China's market regulator raised concerns over market concentration and foreign capital in patent database services vital for R&D.
China’s antitrust regulator has warned that growing foreign investment in the country’s patent database sector threatens national technological security. In its 2024 Antimonopoly Enforcement Annual Report, the State Administration for Market Regulation (SAMR) expressed concerns over market concentration and foreign-backed firms dominating services that organize critical global patent data for R&D.
According to SAMR, the market is becoming heavily "foreign-funded," with major players like Patsnap, IncoPat, and Patentics backed by foreign investors. The regulator described the market as a "duopoly with market fragmentation," with Patsnap and IncoPat capturing about 70 percent of the market, while competitors including Patentics, HimmPat and New York-listed Clarivate's Derwent divided the remainder.
The regulator outlined four main risks:
- Foreign control over research data,
- Monopolization undermining industrial autonomy,
- Abusive market behavior (e.g., excessive pricing),
- AI-related risks like privacy breaches.
SAMR called for better monitoring, stronger competition oversight, and improved AI ethics governance to safeguard tech independence.
Sector Reviews: Semiconductors, Cloud, EVs
SAMR also reviewed competition in five other strategic sectors: semiconductor materials, cloud services, warehousing, EV charging and battery swapping, and cultural ticketing.
In semiconductors, it found high market concentration and entry barriers. For example, top firms in wafers and specialty gases control over 90% and 70% of the global market, respectively. In CMP pads, one firm holds 80%. SAMR highlighted risks of price-fixing, market division, and abuse of dominance.
Other sectors drew similar caution. The cloud market is dominated globally by U.S. firms but remains competitive. In EV infrastructure, SAMR warned of foreign regulatory moves potentially limiting China’s global reach.
Enforcement Summary
In 2024, SAMR reviewed 643 mergers, approving most but raising concerns over four deals. It conditionally approved JX Advanced Metals’ acquisition of Tatsuta Electric and flagged Synopsys' takeover of Ansys for review. Two deals were abandoned under scrutiny.
The agency launched 17 new probes into anti-competitive behavior, concluded six cases with ¥11.1 million in fines, and imposed ¥106.9 million in abuse-of-dominance penalties. SAMR also tackled 72 administrative monopoly cases, closing 57 of them.
Source: MLex
