Review № 1 of Chinese Antitrust News from the Experts of the BRICS Competition Centre
- Russian-Chinese memorandum on antimonopoly cooperation
- Cyber Data Center opened in China
- Antitrust guidance for industry associations
- Criteria for filing M&A applications have been updated
- China's first consultation center for antitrust compliance inspections
- Three-year plan for the development of the data industry
- JD.com sues Alibaba for $141 million for anti-competitive practices
- Compliance on platforms during the New Year holidays
- SAMR reported on consideration of M&A transactions in 2023
- 26th week of China-EU competition policy
- Results of the campaign to improve agreements and rules on Internet platforms
Russian-Chinese memorandum on antimonopoly cooperation
On December 19th , as part of a meeting between Premier of the State Council of the People's Republic of China Li Qiang and Prime Minister of the Russian Federation Mikhail Mishustin, SAMR and the FAS Russia signed a Memorandum of Understanding for 2024-2025. Based on this document, the parties will interact and cooperate in the field of antitrust regulation, combating unfair competition and in the advertising field.
Source: SAMR
Cyber Data Center opened in China
At the end of December, the China Cybersecurity and Big Data Market Regulation Inspection and Certification Center (“Cyber Data Center”) became operational. The center is intended to become a supporting structure for ensuring “smart” market regulation, effective cybersecurity audits and a leading organization for certification and control in the field of cybersecurity. Its main functions include studying applicable technology standards and technologies, informatization of market regulation, applied big data analysis and implementation of smart regulation.
Source: SAMR
Antitrust guidance for industry associations
The guidelines, published on January 10, aim to prevent industry associations from engaging in activities prohibited by China's Anti-Monopoly Law. Industry associations are the link between business and the government, they perform important functions in providing advice, strengthening self-discipline in the industry, promoting industry development and protecting the rights of enterprises. In this regard, their non-interference in market competition seems especially important. The guidance contains 26 points, including: a prohibition on actions that restrict or eliminate market competition, a listing of situations that potentially constitute a violation of the Antitrust Law, a requirement to strengthen the antitrust compliance system, guidance on legal responsibilities and factors taken into account, and a call for cooperation and joint regulatory efforts.
Criteria for filing M&A applications have been updated
As stated in the press release, the CPC Central Committee and the State Council of the People's Republic of China attach great importance to anti-monopoly work. In conditions of constant economic growth, the current criteria for filing applications for economic concentration seemed to be too low and did not correspond to the objective needs of quality development. The updated document expands market access, reduces transaction costs and provides new impetus for investment, mergers and acquisitions. In the new edition, the criteria are increased as follows:
1) the total global turnover of all participants in the transaction for the previous year was increased from 10 billion yuan to 12 billion yuan ($1.7 billion);
2) the total turnover of all participants in the transaction in China over the previous year was increased from 2 billion yuan to 4 billion yuan;
3) the turnover of at least two parties to the transaction in China over the previous year must exceed 800 million yuan (instead of 400 million yuan previously).
China's first consultation center for antitrust compliance inspections
In the city of Xiamen (southern China), the country's first consultation center for antimonopoly compliance checks on economic concentration transactions has opened. In recent years, large enterprises have carried out many mergers and acquisitions, and in this process they often face antitrust risks, and the new center will help companies reduce costs as much as possible. It provides expert advice from a team of antitrust researchers and lawyers: 10 professional consultants and another 29 volunteers. Volunteers help solve basic issues related to economic concentration transactions, experts deal with more complex difficulties, and for the most complicated cases, the Center requests advice from the Shanghai Market Regulation Authority, which provides advice to enterprises directly via video link.
Source: Baijiahao
Three-year plan for the development of the data industry
China's National Data Administration, created last year to make data a productive factor, has released a three-year plan to use the country's wealth of data to boost the economy. According to the plan, China will formulate more than 300 data application scenarios by 2026 and grow its data industry by 20% annually. This initiative will help “grow” a new driver of economic development. It includes, among other things, mobilizing resources to develop and train China’s own AI models. The plan also calls for an influx of private capital into the data industry. In addition, the authorities noted 12 industries where it is necessary to use data more actively: manufacturing, modern agriculture, commerce, transport, finance, IT, etc.
JD.com sues Alibaba for $141 million for anti-competitive practices
Marketplace JD.com won an antitrust case against its main competitor Alibaba Group: the court decision provides compensation for damages in the amount of $141 million. The Beijing Supreme People's Court ruled that Alibaba abused its dominant position and forced its suppliers into exclusive cooperation, which caused damage to business activities of JD.com. The plaintiff welcomed the court's decision: in his opinion, Alibaba's actions harmed market competition and violated the rights of brands, sellers and consumers.
Previously, for similar violations, Alibaba also received from the market regulator an antitrust fine in the amount of $2.8 billion - it became a record in Chinese antitrust practice.
Source: SCMP
Compliance on platforms during the New Year holidays
In anticipation of the New Year holidays (New Year on January 1st and Chinese Spring Festival on February 10th), SAMR held an administrative compliance workshop for leading retail purchasing and travel planning platforms. During this period, it is especially important to create a calm and safe atmosphere for consumers, and therefore the regulator called on platforms to strengthen regulation, prevent potential risks and protect the interests of users and suppliers. The authorities noted five aspects of compliance:
1) compliance with the responsibility of platforms (publication of platform rules, data verification, increased fines for illegal actions, suppression of the spread of false information);
2) protection of consumer rights;
3) maintaining stable prices for key goods (rice, noodles, oil, vegetables, eggs, milk, local delicacies, entertainment, hotel accommodation);
4) ensuring food safety;
5) preparing a plan to respond to emergency situations using big data (early identification and elimination of risks).
Source: SAMR
SAMR reported on consideration of M&A transactions in 2023
To facilitate effective enterprise restructuring and economic transformation, the following results were achieved in 2023:
- changes have been made to the criteria for filing applications when carrying out transactions of economic concentration;
- work has been launched in pilot mode to delegate the consideration of economic concentration transactions to local market regulatory authorities;
- the Rules for Consideration of Transactions of Economic Concentration and the Guidelines for Antimonopoly Compliance of Economic Concentration were published;
- a total of 797 applications were considered, of which 11 were withdrawn by the applicants, and 786 were approved by the regulator (4 with an order, the rest without an order);
- average review time is 25.7 days (0.8 days less than in the previous year).
As statistics have shown, most transactions were carried out by Chinese companies, mainly state-owned. The most popular industry turned out to be the manufacturing sector of the real economy.
Source: SAMR
26th week of China-EU competition policy
In December 2023, SAMR and the European Commission's Directorate-General for Competition jointly hosted the 26th Competition Policy Week, held in a hybrid format. The parties discussed topics such as methods for considering vertical economic concentration, measures of state support for business, a system for ensuring fair competition, etc. They also expressed their intention to further deepen cooperation in the field of antimonopoly regulation, protect a fair competitive order in the market and promote the sustainable development of mutual trade and economic relationships.
Source: SAMR
Results of the campaign to improve agreements and rules on Internet platforms
In June 2023, SAMR launched a five-month campaign to create fairer and more reasonable agreements and rules for digital platforms. Analysis and public feedback showed that the main issues were the use of policies and agreements to incentivize consumers to auto-renew their subscriptions, unjustifiably expanding the list of items that cannot be returned without explanation within seven days, and the imposition of unreasonable fees.
Local market regulators advised 854 platforms to carefully review their rules and agreements, helped amend 982 agreements, and recommended changes to 2,698. As a result of the campaign, the activity of suppliers of goods and services on the platforms increased, and the level of satisfaction, happiness and security among the general consumer increased significantly.
Source: SAMR
