China Monthly Antitrust Update: May 2023

Legislation

SAMR Deploys Key Legislation This Year: Promoting Formulation of Regulations on Fair Competition Review

On April 11, 2023, State Administration for Market Regulation (“SAMR”) deployed key legislative tasks for 2023 to strengthen the rule of law in market regulation. In identifying the key legislative tasks, SAMR stressed that it should thoroughly implement the fair competition policy, continuously optimize the fair competition environment, actively promote the formulation of the Regulations on Fair Competition Review, and revise theProvisions on Prohibition of Abuse of Intellectual Property Rights to Exclude and Restrict Competitionand other regulations. [1]

Hainan AMR Seeks Public Comments on Special Guidelines for Fair Competition Review in Key Areas

On April 7, in order to further standardize and improve the fair competition review in key areas such as investment attraction and government-enterprise cooperation in Hainan province, enhance the scientific and reasonable nature of the review and optimize the business environment of Hainan Free Trade Port, Hainan Administration for Market Regulation (“AMR”) has drafted theGuidelines for Fair Competition Review on Investment Attractions (Draft for Comments)and theGuidelines for Fair Competition Review on Government-Enterprise Cooperation (Draft for Comments).The draft guidelines are now open for public consultation, and valuable comments and suggestions are welcomed from relevant units and people from all walks of life. [2]

Hebei AMR Revises and Issues Anti-Monopoly Compliance Guideline for Operators in Hebei Province

On March 24, in order to protect fair competition, strengthen operators’ self-regulation of anti-monopoly conduct and safeguard the interests of consumers and the public, Hebei AMR has revised the Anti-monopoly Compliance Guidelines for Operators in Hebei Province in accordance with theAnti-monopoly Law(“AML”) of the People’s Republic of China. [3]

Shenzhen BOC Issues Shenzhen Implementation Plan to Promote Integrated Development of Domestic and Foreign Trade

On March 30, in order to thoroughly implement the spirit of the 20th Party Congress and theOffice of the State Council on Promoting the Integrated Development of Domestic and Foreign Tradeand other document requirements, and to promote the accelerated development of integration of domestic and foreign trade in Shenzhen City, combined with the actual situation in Shenzhen, Shenzhen Bureau of Commerce (“BOC”) issued theShenzhen Implementation Plan to Promote Integrated Development of Domestic and Foreign Trade. [4]

Authorities

SPP: Explore Anti-Monopoly Public Interest Litigation in Digital Markets to Prevent Monopolistic Practices incl. Abuse of Dominance and Data Algorithmic Advantages

On April 18, 2023, The Supreme People’s Procuratorate of People’s Republic of China (“SPP”) issued the Opinions on Strengthening the Cyber Rule of Law Work of Procuratorial Organs in the New Era (“Opinions”). The Opinions consist of 21 articles in 6 aspects, focusing on the important deployment of the 20th Party Congress on improving the comprehensive network governance system and combining the actual performance of procuratorial duties to put forward specific requirements for strengthening the network rule of law work of procuratorial organs in the new era in terms of network legislation, law enforcement, justice, legal knowledge propagation, as well as rule of law research and team building. [5]

Inner Mongolia Issues 3 Typical Cases of Fair Competition Review Re. Online Bicycles and Shared Bicycles

On April 18, in order to enhance the awareness of policy-making organs to maintain the national unified market and fair competition, the Office of the Inter-departmental Joint Conference on Fair Competition Review of Inner Mongolia Autonomous Region recently released three typical cases of violation of fair competition review. [6]

SAMR CPC Division Meets Secretary Bureau of ICC China National Committee

On April 14, the Competition Policy Coordination Division (“CPC Division”) of SAMR meets the personnel of the Secretary Bureau of International Chamber of Commerce (“ICC”) China National Committee with the Antitrust Enforcement Divisions I and II. The two sides exchanged views on the anti-trust legislation and enforcement work plan for 2023 and the recent work of the ICC China National Committee. [7]

Shanghai AMR and Shanghai FIC Sign Memorandum of Cooperation on Fair Competition

On April 12, the Shanghai AMR and the Shanghai Federation of Industry and Commerce (“FIC”) jointly signed the Memorandum of Cooperation on Further Promoting Fair Competition for the High-Quality Development of the Private Economy (“Memorandum of Cooperation”). The Memorandum of Cooperation focuses on two main lines of strengthening service-oriented regulation and making efforts to enhance the development of private enterprises. It specifies the establishment of five working mechanisms such as sound consultation and coordination, communication and consultation, joint guidance, joint research and feedback and collection of illegal clues. It also proposes eight specific policy measures in the respect of strengthening the fair competition review of policies and measures, continuously promoting the facilitation of registration of private enterprises, strengthening fair regulation, enhancing the governance of irregular charges related to enterprises, and strengthening the cultivation and promotion of competition culture in key areas. [8]

Public Enforcement

Two Drug Companies Fined RMB 57 Million for Chinese Market Allocation and Bid Rigging

On April 13, 2023, Shanghai AMR imposed an administrative penalty on Shanghai Xudong Haipu Pharmaceutical Co., Ltd and Tianjin Tianyi Pharmaceutical Technology Co., Ltd for their conclusion and implementation of a monopolistic agreement of “fixing or changing the price of goods” and “allocation of the sales market”. The total fine was RMB 57,055,846.09. [9]

Merger Control

SAMR Conditionally Approves Acquisition of Yantai Juli Chemical by Wanhua Chemical

On April 7, 2023, SAMR received a notification for concentration of undertakings in the case of the acquisition of equity in Yantai Juli Fine Chemical Co., Ltd by Wanhua Chemical Group Co., Ltd. After review, SAMR decided to approve this transaction with restrictive conditions. [10]

Courts Litigation

First Instance of First Anti-Monopoly Dispute Announced Publicly in Qinghai Province

On April 23, 2023, the Xining Intermediate People’s Court publicly announced the judgement of a monopoly dispute between a gas appliance company A and a gas company B. This is the first monopoly dispute in Qinghai Province accepted by the Xining Intermediate People’s Court. The Court held that the act of forcing residential users to purchase wall-hung boilers in its internal gas service department was prohibited by the AML: the act of abusing dominant market position by tying and attaching unreasonable trading conditions, and ordered company B to compensate company A for its losses. [11]

SPC Releases 2022 Annual Report Summary of Intellectual Property Cases, Incl. Trial Points of 5 Monopoly Cases

On April 23, the Supreme People’s Court (“SPC”) released a summary of its 2022 annual report on intellectual property cases, sorting out 43 issues of legal application from the intellectual property cases concluded in 2022, including six trial points from five monopoly cases. [12]

SPC：47 New Monopoly Second Trials Accepted, 57 Concluded in 2022, New Anti-Monopoly Civil Litigation Judicial Interpretation to be Introduced

On April 20, SPC held a press conference to release the State of Judicial Protection of Intellectual Property Rights in Chinese Courts (2022) as well as the top 10 intellectual property cases and 50 typical intellectual property cases in Chinese courts in 2022. At the same time, SPC said: the introduction of a new judicial interpretation of anti-monopoly civil litigation is an important work arrangement of the SPC in the field of anti-monopoly. The draft judicial interpretation was released for public comments in November last year. SPC will make an in-depth study of the relevant anti-monopoly administrative regulations recently issued, and after further revision and improvement, the judicial interpretation will be submitted to the Judicial Committee of SPC for discussion and adoption in due course before being issued. [13]

SPC Issues Key Points for Adjudication in Monopoly Cases

On March 30, in order to demonstrate the judicial philosophy, trial ideas and adjudication methods of the Intellectual Property Court of the SPC in technical intellectual property and monopoly cases, SPC selected 61 typical cases from the 3,468 cases concluded in 2022, and distilled 75 adjudication gist to form the Summary of Adjudication Gist of the Intellectual Property Court of the SPC (2022). [14]

Academia

Seminar on Anti-Monopoly and Data Security in Express Delivery Industry Held in Beijing

On April 20, 2023, A seminar on anti-monopoly and data security in the express delivery industry, hosted by the China Express Association (“CEA”), was held in Beijing. The meeting focused on market fair competition, data security and other issues for discussion. Han Ruilin, Vice President and Secretary General of CEA attended the meeting and delivered a speech. Nearly 80 people attended the meeting, including industry experts from market regulation, public security, cyberspace administration and postal services, legal scholars and in-house counsel and data leaders of major express enterprises. [15]

Analysis Event on Market Regulation Public Sentiment Case Held in Xi’an, In-depth Examination Antitrust Case of RMB 451 Million

On April 20, the Analysis Event on Market Regulation Public Sentiment Case was held in Xi’an, Shaanxi Province. The event summarized and analyzed the overall situation of public sentiment in the field of market regulation in 2022 and discussed in depth the typical case of “Shaanxi Province Cement Association and 13 enterprises fined RMB 451 million for implementing monopoly agreements”. [16]

https://mp.weixin.qq.com/s/D_nm9DGfjNWOrLQLInk67w?scene=25#wechat_redirect <https://mp.weixin.qq.com/s/D_nm9DGfjNWOrLQLInk67w?scene=25>

<https://amr.hainan.gov.cn/zw/tztg/202304/t20230407_3394381.html>

<http://scjg.hebei.gov.cn/info/94043>

<http://www.sz.gov.cn/cn/xxgk/zfxxgj/zcfg/content/post_10520328.html>

https://www.spp.gov.cn/spp/xwfbh/wsfbt/202304/t20230418_611553.shtml#1 <https://www.spp.gov.cn/spp/xwfbh/wsfbt/202304/t20230418_611553.shtml>

<http://nmg.news.cn/xwzx/2023-04/14/c_1129521334.htm>

<https://www.samr.gov.cn/jzxts/gjhz/202304/t20230417_354679.html>

<https://www.samr.gov.cn/fldys/sjdt/dfdt/202304/t20230414_354644.html>

<https://scjgj.sh.gov.cn/056/20230413/2c984ad68775404601877959d40913ce.html>

<https://www.samr.gov.cn/fldes/tzgg/ftj/202304/t20230407_354460.html>

https://mp.weixin.qq.com/s/jtVNS5wtquAxgR2pL7atDA?scene=25#wechat_redirect <https://mp.weixin.qq.com/s/jtVNS5wtquAxgR2pL7atDA?scene=25>

<https://www.court.gov.cn/zixun-xiangqing-397462.html>

https://mp.weixin.qq.com/s/WEplkZyD8IwS8tVo5_F7Jg?scene=25#wechat_redirect <https://mp.weixin.qq.com/s/WEplkZyD8IwS8tVo5_F7Jg?scene=25>

<https://ipc.court.gov.cn/zh-cn/news/view-2270.html>

<http://www.cea.org.cn/content/details_15_23769.html>

<https://www.samr.gov.cn/xwxcs/sjdt/tpxw/202304/t20230420_354752.html>