Tale of Two Cases: Chinese Courts Will Proceed Cautiously With Anti-Monopoly Law

The enactment of China's Anti-Monopoly Law (AML) in August 2008 was a significant step for a country edging ever closer to a truly modern economy.

In many ways, the AML follows the lead of the American and European antitrust regimes by providing broad guidelines regarding abuse of dominance, cartels and merger review. The statute also gives private parties (as well as the government) a right of action against offenders.

In China Mobile, a consumer sued his state-owned cell phone company, the largest mobile provider in the world, for abusing its dominant position. Alleging that the network charged multiple fees for substantially similar services, he sought to recover his mobile fees for the past two years. The parties settled the case in October 2009 for an amount slightly less than what the plaintiff had claimed.

Shortly thereafter, the Beijing High People's Court published a regulation, Hierarchical Jurisdiction over Cases of the First Instance of IPR [intellectual property rights] Disputes. The regulation stated that AML-related IPR disputes under the court's jurisdiction would be tried by the Beijing municipal intermediate courts rather than district courts. While this initial regulation is limited to IP-related AML disputes, commentators expect that as further cases arise that are not in the IP-context, they will also likely be transferred to the intermediate court under a future regulation. They point to the fact that the Specialized AML Panel established by the Shanghai No. 2 Intermediate Court has announced that the intermediate courts in its jurisdiction would preside over all first instance private disputes with an AML component.

Alternatively, even if Sursen established Shanda's dominant market position, Shanda's conduct was justified to prevent the plaintiffs from misleading the public by inducing it to believe that the original work and the unauthorized sequel had been written by the same authors.

It was therefore reasonable for Shanda to order the new writers to stop publishing, and the existence of valid justification for that conduct precluded a finding of abuse.


Julius Melnitzer

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