China: China Monthly Antitrust Update - July 2023

Legislation

SAMR Seeks Comments on Antitrust Guidelines in the Field of Standard Essential Patents (Draft for Comments)

On June 30, 2023, in order to prevent operators from abusing standard-essential patents to exclude and restrict competition, protect fair competition in the market, promote the synergistic development of intellectual property rights and standardization, encourage innovation, and protect the rights and interests of consumers and the public interest of society, the State Administration for Market Regulation ("SAMR") has drafted the Antitrust Guidelines on the Field of Standard Essential Patents (Draft for Comments), which is open for public comments. ¹

Shanghai AMR Seeks Comments on Competition Compliance Evaluation Guidelines for Internet Platform Companies (Draft for Comments)

On June 30, in order to strengthen the Internet platform enterprises' management of competition compliance, enhance the level of Internet platform enterprises' normalized supervision of antitrust compliance, coordinate appropriate regulation and development promotion, and promote the sustainable and healthy development of Internet platform enterprises, the Shanghai Administration for Market Regulation ("AMR") has formulated the Competition Compliance Evaluation Guidelines for Internet Platform Companies (Draft for Comments), which is open for public comments. ²

Hainan AMR Seeks Comments on Antimonopoly Compliance Guidelines for Public Enterprises of Hainan Province (Draft for Comments)

On June 30, in order to guide public enterprises to strengthen anti-monopoly compliance management, safeguard the sustainable and healthy development of enterprises, protect the rights and interests of consumers and the public interest of society, and strengthen the implementation of fair competition policy, the Hainan AMR has drafted the Antimonopoly Compliance Guidelines for Public Enterprises of Hainan Province (Draft for Comments), which is open for public comments. ³

SAMR Issues Provisions on Prohibiting the Abuse of Intellectual Property Rights to Exclude or Restrict Competition

On June 29, the SAMR issued the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Exclude or Restrict Competition to support the Anti-Monopoly Law, which will come into effect on August 1, 2023. ⁴

SAMR Seeks Comments on Antitrust Compliance Guidelines for Concentration of Undertakings (Draft for Comments)

On June 19, in order to guide operators to implement the responsibility of anti-monopoly compliance for concentration of undertakings, improve the awareness and management level of anti-monopoly compliance for concentration of undertakings, and promote the sustainable and healthy development of operators, the SAMR has researched and drafted the Antitrust Compliance Guidelines for Concentration of Undertakings (Draft for Comments), which is open for public comments. ⁵

Hainan Province Issues Guidelines for Fair Competition Review in Investment Promotion and Government-Enterprise Cooperation

On June 13, Hainan Province issued the Guidelines for Fair Competition Review in Investment Promotion of Hainan Free Trade Port Fair Competition Commission(for Trial Implementation) and Guidelines for Fair Competition Review in Government-Enterprise Cooperation of Hainan Free Trade Port Fair Competition Commission (for Trial Implementation). These are Hainan's innovative initiatives to address the focus and difficulties of fair competition review in the areas of investment promotion and government-enterprise cooperation, to take the lead in the country in issuing relevant guidelines, to continuously improve the supporting policies of the unified large market infrastructure system and the fair competition review system, and to promote the transformation of industrial policy to a universal and functional one. ⁶

Heilongjiang AMR Issues Antitrust Compliance Guidelines for Platform Enterprises of Heilongjiang Province

On June 13, the Heilongjiang AMR Issued Antitrust Compliance Guidelines for Platform Enterprises in Heilongjiang Province, which came into effect from the date of issue. ⁷

Shanxi DOJ Seeks Comments on Regulations on the Promotion of Private Economic Development of Shanxi Province (Draft) with Emphasis on Fair Competition and Anti-Monopoly

On June 8, in order to promote scientific legislation and democratic legislation, enhance the openness and transparency of legislation and improve the quality of legislation, the Department of Justice ("DOJ") of Shanxi Province has studied and drafted the Regulations on the Promotion of Private Economic Development of Shanxi Province (Draft), which is open for public comments. ⁸

Legislative Work Plan 2023 of the State Council: Revising Provisions on the Notification Thresholds for Concentration of Undertakings

On June 6, the General Office of the State Council issued the State Council's legislative work plan for the year 2023, which includes the revision of the Provisions on the Notification Thresholds for Concentration of Undertakings. ⁹

Authorities

Shanghai AMR Issues First Study on Assessment of Fair Competition Environment in Yangtze River Delta Region

On June 27, 2023, the Shanghai AMR together with the AMRs of Jiangsu Province, Zhejiang Province and Anhui Province and the Executive Committee of the Demonstration Zone Of Green and Integrated Ecological Development of the Yangtze River Delta, conducted an in-depth study on the status of the regional competition environment in the process of the integrated development of the Yangtze River Delta and carried out a pilot study on the assessment of the regional fair competition environment in the Yangtze River Delta, resulting in an assessment report which was released. ¹⁰

Deputy Director of SAMR: Strengthening Antitrust Enforcement in Key Areas to Market Environment Featuring Fair Competition

From June 26 to 30, the 2nd SME International Cooperation Summit Forum was held in Guangzhou. Pu Chun, deputy director of the SAMR, said at the summit that the legal system of fair competition should be improved and antitrust enforcement in key areas should be strengthened. ¹¹

Hubei SASAC and AMR Organize Training on Anti-Monopoly Review of Concentration of Undertakings

Recently, in order to promote the implementation of the Anti-Monopoly Law in Hubei enterprises and enhance their ability to participate in the market competition according to the law, the State-owned Assets Supervision and Administration Commission ("SASAC") of Hubei Province, together with Hubei AMR, organized a training on the anti-monopoly review of the concentration of undertakings for provincial state-owned enterprises. ¹²

Exchange Activity about Beijing, Tianjin and Hebei Antitrust Enforcement and Fair Competition Review Capacity Enhancement Held in Tianjin

Recently, the exchange activity about Beijing, Tianjin and Hebei antitrust enforcement and fair competition review capacity enhancement was held in Tianjin. The AMR of 3 provinces reached a consensus on the overall promotion of regional antitrust enforcement, the gradual promotion of mutual recognition of regional fair competition review results and the joint promotion of regional talent specialization. ¹³

Guangxi Province's Liuzhou AMR Increases Enforcement against Low Price Competition and Other Issues in the River Snails Rice Noodle Industry

On June 21, the Liuzhou AMR held a meeting on promoting the high-quality development of Liuzhou's river snails rice noodle industry, proposing further strict law enforcement to provide strong support for safeguarding the high-quality development of Liuzhou's river snails rice noodle industry. ¹⁴

SAMR Holds Seminar on Promotion of Special Antitrust Enforcement Actions in Field of People's Livelihood

On June 20, a seminar on the promotion of special antitrust enforcement actions in the field of people's livelihood was held in Kunming, Yunnan Province. The meeting pointed out that since the launch of the special action, all localities have strengthened the overall planning and organizational leadership, focused on the key issues in the field of people's livelihood, strengthened the institutional protection of the special action, expanded fair competition publicity and advocacy, and achieved obvious phased results. ¹⁵

SAMR Holds Meeting on Anti-Monopoly Administrative Guidance in Pharmaceutical Industry

On June 15, the SAMR held a meeting on anti-monopoly administrative guidance in the pharmaceutical industry. Representatives from the China Pharmaceutical Industry Association, the China Society for Drug Regulation and some API manufacturing enterprises and preparation enterprises attended the meeting. The meeting requested that pharmaceutical enterprises should give full play to the deterrence effect of typical monopoly cases in the pharmaceutical field, pay great attention to their possible anti-monopoly compliance issues, effectively enhance their sense of responsibility, adhere to lawful and compliant operation, and strive to be the demonstrators and leaders of fair competition in the market. ¹⁶

SAMR Issues 2023 Overview on Phased Results of Special Anti-Monopoly Enforcement Actions in Field of People's Livelihood

On June 5, China Market Regulation News published an article entitled "Quenching and Sharpening Sword against Monopoly to Protect Development and Benefit People's Livelihood - Overview of Phased Results of Special Anti-Monopoly Enforcement Action in Field of People's Livelihood in 2023". ¹⁷

SAMR: Positive Results Achieved in Breaking Down Administrative Monopolies, and Formulation of Regulation on Fair Competition Review Accelerated

On June 5, the State Council policy briefing on building a national unified market was held at the State Council Information Office. Jianqiao Zhu, director of the Department of Comprehensive Planning of the SAMR, introduced the situation of building a national unified market, saying that positive results have been achieved in breaking down administrative monopolies and that the formulation of the Regulation on Fair Competition Review will be accelerated. ¹⁸

Public Enforcement

Administrative Monopoly Behavior of Yibin Gongxian Housing, Urban-Rural Development and Township Management Bureau Corrected by Sichuan AMR

On June 21, 2023, the Sichuan AMR issued an announcement stating that it corrected the Yibin Gongxian Housing, Urban-Rural Development and Township Management Bureau's abuse of administrative power to exclude and restrict competition ("Administrative Monopoly"). According to the announcement, the Sichuan AMR filed the case and investigated the Yibin Gongxian Housing, Urban-Rural Development and Township Management Bureau for suspected Administrative Monopoly behavior on July 1, 2022. ¹⁹

Administrative Monopoly Behavior of Dingnan County Urban Management Bureau Corrected by Jiangxi AMR

On June 20, the SAMR issued an announcement stating that the Jiangxi AMR corrected the Administrative Monopoly behavior of Dingnan County Urban Management Bureau. According to the announcement, the Jiangxi AMR filed the case and investigated the Dingnan County Urban Management Bureau for suspected Administrative Monopoly behavior on April 7, 2023. ²⁰

Administrative Monopoly Behavior of Urumqi Construction Bureau Corrected by Xinjiang AMR

On June 19, the Xinjiang AMR issued an announcement stating that it corrected the Administrative Monopoly behavior of Urumqi Construction Bureau. According to the announcement, the Xinjiang AMR filed the case and investigated the Urumqi Construction Bureau for suspected Administrative Monopoly behavior on April 2022. ²¹

8 Insurance Companies Fined RMB 11.51 Million by Chongqing AMR for Monopoly Agreement

On June 19, the SAMR issued an announcement stating that the Chongqing AMR imposed an administrative penalty on 8 insurance companies for reaching and implementing monopoly agreement. The aggregated fines and confiscations were about RMB 11.51 million. ²²

SAMR Issues 13 Typical Cases of Special Antitrust Enforcement Actions in Field of People's Livelihood, with Fines of Nearly RMB 700 Million

On June 2, the SAMR issued the first batch of typical cases of special antitrust enforcement actions in the field of people's livelihood, with 13 cases fined a total of nearly RMB 700 million. ²³

Shanghai Xudong Haipu Pharmaceutical and Tianjin Tianyao Pharmaceuticals Fined RMB 57.05 Million by Shanghai AMR for Monopoly Agreement

On June 2, the SAMR issued an announcement stating that the Shanghai AMR imposed an administrative penalty on Shanghai Xudong Haipu Pharmaceutical Co., Ltd. and Tianjin Tianyao Pharmaceuticals Technology Co., Ltd. for reaching and implementing monopoly agreement. The total fine was about RMB 57.05 million. ²⁴

Chengdu Engineering Cost Association Fined RMB 300 Thousand by Sichuan AMR for Monopoly Agreement

On June 2, the SAMR issued an announcement stating that the Sichuan AMR imposed an administrative penalty on Chengdu Engineering Cost Association for organizing its members to reach monopoly agreement. The total fine was RMB 300 thousand. ²⁵

Fujian Society of Explosives and Blasting and 3 Member Companies Fined RMB 1 Million by Fujian AMR for Monopoly Agreement

On June 2, the SAMR issued an announcement stating that the Fujian AMR imposed an administrative penalty on Fujian Society of Explosives and Blasting and 3 member companies for reaching monopoly agreement. The total fine was RMB 1 million. ²⁶

Huaneng Rizhao Heat Energy Fined RMB 4.25 Million by Shandong AMR for Abusing Dominant Market Position

On June 2, the SAMR issued an announcement stating that the Shandong AMR imposed an administrative penalty on Huaneng Rizhao Heat Energy Co., Ltd. for abusing dominant market position. The total fine was about RMB 4.25 million. ²⁷

Nanjing Zhongran Urban Fuel Development Fined RMB 40.50 Million by Jiangsu AMR for Abusing Dominant Market Position

On June 2, the SAMR issued an announcement stating that the Jiangsu AMR imposed an administrative penalty on Nanjing Zhongran Urban Fuel Development Co., Ltd. for abusing dominant market position. The total fine was about RMB 40.50 million. ²⁸

Concentration of Undertakings

Restrictive Conditions for Concentration of Undertakings for Marubeni's Acquisition of 100% of Gavilon Holdings' Equity Lifted by SAMR

On June 25, 2023, the SAMR issued an announcement stating that it lifted the restrictive conditions for concentration of undertakings for Marubeni's acquisition of 100% of Gavilon Holdings, LLC 's equity. ²⁹

Courts Litigation

SPC Rejects Antitrust First Instance Decision Awarding Yangtze River Pharmaceuticals RMB 68 Million in Damages: No Dominance Abuse

On May 25, 2023, the Supreme People's Court ("SPC") handed down its second instance judgment in a monopoly dispute between Yangtze River Pharmaceuticals and Hefei Medical and Pharmaceutical Co., Ltd., finding that the conduct complained did not constitute abusing dominant market position, thus reversing the first instance judgment which awarded Yangtze River Pharmaceuticals RMB 68 million in damages and dismissing all of Yangtze River Pharmaceuticals' claims. In its judgment, the SPC focused on the following legal issues: (i) the consideration of indirect competition constraints from the downstream market in determining the market dominance of intermediate input operators; (ii) the relevance of the market blocking effect of the limited trading practice and the exercise of patent rights; (iii) the basic considerations for the determination and regulation of unfairly high prices; and (iv) the basic considerations for the determination and regulation of the practice of imposing unreasonable trading conditions. ³⁰

SPC Issues Regulation on Reply to Requests for Instructions on Application of Law, Courts of First Instance may Request SPC for Instructions on Application of Anti-Monopoly Law

On June 6, the SPC issued Regulation on Reply to Requests for Instructions on Application of Law. According to the regulation, the court of first instance may ask the SPC for instructions on the application of the Anti-Monopoly Law. ³¹

Academia

Professor Xianlin Wang Interpretates Provisions Against Abusing Intellectual Property Rights to Exclude or Restrict Competition

On June 29, 2023, China Economic Network published an article on the interpretation of the Provisions Against Abusing Intellectual Property Rights to Exclude or Restrict Competition by Xianlin Wang, an expert from the Expert Advisory Group of the Anti-Monopoly Committee of the State Council and a professor from Shanghai Jiaotong University. ³²

Footnotes

1. https://www.samr.gov.cn/hd/zjdc/art/2023/art_6422b2fb728f486b9814349213ea07c6.html

2. https://mp.weixin.qq.com/s/09DGu4SLivGMXwyfEWCVrg

3. https://amr.hainan.gov.cn/hd/zjdc/202306/t20230630_3444589.html

4. https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2023/art_e155397fbe5c4c05ad3c1838c1322ad2.html

5. https://www.samr.gov.cn/fldys/tzgg/zqyjgg/art/2023/art_9dc4258c45f74af0aa3624a7b8e4d4ca.html

6. https://amr.hainan.gov.cn/yw/gzdt/202306/t20230616_3436952.html

7. http://amr.hlj.gov.cn/amr/c103774/202306/c00_31640390.shtml

8. http://sft.shanxi.gov.cn/zwyw_20182/tzgg/202306/t20230608_8703759.html

9. https://www.gov.cn/zhengce/content/202306/content_6884925.htm

10. https://mp.weixin.qq.com/s/S_QHBjkBVNuadbi7_Bo7UA?scene=25#wechat_redirect

11. https://www.bjnews.com.cn/detail/1687913232129364.html

12. http://www.sasac.gov.cn/n4470048/n16518962/n20648677/n20648717/c28242028/content.html

13. https://scjg.tj.gov.cn/tjsscjdglwyh_52651/xwdt/gzdt/202306/t20230625_6329987.html

14. https://mp.weixin.qq.com/s/WK06Lcp7SLe1M3lL0xh7CQ?scene=25#wechat_redirect

15. https://www.samr.gov.cn/xw/zj/art/2023/art_c2b155109d124715bfb827094316f23d.html

16. https://www.samr.gov.cn/xw/zj/art/2023/art_b7dfb09c73354cc9942f36ea4e6a3b73.html

17. https://www.samr.gov.cn/fldys/sjdt/gzdt/art/2023/art_a95c7933ece84aa99010002dc8416cce.html

18. http://www.scio.gov.cn/32344/32345/49553/49988/tw49990/Document/1742258/1742258.htm

19. http://scjgj.sc.gov.cn/scjgj/xxcf/2023/6/21/33e0b766327c478182f5ddea926eb2ea.shtml

20. https://www.samr.gov.cn/jzxts/tzgg/qlpc/art/2023/art_8afeb16ae95f4dfb8604eba6bf9bae69.html

21. http://www.xjaic.gov.cn/xjaic/tzgg/202306/6bfc5c21e55b46e19503ec1d964d5c12.shtml

22. https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2023/art_87d7926eee734eba871d30fb5f401534.html

23. https://www.samr.gov.cn/xw/zj/art/2023/art_9590c83509dd448cb2385a2459661715.html

24. https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2023/art_1a0affa78f854083b1f64d59ccf78e61.html

25. https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2023/art_e26807d45f42400ea9fc1aa4505a5a7b.html

26. https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2023/art_ee689f373f0641efa545e5fb7147b08c.html

27. https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2023/art_24c190f8826e4c7a84f69d735e816894.html

28. https://www.samr.gov.cn/fldys/tzgg/xzcf/art/2023/art_e8d88578fe4a4464ae1442fb932009fc.html

29. https://www.samr.gov.cn/fldys/tzgg/ftj/art/2023/art_c2e0519cccbe4d63a9c203cb60a8c6b2.html

30. https://mp.weixin.qq.com/s/zo_ibtTDSufpaLya6d-piQ?scene=25#wechat_redirect

31. https://www.court.gov.cn/fabu/xiangqing/402522.html

32. http://www.ce.cn/cysc/zljd/yqhz/202306/29/t20230629_38610603.shtml

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