Antitrust law now easier for litigants

PUBLISHED : Friday, 11 May, 2012, 12:00am
UPDATED : Friday, 11 May, 2012, 12:00am

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A long-awaited judicial interpretation will make it easier for consumers or corporations to bring antitrust lawsuits, but legal professionals are not expecting a surge in litigation as major hurdles remain for those who try to sue mainland monopolies.

The first judicial interpretation of the anti-monopoly law, which itself came into effect in August 2008, took three years to pass because of multiple rounds of consultation, a Supreme People's Court spokesman said this week.

The interpretation confirmed that anyone affected by monopolistic behaviour could directly sue the company, without waiting for the government to first take administrative action. The changes also lower the evidence criteria that plaintiffs must fulfil before they can file a lawsuit.

The interpretation makes clear trade associations can be sued for setting up rules that restrict competition from other companies that refuse to join the associations.

Legal professionals are hoping the interpretation will give more teeth to the antitrust law, which since its enactment has generated plenty of media interest but few instances of companies being held to account for cornering a market.

Several government bodies have the task of with implementing the law: the Ministry of Commerce is in charge of reviewing big merger and acquisition deals, while the State Administration for Industry and Commerce (SAIC) handles complaints of abuses of dominance of market position and the National Development and Reform Commission (NDRC) monitors price-fixing.

While the Commerce Ministry made waves by blocking high-profile cross-border mergers such as when Coca-Cola tried to buy a local beverage company, the SAIC has failed to do much in the eyes of the public. The NDRC initiated its first investigation earlier this year, looking into alleged price-fixing by two state-owned telecoms companies.

The court spokesman said courts had handled 61 antitrust lawsuits. But legal professionals said only in one case had a small competitor won, and no consumers were successful with their claims.

Sheng Jiemin, a law professor at Peking University who specialises in antitrust issues, said one impressive element of the 16-clause judicial interpretation was its push towards collective lawsuits.

'China doesn't really recognise class action. But under this judicial interpretation courts are allowed to combine cases,' Sheng said. 'This is a combination of international experience and Chinese characteristics. It's a step in the right direction.'

He also hailed the greater role market experts were allowed to play in such litigation, which would make it easier for consumers and small competitors to bring a lawsuit.

But Wei Shilin, of Beijing's Dacheng Law firm, said that while the interpretation had helped address the imbalance in power between consumers and companies, it had not gone far enough.

'For example, in an earlier draft there was provision for punitive damages but in the final this is removed,' Wei said. Punitive damages would make a firm take the lawsuit more seriously and be more amenable to negotiating a settlement.

Wei said the interpretation was unlikely to greatly boost the number of antitrust lawsuits because of the overall legal environment.

'Small competitors remain reluctant to sue the dominating players in their industry because of the low success rate,' he said. 'And if they lose, they will not be able to continue in the industry because they have alienated the dominating players.'

Dong Zhengwei, of Beijing's Lianggao Law Firm, praised the clause specifying a citizen's right to sue a company before administrative action had been taken by the government. He said it bolstered the antitrust law's recognition of civil lawsuits as being in the public interest.

Btu he did not expect the interpretation to energise antitrust litigation either because most monopolising companies were state-owned.

 

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