Wednesday, January 4, 2012
Posted by D. Daniel Sokol
Peter Wang, Yizhe Zhang & Sebastien Evrard (all Jones Day) have a new piece on Chinese Enforcement Against Abuses of Dominance Ramps Up which provides an overview of recent investigations.
ABSTRACT: The first three years under the Chinese Anti-Monopoly Law ("AML") have been dominated by merger control decisions mainly involving foreign companies, and cartel investigations mainly involving domestic Chinese ones.
However, the spotlight recently has begun to shift towards the third major area of anticompetitive activities under the AML: abuses of dominant market position. Several prominent matters have been reported in late 2011, most notably an investigation by price regulator the National Development and Reform Commission ("NDRC") into price discrimination in the provision of broadband internet services by state monopoly telecom companies; another NDRC investigation into refusals to deal involving dominant distributors of an important pharmaceutical precursor, and; a civil AML lawsuit filed against leading search engine Baidu. The AML prohibits such conduct by firms with dominant market positions, subjecting them to penalties that include potential fines of between 1 and 10 percent of annual turnover. This article focuses on the recent NDRC investigations to project future consequences for abuse of dominance cases brought under the AML.