China: Chinese Supreme People’s Court Sets Framework For Antitrust Litigation

Last Updated: 14 May 2012
Article by Peter Wang and Yizhe Zhang

The Chinese Supreme People's Court ("SPC") has promulgated final Rules on Civil Litigation under the Anti-Monopoly Law ("AML") (the "Rules"), which will become effective on June 1, 2012.  These Rules set out the framework for civil antitrust litigation in China.  The implementation of these new rules and the advantages they give plaintiffs will accelerate the growth of private antitrust litigation in China.

The final Rules come more than a year after publication by the SPC of a draft for comments.  (see our May 2011 Alert, China's Supreme Court to Set Framework for Antitrust Litigation.) It appears that the SPC considered many of the comments submitted on the draft, as well as other significant developments in the anti-monopoly area over the past year, such as some noteworthy civil AML lawsuits and high-profile non-merger investigations by Chinese antitrust regulators. However, many of the provisions in the final Rules remain essentially unchanged from the 2011 draft, including those related to jurisdiction, statute of limitations, and the scope of the possible compensation for victims of monopoly conduct.

It is noteworthy that provisions in the draft relating to a "passing on" defense and providing special rules for (limited) discovery in AML cases were deleted from the final Rules.  Moreover, the final Rules make provision for lower-level (i.e., basic) people's courts to hear AML civil suits upon the SPC's approval, rather than limiting jurisdiction only to the intermediate courts.  These changes may make AML cases more accessible to smaller plaintiffs, but at the same time have removed specialized procedures for obtaining information in AML cases that might have alleviated some of the usual difficulties involved in evidence-gathering in PRC civil litigation.

Some other important changes compared to the April 2011 draft are summarized below:

Eligible plaintiff.  The final version may expand who may bring antimonopoly actions.

The 2011 draft allowed only persons "injured by the alleged monopoly conduct" to lodge antimonopoly suits in the courts, while the final Rules also contemplate suits based on "violation of the AML arising out of contract or articles of associations of industry associations."  The latter categories, AML suits arising from contracts or industry association rules, possibly may lack an independent requirement of antitrust injury, thus permitting plaintiffs to sue when they have not suffered injury and thus cannot recover damages.

Horizontal agreements.  The burdens of proof in horizontal monopoly agreements cases are more difficult for defendants than in other jurisdictions.

For most categories of prohibited horizontal monopoly agreements, set forth in articles 13(1) to 13(5) of the AML, the final Rules make clear that defendants bear the burden to prove that any such agreements – once proven to exist, presumably by plaintiffs – will not have anticompetitive effects.  In contrast, the 2011 draft provided for burden-shifting (with regard to anticompetitive effects) from defendants to plaintiffs in cases involving such prohibited horizontal agreements.  There remains some concern that placing this burden squarely on defendants in all article 13 horizontal agreement cases may be overbroad.  Although most of these agreements are "hard core" cartel behavior that would be per se illegal (i.e., not requiring proof of anticompetitive effects) in most other jurisdictions, article 13 also covers some potentially non-hard-core agreements – "restricting the purchase of new technology or new equipment, or restricting the development of new technology or new products" – that likely would be treated under the rule of reason in the United States and elsewhere.  Finally, for suits involving other violations of the AML, the final Rules omit language from the 2011 draft that "plaintiffs shall bear the burden of proof that  the agreement in suit has the effect of eliminating or restricting competition," instead leaving the burden of proof unspecified although presumably remaining with the plaintiffs.

Abuse of dominance.  Although plaintiffs alleging abuse of dominant market position bear the burden to prove both the existence of a dominant position and its abuse by a defendant, the final Rules also provide that "information published by the defendant may be used as evidence of dominance unless otherwise proved."  This replaces a more complicated provision in the draft 2011 rules providing that information published by defendants, along with other public information, could constitute prima facie evidence sufficient to shift the burden of proof from plaintiffs to defendants.

Companies therefore will need to be careful about their public statements about market position, understanding that stray comments about their competitive strength, although perhaps useful from a commercial point of view, may be held against them in court.

The final Rules also have omitted many details relating to presumptions of dominance of public utility companies and other entities with legally supported monopolies, although they still appear to provide that such companies may be found to be dominant simply based upon market structure and/or competitive dynamics, if the defendants cannot prove otherwise.

It is also important to note that the AML presumes that a company with a market share greater than 50 percent is dominant, subject to rebuttal by defendants.


Private antitrust litigation is on the rise in China. According to the SPC's press release, 61 antitrust cases have been filed since the AML took effect, 53 of which have been concluded.  These have covered a wide spectrum of industries, including transportation, pharmaceutical, food, home electric application, and IT.  The new Rules are likely to have the effect of accelerating the pace of antitrust litigation, as courts now have a framework to accept and adjudicate anti-monopoly lawsuits.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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