Category Archives: Competition

How MaoTai and Wu Liang Ye Would Defend Against Vertical Pricing Monopoly Fines ordered by China NDRC?

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(By You Yunting) Abstract: Both Mao Tai and Wu Liang Ye can rely on one of the seven situations in Article 15 of the Anti Monopoly Law for their defense. But, that defense will not be easy because it requires evidence that the relevant agreements will not limit market competitors and that consumers can share the interests produced by the agreements.

In yesterday’s post, the writer analyzed the legal meaning of the punishment ordered by the National Development and Reform Commission (“NDRC”) against two top Chinese distilleries, Mao Tai and Wu Liang Ye. Today’s post will go one step further to describe the way for Mao Tai and Wu Liang Ye can protect their own interests.

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The Legal Sense of the Punishment over the Vertical Monopoly of Mao Tai and Wu Liang Ye By NDRC

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(You Yunting) According to the report, Mao Tai Company and Wu Liang Ye Company, both are the top distilleries in China, would be ordered the penalty of 1% of their annual sales in 2012, approximately RMB 449 million yuan, by the National Development and Reform Commission (the “NDRC”) for their restricting or fixing the retail price of their downstream dealers. You might have noticed “would be”, and we have no idea about whether the final decision has been made, and it could not exclude the possibility that the news report is only the public opinion test by NDRC for its punishment in consideration.

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Administrative Warning Issued to 360.cn by Beijing Administration of Industry and Commerce

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 (By You Yunting) Recently, the Beijing Municipal Administration of Industry and Commerce (“Administration”) published on its official Weibo that the Beijing Administration and Xicheng Administration of Industry and Commerce made an appointment with the chief of Beijing’s Qihoo Co. (“Qihoo”), and issued an administrative warning against company conduct, claiming violations of unfair competition laws and regulations related to its “360 Safeguard” for use in computer internet browsers.

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“Do Not Hire Agreements” among Google, Intel, Apple and Other Tech Firms Violates Chinese Laws?

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(By You Yunting) As reported, the CEOs of tech giants Apple, Intel, and Google might be forced to go to court to account for mutual unwritten agreements about not soliciting each other’s workers for employment. These cases started due to the dissatisfaction of relevant employees, who believed that such “do not hire agreements” damaged that legal rights and interests. The news has also revealed emails from former Apple CEO, Steve Jobs, threatening Palm and Google and demanding that they stop using headhunters to obtain the email addresses of Apple employees. This news also raised the concerns within the industry.

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Is Tencent’s 51Buy’s “Higher Price Reimbursement” Strategy against 360buy Illegal?

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(By You Yunting) As reported by the media, the e-commerce site 51buy.com has instituted a so-called “higher price compensation” strategy: if clients of 51buy.com, an affiliate of Tencent, find a lower price for an item on 360.com, then 51buy.com will refund the price difference to the client as credits. According to 360buy.com, however, this action violates the Anti-unfair Competition Law and relevant commercial ethics. 360buy.com therefore sent a warning letter to 51buy.com. In reply, 51buy.com used its Weibo to state that the activity is legitimate and will continue.

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Damages from Over Promotion by E-retailers

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Recently, a sale’s promotion campaign (note: the link is in Chinese) is launched by China e-commerce merchants on Weibo, a twitter like website. On 14th August, Mr. Liu Qiangdong, CEO of 360buy.com made a statement on Weibo that all the major home appliances sold on his website will maintain ZERO gross profit in the coming 3 years, and will also be 10%  cheaper than those sold by Sunning and Gome, who are also the major E-retailers in China. Facing the challenge, Sunning (SZSE: 002024) and Gome (SEHK: 493) replied that all their commodities will be cheaper than 360buy.com. After that, both sides announced they will adjust the prices in time to ensure its own prices are lower than the opponent. The quarrel on Weibo triggered a promotion battle between the e-retailers, and after the 1st day of fighting, 360buy.com said the total sales of the day had been over RMB 200 million.

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Analysis on Lawsuits and Arbitration in Domain Name Dispute Settlement System in China

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By Luo Yanjie

According to a news report, Apple filed arbitration in June over “iPad 3.com” in WIPO, and claimed the adjudication to grant it the domain name. So far as is known this week, Apple is said to have received the internet address, and the registration information of iPad 3.com, and has now been updated, transferred from Global Access to Kilpatrick Townsend & Stockton; the law firm entrusted by Apple.

The development and popularity of the Internet has increased the weight of domain names to the companies, especially for those engaged in the Internet industry and to them the domain name is playing the main role in propaganda with the replacement of trademark to some extent. Therefore, the domain name has been one of the main battlegrounds of the Internet or IT companies, and that thereby has brought many disputes. Due to the fact that the domain name is unified in global standard, the dispute concerning the domain name could be mainly settled in arbitrations (like Apple did in the case above, while it’s a little different from the contractual arbitration as specified below) and lawsuits. Now, we would like to introduce you how these two settlement methods applied in China:

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Full Text of Judicial Interpretation on Anti-Monopoly Law of China Supreme Court

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The Supreme People’s Court issued Regulation on Several Issues Concerning the Application of Law in the Trial of Civil Cases arising from Monopolistic Conducts yesterday and the new judicial interpretation of Anti-Monopoly Law will take effect on 1st June, 2012. We have translated the Chinese version into English as follows:

Regulation on Several Issues Concerning the Application of Law in the Trial of Civil Cases arising from Monopolistic Conducts

To ensure the proper judgment of civil disputes arising from the monopoly, prevent monopolistic conducts, protecting and promoting fair competition in the market, safeguarding the interests of consumers and social public interests, this regulation is enacted according to the relevant regulations such as the Anti-monopoly Law of the People’s Republic of China, the General Principle of the Civil Law of the People’s Republic of China, the Law of the People’s Republic of China on Tort Liability, the Contract Law of the People’s Republic of China and the Civil Procedural Law of the Peoples Republic of China.

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Does Combination of Youku and Tudou breach China Anti-monopoly law?

Reportedly(the report is in Chinese), the two Chinese leading video websites, Youku.com Inc. (NYESE: YOUKU) (“Youku”) and Tudou Holdings Ltd. (NASDAQ: TUDOU) (“Tudou”) jointly announced today that on 11th March, 2012, they have signed a definitive agreement for the combination of Tudou and Youku in a 100% stock for stock transaction, which has been approved by each party’s board of director but still waiting for the shareholders’ approval, and is planned to be completed in the third quarter of 2012.I think, it shall be noted that some anti-monopoly issues may be arisen from the combination of the two Chinese biggest video websites, which possibly resulting adverse impacts on the rights and interests of consumers and fair competition.

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