Antitrust
Legislation
China and Other 14 Countries Sign Regional Comprehensive Economic Partnership Agreement, Competition Policy Included
On 15 November 2020, the Trade Ministers of 15 countries signed the Regional Comprehensive Economic Partnership ("RCEP") Agreement. Chapter XIII of the Agreement sets out the competition policy of the free trade area, which includes, inter alia, objectives, basic principles, measures against anti-competitive activities, cooperation between competition enforcement agencies, exchange of confidential information, technical cooperation and capacity building, consumer protection, consultations and non-application of dispute settlement provisions.1
SAMR Issues the Anti-Monopoly Guideline for the Platform Economy Industry (Draft for Comments)
On 10 November, the State Administration for Market Regulation ("SAMR") issued the Anti-Monopoly Guideline for the Platform Economy Industry (Draft for Comments), covering new issues such as anti-monopoly notification of transactions that involve VIE-structured undertakings, monopoly agreements in the Internet sector such as algorithmic collusion/MFN clauses, abuse of dominant market position such as the widely criticized practice of "exclusive choosing", and the definition of "essential facilities". 2
SAMR Issues Official Interpretation of Five Anti-Monopoly Guidelines Regarding Intellectual Property, Automotive Industry, Leniency Program, Commitment, and Compliance
On 30 October, SAMR issued official interpretations of five anti-monopoly guidelines, including the Anti-Monopoly Guidelines on Intellectual Property Rights, the Anti-Monopoly Guidelines for the Automobile Industry, the Guidelines on Application of Leniency Program in Horizontal Monopoly Agreement Cases, the Guidelines on Undertakings' Commitments in Anti-Monopoly Cases, and the Anti-Monopoly Compliance Guide for Undertakings. 3
Authorities
SAMR, CAC, and State Taxation Administration Jointly Hold an Administrative Instructing Meeting on Regulating the Online Economy
On 6 November 2020, SAMR, Cyberspace Administration of China ("CAC"), and State Taxation Administration jointly held an administrative instructing meeting on regulating the online economic order. The meeting pointed out that the platform is not land beyond antitrust regulation, and proposed that the regulation of online platform monopoly and other illegal activities should be persistently promoted. 4
The Director of Consumer Rights and Interests Protection Bureau of CBIRC Says that the
Enforcement of AML and Anti-Unfair Competition Law should be Strengthened/p>
On 2 November, the director of Consumer Rights and Interests Protection Bureau of China Banking and Insurance Regulatory Commission ("CBIRC") published an article on 21st Century Business Herald, saying that enforcement of China's Anti-Monopoly Law ("AML") and Anti-Unfair Competition Law should be strengthened in order to prevent situations such as winner-takes-all and big-shop-bullies-customers, undermining consumer's right of choice and right of fair trade.5
Public Enforcement
Zhejiang AMR Fines Wepon Pharmaceutical Group CNY 2.47 Million for Abuse of Dominance
On 3 November, the Zhejiang Province's Administration for Market Regulation ("AMR") made an administrative penalty decision against Zhejiang Pharmaceutical Sales Co., Ltd. of Wepon Pharmaceutical Group for it had abused dominant market position in the Bromhexine Hydrochloride API market by attaching unreasonable trading conditions, i.e. requiring drug manufacturers to deliver all bromhexine hydrochloride injections produced by the parties to it for sale. The Zhejiang AMR decided to confiscate its illegal income of CNY 232,205.11, and to impose a fine of 3E of its 2019 sales of CNY 224,1753.58, for a total fine of CNY 2,473,958.69.6
Anhui AMR Fines 4 Driver Schools CNY 1.438 Million for Engaging in Monopoly Agreements
On 2 November, Anhui AMR fined Dingyuan Driver Training Branch of Anhui Transportation Group Chuzhou Auto Transportation and other 3 driver schools CNY 1.438 million as it determined that the 4 driver schools have reached and implemented an agreement that fixed the charging standard of their driver training services. 7
Zhejiang AMR Investigates and Punishes 5 Auto Trading Service Providers for Engaging in Monopoly Agreements, the Organizer Fined over CNY 2.7 Million
On 2 November, Zhejiang AMR issued penalty decisions to 5 auto trading service providers in Huzhou, Zhejiang, for reaching and implementing agreements that fixed the price of auto trading services. The organizer of the activity was confiscated CNY 2,238,148.83 and fined CNY 464,730.4, which is 5E of its annual sales in 2019, totaling CNY 2,702,879,23.8
Zhejiang AMR Fines Jiangshan City Funeral Parlor of Zhejiang over CNY 730,000 for Abusing Dominant Market Position
On 22 October, Zhejiang AMR issued a penalty decision to Jiangshan City Funeral Parlor of Zhejiang. The institution has forced the bereaved trading counterparts to buy cremation urns in exchange for punctual cremation service. It was confiscated CNY 86,624 in illicit gains and fined CNY 651,222, which is 6E of its annual sales in 2019, totaling CNY 737,746.9
Merger Control
SAMR Releases 32 Simple Cases for Merger Control Review in November
Up to 30 November 2020, SAMR has released 34 simple cases in November on its websites. 10
SAMR Issues Penalty Decisions on 2 Gun Jumping Cases
On 23 November, SAMR issued a penalty decision on a case involving Jiangsu Yueda Investment and Beijing Changjiu Logistics for establishing a joint venture Jiangsu Yueda Changjiu Logistics without notifying the regulator. Each party was fined CNY 300,000 respectively. 11 On 10 November, SAMR issue a penalty decision against ANE Fast Logistics (Hong Kong) Limited ("ANE") for its acquisition of 100E shares in Changshan Giantruck Fleet Supply Chain Management without notifying the regulator. ANE was fined CNY 300,000. 12
SAMR Accepts a Case for Merger Control Review that Involves VIE Structure
On 25 November, SAMR announced the acquisition of shares in China Auto Rental by MBK Partners. According to the 2019 annual report of China Auto Rental, it has a VIE structure.13
Courts Litigation
Beijing High Court Examines Evidence in JD v. Alibaba, A Dispute over Exclusive Dealing
From 24 to 26 November 2020, Beijing Municipal High People's Court ("Beijing High Court") has scheduled a non-public evidence examination tied to JD v. Alibaba. JD.com has previously filed a lawsuit against its rival Alibaba, claiming that it has abused its dominant market position in the B2C online retail platform market by imposing a "choose one from two" policy, which constitutes exclusive dealing, a form of abuse of dominant market position.14
From 24 to 26 November 2020, Beijing Municipal High People's Court ("Beijing High Court") has scheduled a non-public evidence examination tied to JD v. Alibaba. JD.com has previously filed a lawsuit against its rival Alibaba, claiming that it has abused its dominant market position in the B2C online retail platform market by imposing a "choose one from two" policy, which constitutes exclusive dealing, a form of abuse of dominant market position.14
On 20 November, a civil ruling was published on China Judgement Online. The ruling dismissed the claims made by Kangjian Miaomiao (Hangzhou) Pharmaceuticals ("Kangjian Miaomiao Pharmaceuticals"), an E-commerce platform operator, that Dentsply (Tianjin) International Trade, a dental instrument manufacturer, has implemented vertical monopoly, saying that the vertical monopoly agreement was not successfully established. 15
On 20 November, a civil ruling was published on China Judgement Online. The ruling dismissed the claims made by Kangjian Miaomiao (Hangzhou) Pharmaceuticals ("Kangjian Miaomiao Pharmaceuticals"), an E-commerce platform operator, that Dentsply (Tianjin) International Trade, a dental instrument manufacturer, has implemented vertical monopoly, saying that the vertical monopoly agreement was not successfully established. 15
On 12 November, an administrative ruling was published on China Judgements Online. The ruling says that Yunyang County Yongwang Building Materials ("Yongwang Building Materials") has filed an administrative lawsuit challenging a CNY 373,538.85 penalty against it made previously by Chongqing AMR. The challenge was dismissed by Yubei District People's Court.16
Academia
Expert Revision Proposal and Detailed Explanation to Anti-Monopoly Law of People's Republic of China Edited by Professor Shi Jianzhong Published
Recently, the Expert Revision Proposal and Detailed Explanation to Anti-Monopoly Law of the People's Republic of China edited by Professor Shi Jianzhong is published by China University of Political Science and Law Press. The authors made a clear comparison between current provisions and the proposed revision, with detailed explanations attached along with reasons for such revisions; the authors also consulted the legislation and legal practices in other jurisdictions.17
Dentons Team
Seminar on "Interpreting the Implementation of AML from a Practical Perspective – Innovtion and New Trends" Held in Beijing
On 5 November 2020, Dentons Beijing office held the in-person seminar on "Interpreting the Implementation of AML from a Practical Perspective - Innovation and New Trends" in Beijing. Senior Partner Jet Deng from Dentons Beijing office, Partner Ken Dai from Dentons Shanghai office, and other lawyers spoke on and discussed topics including the revision of the AML, the five guidelines for anti-monopoly, merger control reviews that involve VIE structure, and anti-monopoly litigation.
Data Protection
Legislation
Information Security Technology - Guidance for Personal Information Security Impact Assessment Officially Released
On 25 November 2020, the National Information Security Standardization Technical Committee officially release the Information Security Technology – Guidance for Personal Information Security Impact Assessment (GB/T 39335-2020), with effect on 1 June 2021. This guidance will effectively support the implementation of Article 54 of the Personal Information Protection Law (Draft), which concerns the personal information processors conducting risk assessments. 18
On 25 November 2020, the National Information Security Standardization Technical Committee officially release the Information Security Technology – Guidance for Personal Information Security Impact Assessment (GB/T 39335-2020), with effect on 1 June 2021. This guidance will effectively support the implementation of Article 54 of the Personal Information Protection Law (Draft), which concerns the personal information processors conducting risk assessments. 18
On 15 November, the Trade Ministers of 15 countries signed the Regional Comprehensive Economic Partnership ("RCEP") Agreement. Chapter XII of the Agreement sets out rules for cross-border data flow, aiming to protect consumers' personal information security while promoting cross-border trade. Cross-border data flow is also addressed in other chapters, including the one on financial services.19
Information Security Technology - Guide for Data Security of Online Car-booking Services (Draft for Comments) Officially Released
On 10 November, the National Information Security Standardization Technical Committee officially release the Information Security Technology - Guide for Data Security of Online Car-booking Services (Draft for Comments), soliciting comments until 8 January 2021. The standard will provide strong support for protecting the data security of online car-booking services and the personal information security of the general public. 20
CBIRC and People's Bank of China Jointly Issues Interim Measures for the Administration of Online Microfinance Business (Draft for Comments)
On 2 November, China Banking and Insurance Regulatory Commission ("CBIRC") and People's Bank of China jointly issued the Interim Measures for the Administration of Online Microfinance Business (Draft for Comments), putting forward compliance requirements with regards to the security of the business systems of the microfinance businesses and personal information protection.21
Enforcement Cases
Guangdong Communications Administration Reports 88 Apps with Issues Including Illegally Collecting Personal Information
On 23 November 2020, Guangdong Communications Administration reported 88 problematic apps. The issues exist in two aspects: firstly, there are data security risks in the apps and their backend servers; secondly, they violate the rules on users' personal information, infringing users' rights to know and decide on the handling of their personal information, as well as violating the principle of minimum and necessary by demanding permissions or collecting information in advance, in excess of needs and on a frequent basis, and even prevent users from using if permissions are not given as required. 22
Shanghai Cyberspace Administration Meets with YTO Express, Requesting Measures to be Adopted against the Previous Leak of 400,000 Pieces of Personal Information
On 19 November, Shanghai's Cyberspace Administration, along with Qingpu District's Cyber Administration, Public Security Bureau, Commission of Commerce, and Post Bureau, met with YTO Express to address the previous leak of 400,000 personal information. YTO Express was ordered to seriously deal with incidents of employee indiscipline violations, ensure information symmetry, timely disclosure and positive response, and establish a system for managing waybill data.23
CAC Reports 35 Apps with Issues Regarding Personal Information Collection and Use
On 13 November, Working Group for Regulating Illegal Collection and Use of Personal Information of Apps reported 35 apps with issues regarding personal information collection and use, suggesting that the relevant operators should rectify the problems in a timely manner and report back to the working group within 30 days on the status of rectification. 24
MIIT Removes 60 Apps that Infringe Users' Rights and Interests without Rectification
On 9 November, the Ministry of Industry and Information Technology ("MIIT") required relevant application stores to remove 60 apps that infringe users' rights and interests. These apps were previously reported by the MIIT but did not rectify the problems as required in a timely manner.25
Courts Litigation
The Court Delivers Judgement over China's First Case on Facial Recognition Involving Hangzhou Safari Park, Ordering Deletion of the Plaintiff's Facial Feature Information
On 20 November 2020, Hangzhou Fuyang District People's Court of Zhejiang delivered judgement over contractual lawsuit of Guo Bing v. Hangzhou Safari Park ("Safari Park"). The court ruled that the Defendant "collected facial recognition information, exceeding the principle of necessity, therefore was not justified," ordering the Safari Park to compensates Guo Bing CNY 1,038 and delete facial feature information of Guo Bing – including the photos- which was submitted when applying for the annual card. It rejected Guo Bing's other claims, including the request to confirm the invalidity of the Safari Park's shop notice and text message notice, as well as the allegation of fraud. The Plaintiff said he will appeal against the decision. 26
Dentons Team
Seminar on "Understanding the Personal Information Protection Law (Draft) from Academic and Practical Perspective" Held in Beijing
On 6 November 2020, to assist enterprises in understanding the Personal Information Protection Law (Draft) and the subsequent challenges with regards to compliance issue, Dentons Beijing office held the in-person seminar "Understanding the Personal Information Protection Law (Draft) from Academic and Practical Perspective" in Beijing. The speakers included Associate Professor Xu Ke, the Executive Director of the Center for Digital Economy and Legal Innovation at the University of International Business and Economics, Senior Partner Jet Deng from Dentons Beijing office and Partner Ken Dai from Dentons Shanghai office. More than 50 corporate representatives and people from the media attended the seminar. The speakers shared their views on the main controversy during the legislative process, the main business scenarios, and the comparison with GDPR.27
Footnotes
1 https://www.mofa.go.jp/files/100114853.pdf
2 http://www.samr.gov.cn/hd/zjdc/202011/t20201109_323234.html
4 http://www.samr.gov.cn/xw/zj/202011/t20201106_323156.html
4 http://www.samr.gov.cn/xw/zj/202011/t20201106_323156.html
5 https://m.21jingji.com/article/20201102/herald/62dfca7696f0148a9353a88dbd9eedf5.html
6 http://www.samr.gov.cn/fldj/tzgg/xzcf/202011/t20201117_323624.html
7 http://www.samr.gov.cn/fldj/tzgg/xzcf/202011/t20201124_323848.html
8 http://www.samr.gov.cn/fldj/tzgg/xzcf/202011/t20201105_323025.html
9 http://www.samr.gov.cn/fldj/tzgg/xzcf/202011/P020201109631493694914.docx
10 http://www.samr.gov.cn/fldj/ajgs/jzjyajgs/index.html
11 http://www.samr.gov.cn/fldj/tzgg/xzcf/202011/t20201123_323816.html
12 http://www.samr.gov.cn/fldj/tzgg/xzcf/202011/W020201110554744385456.doc
13 http://www.samr.gov.cn/fldj/ajgs/jzjyajgs/202011/t20201125_323881.htm
14 http://www.legalweekly.cn/qyyf/2020-11/25/content_8365450.html
17 https://mp.weixin.qq.com/s/taRRpka9k8gM3Vm_2Wbcjw
22 https://gdca.miit.gov.cn/gdcmsnet/gdcms/content/staticViewqpath%/54/8599.html
23 https://mp.weixin.qq.com/s/Bmlnl7lpMzAx3RrJan1A_Aqscene%25#wechat_redirect
24 https://mp.weixin.qq.com/s/KGFSSM9yuIxs9Wrv2tR24wqscene%25#wechat_redirect
25 https://mp.weixin.qq.com/s/uhyRsgRb0-WBz9BDBJ5AQgqscene%25#wechat_redirect
22 https://gdca.miit.gov.cn/gdcmsnet/gdcms/content/staticViewqpath%/54/8599.html
23 https://mp.weixin.qq.com/s/Bmlnl7lpMzAx3RrJan1A_Aqscene%25#wechat_redirect
24 https://mp.weixin.qq.com/s/KGFSSM9yuIxs9Wrv2tR24wqscene%25#wechat_redirect
25 https://mp.weixin.qq.com/s/uhyRsgRb0-WBz9BDBJ5AQgqscene%25#wechat_redirect
26 https://mp.weixin.qq.com/s/9dVYPJ77-Gwv-yC86eT0SA
27 https://mp.weixin.qq.com/s/WEgI93WDebTmlcjFB7NnUQ
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