OCTOBER 2013
Legal Focus do you see many cases of price fixing?
Yes. And I’m afraid the circumstances are grimmer in China. China and its domestic companies, including SOEs and private enterprises, have been long under planned when price fixing was a convention. We saw anti-monopoly enforcement agencies (AMEA) in China speeding up enforcement in this regard in recent years, but it takes even longer to convert the current situation.
this year has seen many antitrust enforcement
cases by AMEA aiming at giants in various industries with large fines.
What challenges do they bring?
The existing cartel cases and the emerging anti-monopoly enforcement activities in China bring quite a lot contradiction in applying Anti-Monopoly Law (“AML”), the principle legislation of Chinese competition law. Since provisions of AML are rough and precedents are limited, there’s much uncertainty how AMEA will adopt and interpret the AML.
How does anti-trust compliancy affect local and foreign businesses?
For local companies, it is a hard transition period when they need to adapt themselves to the underdeveloped field of antitrust compliance.
Foreign companies, as I mentioned above, will have to face the unpredictable enforcement activities in China. In some cases, the AMEA holds a harsher attitude than their counterparties in other jurisdictions, such as in the Seagate/Samsung transaction, while having a minor attitude in other cases such as toward RPM. Thus foreign companies will have to conduct at least as cautiously as they do in other jurisdictions. And it’s better
multinational companies to adopt
separate antitrust guidance and employ local consultancy when establishing branches in China.
Has the economic climate seen an increase in competition litigation?
As far as I am concerned, there will be an increase. Shanghai Higher People’s court just gave the final adjudication favoring plaintiff in an antitrust litigation against Johnson & Johnson. Plus this year has seen many antitrust enforcement cases by AMEA aiming at giants in various industries with large fines. These official decisions can be used as adverse evidence against the involved companies in follow-up litigations, if there are any. All the cases by far can be incentives for potential plaintiffs.
Is there anything else you would like to add?
I still want to further stress the instability where antitrust enforcement is directed in China. Therefore, it is important to keep a close eye on typical cases in this respect, since each may become a landmark precedent and shed light on any uncertainty. What’s more, additional regulations are very crucial including some pending legislation because of the roughness of AML. LM
contact:
Ken dai Partner dacheng Law offices 3F, 500 South Pudong Road, Pudong district, Shanghai, china
tel: +86-21-5878 1965 Fax: +86-21-5878 6866
Email:
jianmin.dai@dachenglaw.com Website:
http://www.dachengnet.com/
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