How does China’s Court Determine the Validity of Arbitration Clauses in Monopoly Dispute?

Pursuant to the Anti-Monopoly Law, the Civil Procedure Law and the Arbitration Law, there is no limitation of applying arbitration clause as a settlement to monopoly disputes in China. The Arbitration is well acknowledged for its confidentiality, flexible legal or commercial basis of arbitrating and its finality of one award, which are perfectly adapted to the requirements of confidentiality, efficiency and reliance on customs in business operation. Therefore, the practice of arbitration clause can bring about significant values and meanings to commercial subjects, and furthermore help indicate various risks and opportunities of different timing in relevant market. In this essay, we will introduce relevant cases and investigate whether the judicial opinions on arbitration clauses applied in monopoly disputes are appropriate.

READ MORE

Judgment Abstract on NDRC’s Administrative Decision of Zhejiang Insurance Association in China

(By You Yunting) By reports, recently, National Development and Reform Commission (the “NDRC”) investigated the industry group the Zhejiang Insurance Association and its membership insurers, originated from that the Zhejiang Insurance Association in violation of the Anti-Monopoly Law organized its 23 membership insurers to agree on unified commissions from auto insurance premiums through meetings. The NDRC fined 22 of the insurers a total of RMB 110 million. Today, we will introduce the NDRC’s Punishment Decision on Zhejiang Insurance Association and make some comments.

READ MORE

Judgment Abstract on NDRC’s Administrative Anti-Monopoly Decision of PICC Zhejiang Branch’s Impunity in China

NDRC

(By You Yunting) By reports, recently, National Development and Reform Commission (the “NDRC”) investigated the industry group the Zhejiang Insurance Association and its membership insurers, originated from that the Zhejiang Insurance Association in violation of the Anti-Monopoly Law organized its 23 membership insurers to agree on unified commissions from auto insurance premiums through meetings. The NDRC fined 22 of the insurers a total of RMB 110 million, with PICC Property and Casualty Company Limited Zhejiang Branch, an insurer, escaping punishment because of informing the authorities and providing key evidence. In today’s post, we will introduce the decision on PICC Property and Casualty Company Limited Zhejiang Branch escaping punishment and make comments.

READ MORE

Is CCTV Refusing to Sub-license World Cup Broadcasting Rights Found Violation of the Anti-Monopoly Law?

(By You Yunting)The 2014 FIFA World Cup is taking place at several venues across Brazil, and is attracting attentions from all over the world. According to reports, CCTV holds the exclusive rights of broadcasting 2014 FIFA World Cup in mainland China. However, CCTV refuses to sell the right of live network broadcasting but only sells the on-demand right of network broadcasting to video sharing websites. In reality, CCTV refusing to sell the right of live network broadcasting could potentially be considered to be a violation of the Anti-Monopoly Law. The following is our legal analysis.

READ MORE

The Anti-Monopoly Judgment’s Digest of Huawei vs. InterDigital of China Courts

huawei

(By You Yunting) The anti-monopoly litigation of Huawei v. InterDigital caused the attention of intellectual property bound in China. Huawei had filed litigations in China accusing InterDigital of discrimination in patent licensing. Recently, Guangdong Higher People’s Court published its rulings in Huawei v. InterDigital. In today’s post, we will present the judgment of this case and address our comments in the following.

Introduction to the Case:

Appellant (Plaintiff in the first instance): Huawei Technologies Co., Ltd (the “Huawei”)

READ MORE

NDRC should Further Improve the Transparency of Administrative Law Enforcement on Price Monopoly.

Abstract: Five Shanghai gold retailers fined for price manipulation because although they were supposed to be competing with each other, the retailers conspired to fix the price, which constitutes as a horizontal monopoly, a clear violation of the Anti-Monopoly Law. The reason behind the five gold retailers’ fines is that their practices of horizontal monopoly caused more severe harm to consumer’s legal interest and social orders than that of previous vertical monopoly on limitation of resale prices made by Mao Tai, Wu Liang Ye, and six milk powder manufacturers. However, what is puzzling about this fine is that the punishments for this horizontal monopoly violation made by the NDRC were inferior to that of vertical monopoly violation.

READ MORE

Could Milk Powder Manufacturers Win the Lawsuits Against NDRC’ s Vertical Monopoly Penalty?

(By You Yunting) According to Chinese National Development and Reform Commission’s (“NDRC”) announcement, recently NDRC carried out anti-monopoly investigations into milk powder manufacturers and imposed fines on multiple offenders. When combined this announcement with the second instance court’s decision on Beijing Rui Bang Co., Ltd that was released last week by Shanghai Higher People’s Court, we have seen a sharp difference between NDRC and Chinese courts’ understanding of Article 14 of the Anti Monopoly Law. Therefore, if the punished milk powder manufacturers file an administrative lawsuit against NDRC’s fines, the Chinese court may not necessarily agree with the commission’s decision nor hold the punishment to be legal.

READ MORE

Why Did the Court Not Rule in Accordance With Article 14 of the Anti Monopoly Law? Part II

(By You Yunting) August 1, 2013 was the fifth anniversary of the enactment of China’s AntiMonopoly Law. On the same day, Shanghai Higher People’s Courts handed down the first decision that supported a plaintiff’s claim in an anti-monopoly civil ligation in China. The court determined that Johnson & Johnson Medical Co. Ltd action constituted as a vertical monopoly for restricting the minimum sales price, and the company was ordered to make civil compensation for the plaintiff’s loss.

READ MORE

Full Text of NDRC’s Public Announcement on Milk Powder Manufactures’ Vertical Monopoly of Price Control

未命名

(By You Yunting) According to the latest announcement on Chinese National Development and Reform Commission website, NDRC’s carried out anti-monopoly investigations into milk powder manufacturers and imposed fines. Based on this announcement, we found that there are different views between NDRC and Chinese courts on the understanding of Article 14 of the Anti Monopoly Law. With regard to the court’s understanding that milk powder formula in this case is effective competitive, the milk powder manufacturers shall not the determined as violating the the Anti Monopoly Law even if they conducted price control. Following is our translation for this public announcement.

READ MORE

Why Did the Court Not Rule in Accordance With Article 14 of the Anti Monopoly Law? Part I

(By You Yunting) August 1, 2013 was the fifth anniversary of the enactment of China’s AntiMonopoly Law. On the same day, Shanghai Higher People’s Courts handed down the first decision that supported a plaintiff’s claim in an anti-monopoly civil ligation in China. The court determined that Johnson & Johnson Medical Co. Ltd action constituted as a vertical monopoly for restricting the minimum sales price, and the company was ordered to make civil compensation for the plaintiff’s loss.

READ MORE

Why the Anti-Monopoly Law Can’t Cut Price of Infant Milk Formula in China?

未命名

(By You Yunting) According to media reports, China’s National Development and Reform Commission (“NDRC”)’s anti-monopoly investigation into infant milk formula discovered that nine milk powder manufacturers, including Wyeth, announced one after another in early July that they would lower their prices, with an average discount of 11%. At the same time, Wyeth canceled its earlier decision to raise the price of Wyeth S-26 Progress GOLD product, a new product by 4 percent. Some consumers told reporters that salesclerks would first recommend Wyeth S-26 Progress GOLD product, and would only bring out the discounted, original milk formula when asked by the consumer with regards to the discount. The following points should be look at more carefully:

READ MORE

Plaintiff First Wins Chinese Anti Monopoly Civil Case

图片1

(By You Yunting) The fifth anniversary of enforcement of Chinese Anti Monopoly Law fell on August 1, 2008. Just on this day, Shanghai Higher People’s Courts first supported plaintiff’s claim in anti-monopoly civil case. The court determined that Johnson & Johnson Medical Co. Ltd constitutes a vertical monopoly for restricting on the minimum sales price and shall make civil compensation on plaintiff’s loss.   Past essays on this website have introduced the first instance judgment on this case made by Shanghai No.2 Intermediate Court; the summary of the judgment is as followed: Do All Minimum Price Limits Violate the Anti-trust Law in China?   The plaintiff, Beijing Rui Bang Yong He Science and Trading Co., Ltd. (the “plaintiff”) used to be the dealer of Johnson & Johnson Medical (Shanghai) Ltd. and Johnson & Johnson Medical (China) Ltd. (the “defendants”). Cooperation between the parties lasted for nearly fifteen years, and the distribution contract was renewed each year. On January 2, 2008, the defendants entered into a distribution contract with the plaintiff stipulating that the plaintiff could not sell the product below the price set by the defendants.   On July 1, 2008, the defendants sent a letter to the plaintiff, saying that they would deduct the RMB 20,000 yuan deposit paid by the plaintiff due to the plaintiff’s unlicensed markdown sale. In the meantime, the defendants ordered plaintiff to stop its lower priced sales and stated that the plaintiff’s product supply would be cancelled and that the plaintiff would no longer be the defendants’ dealer.   The plaintiff believed that the defendants’ limit on the minimum sales price has constituted the floor price setting as prohibited in Paragraph 2 of Article 14 in the Anti Monopoly Law, and thereby caused damages to the plaintiff. Basing on these, the plaintiff filed a lawsuit in the court, claiming the compensation.   After the hearing, the Shanghai No.1 Intermediate People’s Court held that the decision on the existence of monopoly agreements as regulated by Article 14 of the Anti Monopoly Law could not only consider whether the undertakings have concluded a monopoly agreement with their trading counterparts that would fix or limit sales prices, but also consider Paragraph 2 of Article 13. This means it is necessary to further check whether the agreement excludes or limits competition. Considering the evidence presented by the plaintiff could not prove the above issues, the court refused all the claims of the plaintiff.   Shanghai Higher Court held after the trial that Anti Monopoly Law shall be applied in the case, since the distribution contract between the plaintiff and the defendants containing clauses restricting the plaintiff to sell the product at a minimum price constitutes such effects of eliminating or restricting competition without clearly sufficient promotion for competition. For these reasons, the higher court determined the distribution contract constituted a monopoly agreement as regulated by Article 14 of the Anti Monopoly Law. Concerning the fact that the defendant took such actions that could be involved in the monopoly as provided in the Anti Monopoly Law, the court determined that those actions concluded a monopoly agreement prohibited by the Anti Monopoly Law and accordingly the defendant shall make compensation for loss to the plaintiff. On these grounds, the higher court reversed the original judgment and decided that the defendant shall make compensation in the amount of RMB 530, 000 yuan to the plaintiff in 10 days. In addition, the higher court refused the other claims made by the plaintiff.   Our lawyers have already obtained the second instance judgment. We would interpret it in the next week’s post.

READ MORE

Do All Minimum Price Limits Violate the Anti-trust Law in China?

J&J

(By You Yunting) In the post, “The Legal Sense of the Punishment over the Vertical Monopoly of Mao Tai and Wu Liang Ye By NDRC,” which was posted several days ago, we described China’s first case on vertical pricing agreements (a vertical monopoly contract refers to a contract a monopolistic business signs with its business partner, which limits pricing or contains other monopolistic content). The application of Article 14 of the Anti Monopoly Law adopted by the court in that case was different from the application adopted by the China National Development and Reform Committee. We have found and studied the written judgment for that case, which is now in its second instance. Although according to the Civil Procedure Law, the judgment of the first instance has not yet come into effect due to the appeal, some of the main points of the decision are worth looking at. Therefore, we would like to share our opinions on it with our subscribers.

READ MORE

Full Text of the Anti-trust Punishment Ordered by China NDRC against MaoTai and WuLiangYe Vertical Pricing Monopoly

360截图-94650845_副本

The Price Bureaus under the Provincial Development and Reform Commissions in Sichuan Province and Guizhou Province published their orders for punishment against the vertical pricing monopoly by MaoTai and WuLiangYe on their official websites. By the orders, the two distilleries were fined totaled RMB 449 million yuan (approximately $ 72, 064, 500 dollar). The following is our translation of the full text of the administrative punishments already ordered.

The punishment ordered by Sichuan Provincial Development and Reform Commission:

READ MORE

Would NDRC’s Vertical Pricing Monopoly Fine against MaoTai and WuLiangYe Have Influences on Other China Companies?

360截图-11608502_副本

(By You Yunting) Over the past few days, the writer shared two essays concerning the administrative punishment ordered against Mao Tai Company and Wu Liang Ye Company, the top distilleries in China, over the accusation that they violated the Anti Monopoly Law by concluding monopoly agreements restricting or fixing retail prices (the “monopoly agreements”) with their dealers. The writer has received heated comments and arguments from the subscribers and followers of his Weibo and Blog. Many of these comments support the punishment, but some friends have expressed concerns over the issue. Today, the writer will share his opinions on whether the punishment will influence the normal commercial order.

READ MORE