platform economy, complete the special rectification of the platform economy, implement normalized supervision of the platform economy, and focus on launching a number of “green light” investment cases. [12]

CIMC Terminates Acquisition of APMM Due to Merger Control and Pays Reverse Break-up Fees up to RMB 600 million 

On October 20, China International Marine Containers (Group) Co., Ltd. (“CIMC”) announced that after discussing with A.P.Møller–Mærsk A/S（“APMM”）, CIMC and APMM have signed the Settlement Agreement, and CIMC must pay APMM a settlement fee of USD 85 million (about RMB 600 million). [13]

Courts Litigation

SPC: Strengthen Anti-monopoly Justice and Legally Try Cases of “Pick One from Two” and BDDP on E-commerce Platform 

On October 19, Rong He, the Deputy Secretary of the Party Group of the Supreme People’s Court (“SPC”), pointed out at the 20th National People’s Congress (“NPC”) that the laws, regulations, and opinions issued need to serve the construction of a Unified National Market. It is necessary to strengthen anti-monopoly and against unfair competition justice to maintain fair market order. It is necessary to treat cases such as “pick one from two” and “big data discriminatory pricing”(BDDP) of e-commerce platform legally to strengthen the protection of the legitimate rights and interests of workers and consumers in new forms of employment, and promote the healthy development of the digital economy platform economy. [14]

SPP: Actively and Steadily Carry out Public Interest Litigation in Anti-monopoly and Focus on Internet and Other Areas of Livelihood Protection

On October 15, 2022, the Supreme People’s Procuratorate (“SPP”) released data on the main cases handled by the national procuratorial organs in the first three quarters of the year and pointed out the direction of development: actively play an active role in the protection of intellectual property rights and public interest litigation against market players. Repying on the public interest litigation procuratorial function to actively and steadily carry out public interest litigation in the field of anti-monopoly , with a focus on the Internet and other areas of livelihood protection to continuously enhance market vitality and create a fair and orderly market competition environment. [15]

Qinghai Local People’s Court Transfers A Compensation for Damages Case Related to Abuse of Dominant Market Positions to Intermediate People’s Court

On October 3, the People’s Court of Minhe Hui and Tu Autonomous County of Qinghai Province issued a civil ruling paper on the case Haidong Huaze Gas Appliances Trading Co., Ltd Minhe Branch v. Qinghai Province Minhe Chuanzhong Oil & Gas Co., Ltd, which, in accordance with the provisions of Article 1 and Article 3, Paragraph 1 of the Provisions of Supreme People’s Court on Several Issues Relating to the Application of Law in the Trial of Civil Dispute Cases Arising from Monopolies, held that the case should be under the jurisdiction of the Intermediate People’s Court of the city where the provincial people’s government is located, and therefore transferred the case to the jurisdiction of the Intermediate People’s Court of Xining. [16]

Changsha South Station Drinking Water Suppliers Sued for Monopoly Over Consistent Pricing, Supreme Court Rejects for Insufficient Evidence of Meaningful Liaison

On September 30, the appellant, Binquan Li, appealed against the civil judgment of the Changsha Intermediate People’s Court of Hunan in a monopoly dispute with the appellee, Hunan Xiangpintang Industry and Trade Co., Ltd. As the available evidence submitted by Li Binquan did not prove that Xiangpintang and the other five respondents had carried out the behaviours prohibited by the AML, SPC held that the available evidence in the case did not prove that Xiangpintang and the other five respondents had reached a monopoly agreement to fix the price of goods and decided to reject all of Binquan Li’s claims. [17]

Academia

The 3rd CRESSE-JUFE International Symposium on Competition Policy Successfully Held On-line

On October 18, 2022, the 3rd CRESSE-JUFE International Seminar on Competition Policy, co-organized by the Jiangxi University of Finance and Economics (“JUFE”) and the Competition & Regulation European Summer School and Conference (CRESSE), took place in the Zoom online and lasted for three days. [18]

[1]<http://www.gov.cn/zhengce/content/2022-10/25/content_5721592.htm> 

[2]<https://mp.weixin.qq.com/s/NAYQzexAKmqmBuF26Ll1yA?scene=25#wechat_redirect <https://mp.weixin.qq.com/s/NAYQzexAKmqmBuF26Ll1yA?scene=25> 

[3]<http://bm.scs.gov.cn/pp/gkweb/core/web/ui/business/download/gkdownloads.html> 

[4]<http://scjgj.cq.gov.cn/zt_225/jyzjzfldsc/sbzn/fldscsbzn/wap.html> 

[5]<https://www.samr.gov.cn/jg/gcszj/xxj/> 

[6]<https://mp.weixin.qq.com/s/LqA7DXa-Vg1p_hYkmxTvGQ> 

[7]<http://www.ccgp.gov.cn/cggg/zygg/zbgg/202210/t20221010_18786599.htm> 

[8]<http://www.gov.cn/xinwen/2022-10/10/content_5717049.htm> 

[9]<http://www.ccgp.gov.cn/zcdt/202210/t20221008_18766749.htm> 

[10]<https://www.shanghai.gov.cn/nw12344/20220930/849f1dab5857494c85ec42b88fc13354.html> 

[11]<https://scjg.hubei.gov.cn/zfxxgk/fdzdgknr/qtzdgknr/qtgg/202210/t20221017_4353198.shtml?IhgKt6cDPAH3=1667231887099> 

[12]<https://www.yicai.com/news/101578109.html> 

[13]<https://www.chinatimes.net.cn/article/121754.html> 

[14]<https://mp.weixin.qq.com/s/UB55qSu592bdwecWkGtNRw?scene=25#wechat_redirect <https://mp.weixin.qq.com/s/UB55qSu592bdwecWkGtNRw?scene=25> 

[15]<https://www.spp.gov.cn/xwfbh/wsfbt/202210/t20221015_589129.shtml#1 <https://www.spp.gov.cn/xwfbh/wsfbt/202210/t20221015_589129.shtml> 

[16]<https://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=43JN2gLEV9jUHUkvyMwbDfIGpKslaU3csRCIJMJ/L4tu7Nz0bAo8lp/dgBYosE2gHF2/4lMNkWhsWFhbkHSAUrhOGAIn7RxGBOOhicGUizVmnR9+Y7KOOhwtx0SZo405> 

[17]<https://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=8yAVlAKarxbtUSdP8kVH8Fhv4cPBmZqG0WHHmpqrdwJtuHi36JoO0J/dgBYosE2gHF2/4lMNkWhsWFhbkHSAUrhOGAIn7RxGBOOhicGUizW270MBzLOwEx2xCCB9jU6G>  

[18]<https://mp.weixin.qq.com/s/d3g-sNGYKoq1yGKsv9UXjA?scene=25#wechat_redirect <https://mp.weixin.qq.com/s/d3g-sNGYKoq1yGKsv9UXjA?scene=25> 

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

Editor: IPR Daily-Ann