China's Supreme People's Court decision clarifies the legal basis and evidentiary standards for pursuing such claims against administrative monopolies.
China's Supreme People's Court has set an important precedent by offering a detailed analysis of how antitrust provisions apply to cases of non-disclosure of government information. The decision establishes an analytical framework for future litigation involving administrative monopolies.
The ruling addresses a case where two Jiangsu-based companies sued a municipal natural resources and planning bureau in Nantong city for allegedly failing to disclose land use and other crucial information needed for their business operations. The appellants, whose names were redacted, claimed this lack of disclosure impeded their entry into the markets for intellectual property, land management, real estate development and investment, scientific research and technical services, as well as telecommunications.
The companies appealed to the top court after the Suzhou Intermediate People's Court rejected their case in August 2023 on grounds that it didn't fall within its jurisdiction. Initially, the plaintiffs were seeking compensation totaling 12 billion yuan ($1.7 billion).
In its ultimate decision, the Supreme People's Court, the country's top court, rejected the appellants' claims for insufficient evidence, but clarified the legal basis and evidentiary standards for successfully bringing such claims.
Remarkably, the top court corrected the lower court's error in case classification, affirming that the Suzhou court does have jurisdiction because the case should be categorized as "abuse of administrative power to exclude or restrict competition" rather than a demand for a judgment "confirming that an administrative act is illegal."
The Supreme People's Court cited Article 42 of China's 2022 amended Antimonopoly Law, which prohibits administrative bodies from "excluding or restricting business operators from participating in bidding and other business activities by not disclosing information according to law."
For plaintiffs to qualify as eligible to bring such cases, the court established they must provide preliminary evidence that in "specific market activities" they were excluded or restricted from competition by an agency's action or inaction. The harm must be concrete and specific, not abstract or general, the court explained in its decision dated April of last year but made public only last week.
The court specified that plaintiffs would need to demonstrate either that competitors gained unfair advantages through preferential access to information, or that the agency deliberately blocked information disclosure, causing plaintiffs to lose the opportunity for specific transactions.
However, the court noted that these plaintiffs' complaint alleged a continuous failure by the Nantong bureau to disclose information, rather than specifying the particular information whose absence caused them to be unfairly affected.
"The companies aren't qualified parties to bring this case, and therefore their lawsuit does not meet the statutory requirements," the court said. It hence dismissed the appeal and upheld the original ruling, while noting that "although the first-instance court incorrectly applied the law, its final ruling was correct."
This precedent adds valuable jurisprudence to Beijing's push to tackle administrative monopolies that have long fragmented the domestic market. Since early this year, Chinese leaders have ramped up efforts for a unified nationwide market, seen as crucial to countering US trade actions on Chinese exports.
Source: MLex
