On 25 April, the Supreme People’s Court issued a draft Regulation on issues concerning the application of the law in hearing cases involving civil monopoly disputes for public consultation. Interested parties have until 1 June to submit their comments.
The draft regulation confirms the general principle of civil liability set forth in Article 50 of the Antimonopoly Law that parties shall be liable for any loss caused by their monopolistic conduct. It also clarifies procedural issues specific to civil proceedings instituted under the Antimonopoly Law, including the burden and standard of proof, matters of territorial jurisdiction, multi-claimant litigation and case consolidation, statute of limitations, and the relationship between the administrative and judicial enforcement processes. The Court also confirms that rights of civil action arise without having to wait for an antimonopoly agency to establish an infringement: both follow-on and stand-alone actions are permitted.
Concerning the burden of proof in civil Antimonopoly Law disputes, the draft regulation provides that plaintiffs must adduce evidence in support of their allegations relating to market definition and market power. It allows however the use of statements made by companies in their regulatory filings (including IPOs) as prima facie evidence of their market power. Concerning evidence of market power in particular, the draft regulation goes even further by reversing the burden of proof for public utilities (water, power, gas, etc.) and other operators providing their services under an exclusive licence. These companies will have to adduce evidence to the effect that they are not dominant on the market.
As regards the agreements and restrictive practices listed in Article 13 (horizontal practices) and 14 (vertical practices) of the Antimonopoly Law, the plaintiff will bear the burden of establishing the practice. However the burden of proof is reversed when it comes to establishing that the alleged practices have had the effect of eliminating or restricting competition.
The draft regulation contains the first substantive guidance from the Supreme People’s Court on the Antimonopoly Law. The Court issued a Circular on carefully studying and implementing the Antimonopoly Law in July 2008, but that circular was limited to establishing the jurisdiction of the intellectual property courts over Antimonopoly Law cases and directing judges to familiarise themselves with the law.
The lack of guidance from the Supreme People’s Court to date has not deterred parties from making claims based on the Antimonopoly Law. According to the Chinese legal press, 43 cases have been heard by courts of first instance between the entry into force of the law and the end of 2010.
The above is an excerpt from our monthly Competition Report. More detailed commentary on these issues and other recent competition law developments in the Asian region is to be found in this month’s edition of our report available on a free subscription basis (see further below).
Table of contents of our April 2011 report (Issue 29)
China Supreme People’s Court publishes draft regulation on private antitrust enforcement for consultation
Indonesia Courts uphold KPPU decisions in several bid-rigging cases
Indonesia Chevron investigated for bid-rigging practices
Indonesia Supreme Court upholds KPPU decisions in airport taxi licences cases
Japan JFTC raids Adidas for alleged resale price maintenance
Japan Firms sanctioned for their involvement in bid-rigging of civil construction projects
Japan JFTC issues revised merger guidance
Korea KFTC investigates large retailers for abuse of buying power
Korea Google faces allegations of leveraging its market power in mobile operating systems
Korea KFTC fines calorimeter manufacturers for bid-rigging
Korea Banking automation equipment manufacturers sanctioned for price fixing
Korea Twelve suppliers of greenhouse film sanctioned for price fixing
Malaysia Competition Commission established
Singapore Japan Airlines and American Airlines granted individual exemption
Annex Translation of the Supreme People’s Court’s draft regulation on private antitrust enforcement
|Read the full report - Please register if you are interested in subscribing to our monthly East Asia competition reports (free subscription).|