In recent months, China's competition authorities have begun clarifying how they will enforce the new Anti-Monopoly Law 's broad prohibitions on abuse of a dominant market position and on agreements that eliminate or restrict competition. Draft rules, published for consultation purposes, indicate that China will take a unique approach on a range of issues relevant to the treatment of cartels, vertical restraints, and the conduct of dominant firms. Accordingly, all businesses with operations, sales or trading partners in China need to be aware of the distinct Chinese approach so they can appropriately adapt their trading practices and compliance policies in time for the ramp-up in enforcement activities that is expected in the coming months.
In this program, John Hickin, Andres Font Galarza and Gerry O'Brien discussed the scope of the new conduct rules in detail, with a particular focus on:
- The scope of business activities covered by the rules and the sectors that may face heightened scrutiny;
- China's unique regulatory approach to concepts such as unfair pricing, limitations on the development of new technology, and discriminatory terms;
- The implications of the developing rules for supply and distribution agreements, joint ventures, IP licensing, and other common business arrangements;
- The prospects for private actions, and the challenges defendants will face in relation to such actions; and
- Practical guidance on how businesses should deal with existing arrangements (such as long term supply contracts), and how to implement 'work arounds' or qualify for the relevant exemptions.
The panel also provided an update on China's merger control regime, and discussed recent high-profile decisions by the Ministry of Commerce in the context of concerns expressed by some stakeholders that the regime is being applied in a protectionist manner.
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