Review № 16 of Chinese Antitrust News from the Experts of the BRICS Competition Centre
- SAMR Antitrust Report 2024
- Draft Regulation for Live-Streaming E-Commerce
- Draft Measures for the Supervision and Administration of Online Trading Platforms Rules
- China called for its automotive industry to halt price wars
- Temu’s daily US users cut in half due to tariffs
- Public Comments on the Draft Revision of the Provisions on Prohibiting Monopoly Agreements
- Supreme Court rules that “non-compete” clauses are invalid
- Chinese Regulators Scrutinize Hutchison Ports Deal
SAMR Antitrust Report 2024
The State Administration for Market Regulation (SAMR) has released its annual report on antitrust enforcement for the year 2024. According to the report, decisions were issued in 11 cases involving anti-competitive agreements and abuse of market dominance. Additionally, one fine was imposed for obstruction or refusal to cooperate with an investigation. Over the year, the agency reviewed 643 merger control filings and made significant efforts to address unresolved issues related to local protectionism and market segmentation. SAMR also investigated 72 cases concerning the abuse of administrative power that undermines fair competition. As part of its efforts to deepen international antitrust cooperation, China signed memorandums of understanding and cooperation agreements on competition with several countries. The agency also hosted the National Conference on Fair Competition Policy to further promote a level playing field in the market.
Draft Regulation for Live-Streaming E-Commerce
As part of efforts to strengthen oversight of emerging industries, Chinese authorities have released a draft version of the Regulation for Live-Streaming E-Commerce for public consultation.The draft sets out detailed responsibilities and obligations for live-streaming e-commerce platform operators, including thorough verification of service providers. It also outlines duties for hosts and their agents, such as a prohibition on the use of false or misleading information. In addition, the document introduces specific regulatory tools, clarifying the enforcement powers of relevant authorities and requiring platforms to cooperate with regulators in identifying and addressing violations. The draft also specifies concrete penalties for non-compliance.
Earlier, SAMR published a list of 10 typical violations in the livestream marketing sector and announced plans to establish a unified digital database encompassing all livestream hosts and merchants.
Draft Measures for the Supervision and Administration of Online Trading Platforms Rules
The internal rules established by internet platforms significantly influence the business activities of goods and service providers operating within those platforms. While current legislation requires these rules to be made publicly available, there are no strict limitations or effective oversight mechanisms in place. In response, the State Administration for Market Regulation (SAMR) has drafted the Measures for the Regulation of Internet Platform Rules. The document outlines a range of requirements concerning the formulation and modification of platform rules, their implementation, data protection, the safeguarding of rights and interests of platform-based suppliers, and consumer protection. It also includes provisions on external oversight mechanisms, regulatory responsibilities, and legal accountability. The draft has been released for public consultation, with the comment period open until July 4.
Source: SAMR
China called for its automotive industry to halt price wars
On May 31, the China Association of Automobile Manufacturers (CAAM) issued an initiative calling for the promotion of fair competition and the healthy development of the new energy vehicle (NEV) market. The statement noted that despite the rapid growth of the NEV sector, the industry is experiencing a decline in profitability due to disorderly price wars. CAAM warned that companies should not sell vehicles below cost or disseminate false or misleading pricing information that could mislead consumers..
The situation escalated when one automaker launched a large-scale price-cutting campaign, triggering a wave of similar actions by competitors and causing panic in the market. Although the company was not named, it is widely believed to refer to BYD, the leading player in China's electric vehicle market. On May 23, BYD announced record price reductions. For example, the price of its Seagull hatchback was cut by 20% to $7,745. The largest discount was applied to the Seal hybrid sedan, whose price was slashed by 34%, also to $7,745.
Sources: CAAM, Xinhua,Bloomberg
Temu’s daily US users cut in half due to tariffs
The number of daily active users of the Chinese online marketplace Temu in the United States dropped by 58% in May. The sharp decline is linked to the revocation of the de minimis rule, which previously allowed duty-free entry of low-value shipments from China—a provision heavily relied upon by Chinese online retailers.
For years, Temu, along with fast fashion giant Shein, built a supply chain model in which goods were shipped directly from China to American consumers, bypassing customs barriers and enabling ultra-low prices. However, this strategy has been upended by the escalating trade tensions between China and the United States. According to HSBC, Temu is now offsetting its losses in the U.S. by expanding in other markets. Temu's growth in non-U.S. markets has picked up, with non-U.S. users rising to 90% of its 405 million global monthly active users in the second quarter.
Source: Reuters
Public Comments on the Draft Revision of the Provisions on Prohibiting Monopoly Agreements
SAMR has released a draft revision of the Provisions on the Prohibition of Monopolistic Agreements for public consultation. The draft improves the "safe harbor" framework for vertical anti-competitive agreements by introducing a combined "revenue benchmarks and market share thresholds" formula.
Under the proposed rules, for agreements involving resale price maintenance or minimum price restrictions, each party’s market share must be below 5%, and their annual revenue must not exceed $14 million. For other types of vertical anti-competitive agreements, the thresholds are set at a market share of less than 15% and annual revenue not exceeding $42 million.
Source: SAMR
Supreme Court rules that “non-compete” clauses are invalid
The Supreme People’s Court of China has issued a landmark ruling in an antitrust case, invalidating a restrictive clause in a contract between two Chinese chemical companies.
The dispute arose between Xingmoukang, a manufacturer and seller of formaldehyde, and Sanmouxiang, a distributor of formaldehyde. In 2021, the companies signed a supply agreement containing a clause that prohibited Xingmoukang from selling products to other businesses, bypassing Sanmouxiang. When Xingmoukang violated this clause, Sanmouxiang filed a lawsuit.
The court ruled in favor of Xingmoukang, stating that:
- Sanmouxiang and the alternative seller were effectively competitors in the local formaldehyde market;
- The challenged contract clause constituted an illegal horizontal agreement to divide the market;
- The clause restricted Xingmoukang’s freedom to choose trading partners and deprived end consumers of the right to select suppliers, which clearly restricted competition;
- The court rejected the plaintiff’s arguments regarding the commercial rationale behind the restrictions, emphasizing that protecting the competitive environment takes precedence over the private interests of individual companies.
Source:Weixin
Chinese Regulators Scrutinize Hutchison Ports Deal
Mediterranean Shipping Company (MSC) and BlackRock held talks with the Chinese antitrust regulator regarding the purchase of ports in Panama from CK Hutchison.
According to the Financial Times, citing informed sources, the parties are discussing a possible restructuring of the multibillion-dollar deal to obtain approval from both Chinese and American authorities. At the same time, a "Plan B" is being considered — the sale of some of CK Hutchison’s 10 ports in China.
A CK Hutchison representative denied this information, calling it "speculative." At the annual shareholders’ meeting on May 22, the company emphasized that the deal requires multilayered approvals and will be conducted strictly within the legal framework.
Sources: WeChat, Financial Times
