Merger Control 2019 | China

As the reader probably knows, the US Vitamin C cartel litigation, culminating in a judgment by the 2nd Circuit federal court on 20 September 2016, was a watershed case—not with regard to cartel law, but rather, whether the US courts had jurisdiction under the circumstances. The 2nd Circuit court overturned the decision of the federal district court by holding that the international law principle of comity prevented the assertion of jurisdiction.

In recent years, Ministry of Commerce of China (“MOFCOM”) stepped up investigations against non-notification. Before 2014 there was no penalty against non-notification. In 2014, 2015 and 2016 there were one, four, and six penalties imposed respectively by MOFCOM against non-notification. In the first six month of 2017, there were five penalty decisions published by MOFCOM. According to this trend, there could be over ten penalties to be released in 2017.

In the last year, there have been several measures and decisions by the European Commission and Courts which may pose antitrust risks for Chinese companies doing business within the European Union.

On February 2, 2016, the National Development and Reform Commission ("NDRC") released the Draft Guidelines on Commitments by Undertakings in Antitrust Investigation ("Draft Guidelines") on its official website, seeking public comments. The commitment scheme originates from Article 45 of the Anti-monopoly Law of China ("AML"), which provides, "with respect to the suspected monopolistic conduct of an undertaking under investigation by the Anti-monopoly Law enforcement Agencies ("AMEAs"), if an undertaking commits to adopt specific measures to eliminate the consequences of its conduct within a certain period of time, which is accepted by the said authorities, the said authorities may decide to suspend the investigation."

In August 2010, Rainbow filed an anti-monopoly lawsuit to the Shanghai No. 1 Intermediate People's Court ("Intermediate Court"), alleging that Johnson & Johnson set a minimum resale price for surgical sutures in their distribution agreement, violating Article 14.2 of the Anti-monopoly Law of China ("AML"). The hearing was conducted by Shanghai Intermediate Court on February 3, 2012. On May 18, 2012, the Intermediate Court issued a judgment and dismissed all Rainbow's claims.