China Monthly Antitrust Update: February 2024

IPR Daily

2024-02-27 16:31:28

Legislation

Significant Increase in the Notification Threshold for Concentration of Undertakings

On January 26, 2024, the State Council announced the revised Provisions of the State Council on the Notification Thresholds for Concentrations between Undertakings, which came into effect on the date of announcement. The new provisions significantly raised the notification threshold, removed the notification obligations for "top-notch mergers and acquisitions" that were included in the draft for comment, and reaffirmed the State Administration for Market Regulation (“SAMR”）’s power to require notification and investigate concentration of undertakings that may not meet the notification thresholds but could potentially eliminate or restrict competition. ¹

Competition Compliance Manual for Businesses in Guangdong and Hongkong Simultaneously Issued

On January 10, the Guangdong Administration for Market Regulation (“AMR”）and the Competition Commission of the Hong Kong Special Administrative Region simultaneously issued the Competition Compliance Manual for Businesses in Guangdong and Hongkong. This Manual is an innovative measure by the antitrust law enforcement agencies of Guangdong and Hong Kong to enhance the integration of the Greater Bay Area. It provides general guidance on the business operations of Guangdong and Hong Kong enterprises without being mandatory, aiming to guide businesses in both regions to consciously compete legitimately. ²

Beijing Implements High-Standard Fair Competition Review Procedure Regulations: Emphasizing the Work Process and Assessment Spot Checks

Recently, to build a nationally unified big market, perfect the basic institutional system of the market economy for fair competition, and fully implement the fair competition review system, the Beijing AMR, with the Municipal Development and Reform Commission, the Municipal Finance Bureau, the Municipal Commerce Bureau, and the Municipal Justice Bureau, jointly issued the Beijing Fair Competition Review Work Procedure Regulations (Trial) with the approval of the Beijing Municipal People’s Government. ³

Authorities

SAMR to Steadily Advance Normalized Supervision of Platform Economy with Ex Ante compliance, Interim Review, and Ex Post Accountability

On January 31, 2024, the State Council Information Office held a press conference where Mr. Pu Chun, the Deputy Director of SAMR, introduced the situation concerning invigorating the vitality of business entities and assisting in the high-quality economic development. He stated that SAMR will steadily promote the normalized supervision of the platform economy, including ex ante compliance, interim review, and ex post accountability, to provide strong support for building a new development pattern and promoting high-quality development. ⁴

Shenzhen AMR Sends Notices to Remind and Caution Pharmaceutical Companies to Operate in Compliance with Fair Competition

On January 16, to regulate the order of pharmaceutical production and distribution, purify the distribution environment, strengthen the supervision and management of the pharmaceutical market, and promote the healthy development of the pharmaceutical industry, the Shenzhen AMR sent notices to remind and caution all pharmaceutical production and operation entities to operate in compliance with fair competition. ⁵

SAMR: Continuously Optimizing the Market Environment for Fair Competition

On January 16, the State Administration for Market Regulation issued a document pointing out that fair competition is the basic principle of the market economy and an important basis for the efficient operation of the market mechanism, we must deeply understand the significance of protecting and promoting fair competition, further promote the implementation of fair competition policies, continue to optimize the market environment for fair competition, and serve the high-quality development of the economy and society with a high level of fair competition governance. ⁶

Public Enforcement

Third Batch of Typical Cases Released in the 2023 Special Anti-monopoly Law Enforcement Action in the Livelihood Sector

On January 26, 2024, the third batch of typical cases from the special anti-monopoly law enforcement action in the livelihood sector is announced by SAMR, which involves several industries closely related to people’s livelihood, such as medical care, housing, and transportation. ⁷

Eleven Brick-Making Enterprises in Yunnan Subject to Administrative Penalties for Reaching and Implementing Monopoly Agreement

On January 24, SAMR publicized a penalty decision that Yunnan AMR made an administrative penalty decision on 11 brick making enterprises in Yanshan County of Yunnan Province for reaching and implementing monopoly agreements. ⁸

Three Administrative Monopoly Cases in Gansu Province Focus on the Physical Examination Industry

On January 18, Gansu AMR issued announced that it had corrected suspected abuse of administrative power to exclude and restrict competition in three cases concerning physical examination industry. ⁹

Used Car Dealer in Henan Province Fined Despite No Turnover for Last Year

Recently, Henan AMR disclosed a monopoly agreement case in the field of used cars, in which two companies with no turnover for last year were fined RMB 3,000. ¹⁰

SAMR Publishes Administrative Penalty Decision for Monopoly Agreement Case of the Fuzhou Real Estate Appraisal Association

On January 12, SAMR publicized the administrative penalty decision for the monopoly agreement case of the Fuzhou Real Estate Appraisal Association. The Fujian AMR initiated an investigation into the suspected monopoly agreement behavior of the Fuzhou Real Estate Appraisal Association in November 2021. In October 2023, the Fujian AMR made an administrative penalty decision against the Fuzhou Real Estate Appraisal Association according to the law. ¹¹

11 Cases Publicized in One Week: Government Departments Should Stay Away from Monopolistic Conducts

Recently, AMR in Beijing, Jiangxi, Guangdong, Hunan, Liaoning, and other regions have corrected actions by local government departments that abused administrative power to exclude and restrict competition. ¹²

Merger Control

New Record: SAMR Concludes 797 Business Concentration Cases in 2023

On January 23, 2024, SAMR released a news release saying that in 2023, SAMR effectively gave full play to the positive role of merger review of business concentration in helping enterprises optimize and restructuring, and economic transformation and upgrading, concluded 797 cases in the year, of which 786 were approved and 11 were withdrawn after acceptance. 13

Courts Litigation

Supreme People’s Court Reverses China’s First Case of Refusal to License Case in Non-SEP Area

On January 23, 2024, Proterial (formerly Hitachi Metal) issued a statement on its official website, saying that the Supreme People's Court (“SPC”) rejected the first instance judgment made by the Ningbo Intermediate People's Court in 2021, and found that Proterial did not constitute an abuse of dominant market position by refusing to deal. ¹⁴

[1]https://mp.weixin.qq.com/s/OLsQPrlW5fuP-wRTkqaggA

[2]https://mp.weixin.qq.com/s/e2PPxsSkEupNUNiWyGCBug?scene=25#wechat_redirect

[3]https://scjgj.beijing.gov.cn/zwxx/scjgdt/202401/t20240110_3531206.html

[4]http://www.scio.gov.cn/live/2024/33285/tw/

[5]https://www.sz.gov.cn/cn/xxgk/zfxxgj/tzgg/content/post_11114093.html

[6]https://mp.weixin.qq.com/s/9pA_Ivh9T45TSByi2uoRTg?scene=25#wechat_redirect

[7]https://mp.weixin.qq.com/s/qEtsZPooIAL7sqNczItMeQ?scene=25#wechat_redirect

[8]https://www.samr.gov.cn/fldes/tzgg/xzcf/art/2024/art_1b2902cfc49e4fd083956aa446bff029.html

[9]https://scjg.gansu.gov.cn/scjg/c110132/202401/173841257.shtml?fLEvYk0FzGXg=1707120516563

[10]https://static.nfapp.southcn.com/content/202401/10/c8491123.html?colID=23801&firstColID=1365&enterColumnId=23801

[11]https://www.samr.gov.cn/fldes/tzgg/xzcf/art/2024/art_a000ac9c59ae436dad79ac55532679c0.html

[12]https://mp.weixin.qq.com/s/XXZoPFY6LXC3LOOhHCdXvA?scene=25#wechat_redirect