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Wednesday, April 1, 2009

Abuse of dominant position case in China

posted by Shubha Ghosh

From Paul Jones, prominent Toronto attorney:

The refusal of the Coca-Cola merger with Huiyuan juice two weeks ago has been extensively covered in the news inside and outside China.

 Less well covered has the development of private actions, in part because none of them of made it to the stage of being heard on the merits. But they are developing. According to a story today in Caijing the Beijing Dongcheng District People’s Court (the area just east of the Forbidden City) accepted a suit brought against China Mobile Group and China Mobile Communications Corporation for abuse of dominant market position with respect to their various packages for mobile telephones:

(Article in Chinese) http://www.caijing.com.cn/2009-03-31/110130848.html

 It appears from the article that the plaintiff, an existing customer of one of the defendants, is complaining that he is being charged more than new customers for the service. He says this violates Articles 17(5)and (6) of the AML. Article 17(5) prohibits tie-in sales and other unreasonable transactions and Article 17(6) prohibits price discrimination. Both require that the conduct be without justification or that the defendant not be competing on the merits (没有正当理由). When the plaintiff signed up he was charged a monthly service fee of 50 yuan ($7.32 USD at today’s rate) which he continues to pay. Since then China Mobile has launched other service plans without the monthly fee.

 The defendants are said to have more than 70% of the market for mobile services.

 This case is similar to a suit launched against China Netcom, an internet service provider, for discriminatory pricing based on the type of residence permits (户口- Hukou) that people carry. That suit sounds like it may have a better a chance of success than this one. That case was accepted by the court last September (see http://news.xinhuanet.com/fortune/2008-09/20/content_10082021.htm in Chinese).

Paul Jones      Пол  Джоунс

Barrister , Solicitor & Trade-mark Agent

 Jones & Co.

365 Bay Street, 2nd Floor

Toronto, Ontario

Canada M5H 2V1

E-mail : pjones@jonesco-law.ca

NEW Web Site: www.jonesco-law.ca

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Comments

People may be too optimistic about the usefulness of Chinese Anti-monopoly law. I personally do not believe the grouds within the case against China Mobile Group are solid.

Posted by: Liyang | Apr 6, 2009 3:01:38 AM

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