News – PH – Anti-trust in China: Beijing’s new rulebook raises the bar on what is considered a monopoly


The final version of the Chinese antitrust guidelines contains small but potentially significant changes from the previous draft that could make it difficult for Beijing to single out monopolies, according to legal experts

You said these policy revisions, which went into effect on Sunday, have a lot of implications for how antitrust investigations and disputes will progress in China

This new regulatory framework comes at a time when some of the country’s largest and most influential tech companies – including Alibaba Group Holding and Tencent Holdings – are embroiled in various antimonopoly issues, Alibaba is the parent company of the South China Morning Post >

The new guidelines stipulate that the regulatory authority must define “a relevant market” or the area in which there is a monopoly in an antitrust investigation

This is the key to prove in an antitrust investigation or lawsuit that an internet platform has established a dominant position and abused this position.An internet platform will only be subject to administrative or legal punishment if such a situation exists

In the previous draft published in November, the state administration for market regulation (SAMR) did not have to define a relevant market to call a monopoly in “special cases” It gave the regulators full power to mark any company as a monopoly

The change fills a loophole that, according to You Yunting, Senior Partner at Shanghai DeBund Law Offices, would have given the agency too much discretion in regulatory control of the Internet sector
“If the relevant market cannot be defined in a case, antimonopoly laws cannot be applied,” they said, “It is the duty of law enforcement to define a relevant market in a monopoly investigation”

Defining a relevant market in an antitrust investigation or lawsuit could be a daunting task for regulators in China – home to the world’s largest internet population, largest e-commerce market, and most smartphone users – where boundaries don’t exist are set and do not develop innovative products and services are encouraged The country’s technology industry is an area that China believes will be crucial for advancing modernization and self-reliance over the next decade and a half

An example of how difficult it can be to prove the existence of a monopoly can be derived from an important case between the antivirus software developer Qihoo 360 Technology and Tencent

Qihoo sued Tencent from Shenzhen in 2012 for abusing its dominant position in instant messaging, forcing Internet users not to adopt its security software. In March 2013, the Guangdong Supreme Court ruled in Tencent’s favor. This prompted Qihoo to bring its case Bringing to the People’s Supreme Court In a decision at 75000 characters, the court also ruled in favor of Tencent, as its dominant position was not proven

The requirement to define the relevant market in the guidelines “increases the clarity and flexibility” of the Chinese antitrust business while at the same time helping to “address investor concerns,” said HSBC analyst Binnie Wong in a Tuesday release Report

Another change in the final version is that the independent decision of an internet platform to match or track other players’ prices will not be considered a cartel problem

The guidelines also enable operators to sell goods on internet platforms at prices below cost “for a reasonable period of time”, provided the sales are specifically used to attract new customers or as an advertising campaign. This seems to be the starting shot for internet platforms, to introduce subsidized pricing systems to gain market share

More importantly, the mission statement of the new antitrust directives states that it would ensure “orderly, innovative and healthy development” of the country’s internet sector. Therefore, the cartel efforts aim to “support the innovative development of internet platforms and their international To improve competitiveness “

That has raised questions about how Beijing will be able to tackle Big Tech’s monopoly practices using the new guidelines.It’s a company that falls right on SAMR, the country’s top market regulator

“The previous consultation paper sparked debate among the public and scholars,” said You of Shanghai DeBund Law Offices. “The [new] rules are aimed at protecting free competition, but if antimonopoly laws are not properly applied, this could ultimately harm the economy and consumer rights ”

However, the guidelines could serve as a valuable reference in litigation between big tech companies

TikTok parent ByteDance’s lawsuit against Tencent for alleged monopoly practices was accepted by a court in Beijing this week Experts said this could become a “milestone” as authorities step up antitrust efforts

Another Chinese government agency has intervened in other segments of the Internet sector. The People’s Bank of China published a new draft regulation last month containing definitions of monopoly in the non-bank payments market

“When the Internet industry was just getting started, it was difficult to define the relevant market because there were some new concepts such as the attention business or free online services,” said Yuan Jia, associate professor at Sichuan University Law School However, as the industry grows, more and more experts argue that the definition is not a problem ”

“For companies that operate platforms, the latest guidelines provide better knowledge of the boundaries of their business conduct,” said Yuan

Class at pasok sa opisina ng gobyerno sa Palo, Leyte, suspendido dahil sa ulan at baha

China, competition law, monopoly, price fixing

News – PH – Antitrust law in China: Beijing’s new set of rules raises the bar for what is considered a monopoly
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