ANTITRUST
LEGISLATION
The Interim Measures for Managing Subsidies for Anti-Monopoly Work is Published, Strengthening Anti-Monopoly Enforcement Incentives on Provincial Level
On 28 January 2021, Ministry of Finance and State Administration for Market Regulation ("SAMR") published the Interim Measures on the Subsidies Management for Anti-Monopoly Work (the "Measures"). According to the Measures, subsidies for anti-monopoly work refer to the subsidies that are granted by central government via transfer payment arrangement and are specifically used to fund anti-monopoly law enforcement by the provincial administration for market regulation under the authorization of SAMR. The subsidies mainly cover the direct expense arising from such anti-monopoly law enforcement, including expenses on office, printing, conference, commissioning, traveling, training, transportation, remuneration, and the purchase of necessary law enforcement equipment.1
China to Establish Anti-Monopoly Regulation in Non-Bank Payment Industry
On 20 January, the People's Bank of China solicited feedback for the Regulation on Non-Bank Payment Institutions (Draft). The draft includes various provisions relating to anti-monopoly and fair competition. Among them, Article 55 stipulates that in cases where a non-bank payment institution's market share in the non-bank payment service market reaches one-third, the People's Bank of China may consult the anti-monopoly enforcement authority of the State Council to take measures such as interviewing the institution for early warning; Article 64 stipulates that in cases where a non-bank payment institution commits monopolistic acts, the anti-monopoly enforcement authority of the State Council, in conjunction with the People's Bank of China, shall impose penalties in accordance with the relevant laws and regulations.2
SPC Amends Judicial Interpretation on Anti-Monopoly Disputes
On 29 December 2020, Supreme People's Court ("SPC") published the Decision of Supreme People's Court on Amending Eighteen Judicial Interpretations on Intellectual Property Rights, Including Interpretations of the Supreme People's Court Concerning Certain Issues on Application of Law for Trial of Cases on Disputes over Patent Infringement (II). The amended judicial interpretations include Provisions of Supreme People's Court on Several Issues Relating to Laws Applicable for Trial of Civil Dispute Cases Arising from Monopolies, which takes effect from 1 January 2021.3
AUTHORITIES
State Council Collects Clues on Monopolization by Pseudo-Government Intermediary and Arbitrary Charging by Public Enterprises
On 26 January 2021, General Office of the State Council published an announcement to collect clues on monopolization by intermediaries leveraging administrative functions or administrative resources. These intermediaries include those that perform the tasks of inspection, testing, assessment, certification, appraisal, notary, etc. General Office also collects clues on issues such as compulsory charging and unreasonable charging by public enterprises in sectors such as water, electricity, gas, heating, commercial bank, transportation and logistics, and maritime port.4
18 Provincial People's Congresses Have Authorised Procuratorial Organs to File Public Interest Litigation Regarding Issues such as Internet Platform Monopoly
On 25 January, Zheng Xinjian, a member of the procuratorial committee of the Supreme People's Procuratorate ("SPP") and the director of the Fourth Procuratorial Office, said at a press conference that in recent years, the procuratorial organs have actively attempted to perform the task of public interest litigation to help promote cyberspace governance. By the end of 2020, 18 provincial people's congress standing committees had passed decisions or resolutions authorizing procuratorial organs to explore the practice of public interest litigation in areas related to Internet infringement of public interest and personal information protection. SPP has actively guided to strengthen the handling pf public interest litigation cases related to the protection of citizen's personal information, antitrust in internet platforms, and anti-unfair competition.5
Vice Chairperson of CBIRC Says Anti-Monopoly Move is not Aimed at Private Sector
On 22 January, Liang Tao, the vice-chairperson of the China Banking and Insurance Regulatory Commission ("CBIRC"), said at a press conference that anti-monopoly measures do not target either the private sector or specific businesses, and will not affect the normal development of relevant companies.6
The National Market Regulation Work Conference was Held in Beijing
On 18 January, the national market regulation work conference was held in Beijing. The conference pointed out the progress which has been made in several regards: that market regulators have strengthened measures against monopoly and unfair competition, regulated the competition order of online economy with multiple measures, handled a batch of typical cases concerning monopoly and unfair competition. Market authorities also promoted the establishment of a fair competition system, completed drafting proposed amendments to the Anti-Monopoly Law, issued the Anti-Monopoly Compliance Guideline for Undertakings, implemented the Fair Competition Review System, and published the anti-monopoly enforcement annual report for the first time.7
SPC Proposes to Accelerate the Improvement of Applying the Anti-Monopoly Law in the Internet and Digital Economy Areas
On 15 January, SPC issued Opinions of the Supreme People's Court on the People's Court Providing Judicial Services and Safeguard for the Construction of Hainan Free Trade Port. SPC proposed to strengthen judicial protection of intellectual property rights, building a world-class legal environment of a free trade port. Among other things, SPC will strengthen the protection of scientific innovation, strengthen the civil and criminal judicial protection of trade secrets, cease monopolistic conduct, and accelerate the improvement of applying the anti-monopoly law in the internet and digital economy sectors.8
The Central Political and Legal Work Conference Proposes Strengthening Judicial Work and Law Enforcement against Monopoly and Unfair Competition
On 10 January, the Central Political and Legal Work Conference was held in Beijing. In the conference, the Communist Party of China ("CPC") Central Committee issued the China Construction Plan for Rule of Law (2020-2025). It is mentioned in the plan to create a market-oriented, law-based, and international business environment, implement a unified negative list system for market access and remove hidden entry barriers; to clear and annul any unreasonable regulations and provisions concerning the non-public sector; and to rectify any abuse of administrative power to eliminate or restrict competition.9
SPC Proposes Strengthening Judicial Work Against Monopoly and Unfair Competition
On 10 January, SPC proposed during the national conference of presidents of high courts that Chinese courts should strengthen the judicial work against monopoly and unfair competition, conduct in-depth research on the determination of platform enterprise monopoly, administration of data collection and usage, and protection of consumer interest in the digital sector, ensure that all the resources will be utilized lawfully and equally by various market players, and create a unified, fair, and orderly market system.10
The Chief of SAMR Specifies the Direction of Anti-Monopoly Work
On 9 January, Zhang Gong, the chief of SAMR, was interviewed by Xinhua. Zhang said that SAMR would focus on key task deployed by the Central Economic Working Conference such as "strengthening anti-monopoly work and preventing capital from the disorderly expansion", fulfil its duty with regards to anti-monopoly and anti-unfair competition work, insist on placing equal emphasis on regulating the market and promoting innovation, on solving the outcome and the root cause of monopoly, and on enforcing and establishing rules, enhance its regulatory capacity, speed up improving competition governance, and endeavour to establish an environment featuring fair competition.11
5 Ministries and Commissions Jointly Issue a New Document Prohibiting Monopolization by Enterprises in Sectors such as Water, Electricity, Heating, and Gas.
On 6 January, General Office of the State Council published Opinions on Cleaning Up and Regulating Charges in the Urban Water Supply, Electricity Supply, Gas Supply, and Heating Industry to Promote the High-quality Development of the Industries. The document is jointly issued by National Development and Reform Commission, Ministry of Finance, Ministry of Housing and Urban-Rural Development, SAMR, and National Energy Administration, prohibiting unreasonable charges through compulsory service and bundled charges by enterprises in sectors such as water, electricity, gas, and heating.12
PUBLIC ENFORCEMENT
SAMR Publishes 5 Cases Concerning Horizontal Monopoly Agreement
On 29 January 2021, SAMR published the penalty decisions of 5 cases concerning horizontal monopoly agreement, respectively involving travel, insurance, fire protection, driver training, and second-hand car trading. Among them, 4 cases involved industry associations organizing the implementation of horizontal monopoly agreements.13
SAMR Fines Simcere Pharmaceutical More than CNY 100 Million for Abusing Its Market Dominance
On 29 January, SAMR published a penalty decision against Simcere Pharmaceutical Group Limited ("Simcere Pharmaceutical") for the abuse of its market dominance. Simcere Pharmaceutical has abused its market dominance in the batroxobin active pharmaceutical ingredient market through a refusal to deal without justifications. It was fined 2% of its annual sales in 2019, totalling CNY 100.7 million.14
SAMR Probing China Architectural Glass and Industrial Glass Association for Allegedly Facilitating a Monopoly Agreement
On 22 January, SAMR published an announcement, stating that it has, upon receiving a tip-off, commenced a probe into China Architectural Glass and Industrial Glass Association for allegedly facilitating a monopoly agreement among glass companies.15
AMR in Shandong Province Rectifies 2 Cases on Leveraging Administrative Power to Preclude or Restrict Market Competition
On 13 January, Shandong Provincial Administration for Marker Regulation ("AMR") published 2 cases that involve leveraging administrative power to preclude or restrict market competition, rectifying the Jining Municipal Finance Bureau's conduct concerning subsidies to bus firm and Rizhao Municipal Urban Administration Bureau's conduct of designating heat metering device provider. Both bureaus have rectified their conduct after being directed by Shandong Provincial AMR.16
Sichuan Provincial Cement Association and 5 Companies are Fined More than CNY 59.81 Million for Implementing Monopoly, while 1 Company is Exempted
On 7 January, Sichuan Provincial AMR published penalty decisions concerning monopoly agreement by undertakings in the cement industry on its website. Sichuan Provincial Cement Association was fined of CNY 500,000 for organizing monopolistic conduct; 5 cement companies were confiscated in illicit gains and fined 1% to 2% of their annual sales in 2016, totalling more than CNY 59.31 million; one company was exempted from the administrative penalty because it voluntarily reported the circumstances regarding the monopoly agreement and offered important evidence.17
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Footnotes
1. http://xzzf.mof.gov.cn/zcfbyjd/202101/t20210128_3650799.htm
2. http://www.gov.cn/hudong/2021-01/21/content_5581574.htm
3. http://www.court.gov.cn/fabu-xiangqing-282671.html
4. https://tousu.www.gov.cn/dc/sqlsf/index.htm
5. https://www.spp.gov.cn/spp/jqwlfzcz/xwfbh2020.shtml
6. http://www.scio.gov.cn/xwfbh/xwbfbh/wqfbh/44687/44808/wz44810/Document/1697478/1697478.htm
7. http://www.samr.gov.cn/xw/zj/202101/t20210118_325310.html
8. http://www.court.gov.cn/fabu-xiangqing-284531.html
9. http://www.chinapeace.gov.cn/chinapeace/c100007/2021-01/10/content_12436514.shtml
10. http://www.xinhuanet.com/legal/2021-01/11/c_1126968393.htm
11. http://www.xinhuanet.com/fortune/2021-01/09/c_1126964124.htm
12. http://www.gov.cn/zhengce/content/2021-01/06/content_5577440.htm
13. http://www.samr.gov.cn/fldj/tzgg/xzcf/
14. http://www.samr.gov.cn/fldj/tzgg/xzcf/202101/t20210129_325644.html
15. http://www.samr.gov.cn/fldj/sjdt/gzdt/202101/t20210122_325448.html
16. http://www.samr.gov.cn/fldj/tzgg/qlpc/
17. http://scjgj.sc.gov.cn/scjgj/xxcf/zfxxgk_listlist.shtml
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