China Monthly Antitrust Update: December 2023

Legislation

Liaoning Province Regulation on Promoting Fair Competition Issued

On November 15, 2023, Liaoning Province Regulation on Promoting Fair Competition (“Regulation”) was officially published by the Standing Committee of the Liaoning Provincial People’s Congress. The Regulation will be implemented starting from February 1, 2024.

The Central Commission for Comprehensively Deepening Reform: Improving the Supervision Mechanism for Natural Monopoly Networks and Preventing the Use of Monopolistic Advantages in Upstream and Downstream Competitive Areas

On November 7, the third meeting of the Central Commission for Comprehensively Deepening Reform approved the Opinions on Improving the Implementation of Supervision System and Mechanism of Natural Monopoly Networks. It was noted at the meeting that the networks and links of sectors including power, oil and natural gas, and railways have the same characters of natural monopoly industries, and they are key areas of China's state-owned economy. It is imperative to refine the supervision system, strengthen the capacity of supervision, and place emphasis on strengthening the supervision on the efforts of natural monopoly industries to implement major national strategies, plans and tasks, fulfill their duties on safeguarding national security and perform their social responsibilities, as well as the scope and actions of their operation. Such supervision should propel enterprises of national monopoly industries to focus on performing their own responsibilities and doing their own work well and increase the input of state capital into the network infrastructures, so as to improve the security and reliability of the backbone networks. Supervision should also be imposed over the monopolistic and competitive aspects of the operations of natural monopoly industries, to prevent them from extending into the upstream and downstream competitive links by taking advantage of their monopolistic status.

Liaoning Province Releases Anti-Monopoly Compliance Guidelines for Operators

On November 7, Liaoning Administration for Market Regulation (“AMR”) officially issued the provincial local standard Anti-Monopoly Compliance Guidelines for Operators (DB21/T3856-2023) (“Guidelines”). The Guidelines provides clear guidance for operators to build a risk management system for risk identification, assessment, alert, control, and arrangement throughout the whole process from compliance organizations, systems, personnel, informatization, culture, etc.

Guangdong Province Internet Platform Operator Competition Compliance Guidelines (Anti-Monopoly) Issued

On November 1, Guangdong AMR issued the Guangdong Province Internet Platform Operator Competition Compliance Guidelines (Anti-Monopoly) (“Guidelines”). The Guidelines specifies the elements of monopolistic behaviors and identifying points for sensitive operation behaviors, aimed to assist operators to clarify relevant legal risks and strengthen compliance management and precautions.

Hangzhou Releases Draft Compliance Guidelines for Live-streaming E-commerce Industry for Public Comments

Recently, the Hangzhou Municipal Judicial Bureau released Compliance Guidelines for Live-streaming E-commerce Industry (Draft) (“Draft Guidelines”) and sought public opinions. The Draft Guidelines points out that live-streaming e-commerce practitioners shall not require other operators to sign “minimum price agreements” or take other agreements, decisions or collaborative practices that exclude or eliminate competition.

Authorities

Hebei Investigated 229 Cases concerning Monopoly and Unfair Competition with 18M Fines in 2023

On November 29, 2023, the Hebei Provincial Government stated that Hebei AMR has been focused on assisting in the construction of a unified national market, maintaining a fair competition market environment, strengthening the regulation and law enforcement of anti-monopoly and anti-unfair competition, and implementing the fair competition review system. Significant results have been achieved, with 229 cases of monopoly and unfair competition investigated and handled in the Hebei province and fines totaling 17.8408 million yuan in this year.

First Antitrust Review and Compliance Counseling Center Established in Xiamen

On November 22, the Antitrust Review and Compliance Counseling Center of Maritime Silk Road Central Legal District officially began operations in the Siming District of Xiamen. As the first national center for antitrust review and compliance counseling, it will rely on the platform of the Maritime Silk Road Central Legal District and be based in Xiamen, radiating to Fujian and even the areas along the “Maritime Silk Road”, providing public-interest legal support services for enterprises’ concentration of operators.

Anhui AMR Collecting Clues concerning Monopolistic Issues in the Field of Safety Production Liability Insurance

On November 21, Anhui AMR decided to launch a special investigation and rectification on prominent monopolistic issues in the field of safety production liability insurance. It will seek clues about monopolistic agreements, abuse of market dominance, and abuse of administrative power to exclude or eliminate competition in the field of safety production liability insurance from the society.

Pilot Innovation: Procurement Bidding Documents of Governments Require Fair Competition Review before Public Announcement

On November 17, China Market Regulation News reported that since the beginning of this year, Xiaoshan District, Hangzhou City, Zhejiang Province, has successfully obtained approval to build a provincial pilot reform zone for fair competition policy. Xiaoshan District focuses on optimizing the business environment in the field of government procurement bidding projects, innovatively establishing a new model of mandatory fair competition review before public announcement, strengthening the main responsibility of procurement bidders, and preventing exclusion and elimination of market competition from the source.

Significant Results Achieved in Zhejiang’s Special Anti-monopoly Law Enforcement Action in the Field of People’s Livelihoods

On November 10, Zhejiang AMR disclosed that since the beginning of this year, it has deeply implemented the requirements of SAMR, carried out special anti-monopoly law enforcement action in the field of people’s livelihoods, and eliminated local protectionism and administrative monopolies. A total of five cases of monopolistic practices in the people’s livelihood field have been investigated, 1 case has been concluded, and a fine of 174 million yuan has been imposed. 8 cases of administrative monopolies have been investigated, and 4 cases have been concluded.

First Director of SAMR Assumes Vice Executive Chairman of China Consumers Association

On November 10, the Ministry of Human Resources and Social Security released the news of the appointment and removal of government officials by the State Council, removing Gan Lin from the position of Deputy Director-General of the State Administration for Market Regulation and Director-General of the State Anti-Monopoly Bureau. On November 18, 2021, the State Anti-Monopoly Bureau officially became established, with Gan Lin serving as its first Director-General. On October 25, 2023, Gan Lin was elected as the Vice Executive Chairwoman of the China Consumers Association.

Anti-Monopoly Bureau Accepts Hauswirt’s Report on JD.COM Alleged Abuse of Market Dominance

On November 3, Pang Xicun, Board Chairman of Hauswirt, responded that the State Anti-Monopoly Bureau has accepted Hauswirt’s real-name report against JD.COM On October 24, Hauswirt claimed that it had filed a real-name report against JD.COM to SAMR, pointing out that JD.COM is suspected of abusing its market dominance and disrupting the market competition order, and demanded that JD.COM should restore normal prices. 

SAMR and Beijing Intellectual Property Court Establish Coordination Mechanism for Antitrust Administrative Enforcement and Judicial Proceedings

On November 1, SAMR and the Beijing Intellectual Property Court held a symposium on the coordination mechanism for administrative enforcement and judicial proceedings in antitrust matters. Both sides agreed to establish a daily communication and liaison mechanism, strengthen data and information sharing, discuss the establishment of coordination mechanism concerning case clue notification, investigation and evidence gathering, conduct discussions of typical cases, improve seminars and training, provide mutual professional and technical support, jointly promote the cooperation between administrative enforcement and civil judicial proceedings in antitrust matters, and improve the quality and effectiveness of antitrust work.

Hunan Province Investigated 5 Administrative Monopoly Cases and 5 Operational Monopoly Cases This Year

On November 1, the Hunan Provincial Government introduced the situation of optimizing the business environment. Hunan AMR has fully implemented the fair competition review system, strengthened fair competition review and antitrust enforcement. This year, Hunan AMR has reviewed more than 4,000 governmental documents, rectified 82 governmental documents, and investigated and handled 5 administrative monopoly cases and 5 operational monopoly cases.

Public Enforcement

Jiangxi AMR Corrects De’an County Urban Management Bureau’s Abuse of Administrative Power to Exclude and Eliminate Competition

On November 29, 2023, SAMR released a case in which Jiangxi AMR corrected the abuse of administrative power by the De’an County Urban Management Bureau to exclude and eliminate competition. Jiangxi AMR stopped and corrected the behavior of the De’an County Urban Management, who signed a cooperation agreement to designate three shared electric bicycle operators as exclusive cooperative partners for public transportation services in De’an County.

SAMR Issues Administrative Penalty Decisions of Monopoly Agreement Case concerning 21 Concrete Manufacturers in Hangzhou

On November 9, SAMR issued administrative penalty decision of a monopoly agreement case involving 21 concrete manufacturers in Hangzhou who reached and implemented monopoly agreements. The clues in this case originated from the Judicial Recommendation Letter issued by the local court, and some of the operators and staff involved were held criminally responsible for the crime of coercive business transactions.

Merger Control

SAMR Imposes Remedies on Broadcom’s Acquisition of VMware

On November 21, 2023, SAMR conducted an antitrust review of a concentration of undertakings in the case of Broadcom’s acquisition of VMware and decided to approve the concentration with restrictive conditions.

SAMR Releases Infographic to Introduce Unconditional Approval Cases for the Concentration of Undertakings during First 10 Months of 2023

On November 9, SAMR disclosed that during the first 10 months of 2023, it had published a total of 605 unconditional approval cases for the concentration of undertakings, the majority of which were simple cases. The cases involved domestic enterprises are the main types, in which the main industry involved is manufacturing industry from substantial economy.

Courts Litigation

Supreme People’s Procuratorate Issues Typical Cases of Bid-rigging Crime: Antitrust Compliance Protects Operators from Prosecution

On November 3, 2023, the Supreme People’s Procuratorate released typical cases of procuratorates against bid-rigging crime. In one typical case, the involved companies implement compliance documents for bidding, established effective reporting and reward-punishment mechanism, and conducted legal knowledge and compliance propaganda concerning antitrust laws among employees. The procuratorate determined that the compliance measures taken by the companies involved were effective and decided not to prosecute the companies or its personnel.

Academia

2023 Dacheng China Annual Forum on Competition and Anti-Monopoly Held

On November 15, 2023, Dacheng China Annual Forum on Competition and Anti-Monopoly was successfully held. Focusing on the three topics of “New Anti-monopoly Law”, “New Anti-Unfair Competition Law” and “EU Foreign Subsidies Regulation”, the Forum conducted cutting-edge academic and practical seminar in the Greater Bay Area.

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[15]https://www.samr.gov.cn/fldes/tzgg/xzjj/art/2023/art_e2581fd19b514ec7ba6da64cfbb86163.html

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[19]https://www.spp.gov.cn/xwfbh/wsfbt/202311/t20231103_632772.shtml#1

[20]https://live.photoplus.cn/live/pc/39824958/#/live

Source: Beijing Dacheng Law Offices LLP - Jet Deng and Ken Dai

Editor: IPR Daily-Horace