On November 10,2020,on the eve of the Double 11th Day,the State Administration of Market Supervision issued the"Anti monopoly Guidelines on the Platform Economy(Draft for Comments).".On February 7,2021,the Anti monopoly Committee of the State Council officially released the"Anti monopoly Guidelines for the Platform Economy".

On April 10,2021,in response to the case of Alibaba suspected of"abusing its dominant market position",the State Administration of Market Supervision and Administration issued the"Decision of the State Administration of Market Supervision and Administration on Administrative Penalties",which included suspending the"two choice"behavior and imposing a sky-high fine of 18.228 billion yuan.This is the highest amount of administrative penalty since the introduction of the Anti monopoly Law,and some media have also evaluated it as the beginning of a"new cycle of anti monopoly".

In this situation,how to interpret the case,and whether it will lead to civil litigation,as well as how to do a good job of anti monopoly law compliance in the new cycle?On April 19,2021,Gaopeng Law Firm held an online lecture.The following is a transcript of the lecture,which was approved by the author at the time of publication.

The following is based on the recording of the lecture

Lecture Guests

A Deep Interpretation of the Administrative Penalty Decision in the Case of Ali Abusing Market Dominance,Partner of Gaoliang Gaopeng Law Firm

Jiang Liyong,Senior Partner of Gaopeng Law Firm,and Member of the Anti monopoly Professional Committee of the Beijing Lawyers Association:A Hot Interpretation of Anti monopoly Civil Litigation in the Context of the Ali Case

Tan Yajun,Senior Partner of Gaopeng Law Firm,Deputy Director of the Anti monopoly Professional Committee of the Beijing Lawyers Association,Analysis of the Construction of Anti monopoly Compliance Work in the Context of the Ali Case

Lawyer Jiang Liyong(Moderator):

Today,it is a great honor to have this opportunity to hold a special seminar on the interpretation of Alibaba's antitrust case and related hot issues of civil litigation and compliance.

The first thing I want to say is that because Ali's anti monopoly case has just been introduced recently,I think everyone,like us here,may be very eager to learn about the specific content of this case.The administrative penalty decision document also contains a lot of content.If you read and understand it all,it will take a lot of time for everyone.

In addition,I think the most important thing is,what is the significance of Ali's case and what inspiration can it give us?What are the implications for us in terms of offensive or defensive activities,as well as corporate compliance?Therefore,based on this consideration,we held this seminar.

This meeting is also open.We are not only open to the interior of the office,but also to the public.About fifty or sixty listeners from different backgrounds have signed up to participate in our conference,and there are no restrictions on their identities,including lawyers,legal affairs,and industry.Because it is a topic of choice,we do not choose between legal affairs and lawyers.

It is a great honor to have three speakers at this meeting today.The first is Lawyer Gao Liang,the second is myself,and the third is Lawyer Tan runner-up.So the first guest to share with you is lawyer Gao Liang.

Lawyer Gao has worked in different law firms both at home and abroad.It is particularly worth mentioning that he once practiced in Brussels and has a relatively deep understanding of EU antitrust law.In addition,Lawyer Gao has also studied civil procedure law and antitrust law at Salle University and Renmin University in Germany.Today,first of all,Lawyer Gao will conduct an in-depth interpretation of the case itself and the administrative penalty decision on Alibaba's abuse of market dominance.So first of all,I'll give the microphone to lawyer Gao,who can share your desktop.

Lawyer Gao Liang shares

"Deep Interpretation of Alibaba's Administrative Penalty Decision on the Abuse of Market Control Case"

First of all,I would like to thank Lawyer Jiang for his introduction.I am a partner of Gaopeng Law Firm.I have been engaged in antitrust business since 2010.I first worked at a British law firm in Brussels and have been engaged in this business since returning home.Today,I will be the first to speak on the interpretation of Alibaba's administrative punishment case for abusing its dominant market position.

First of all,let me give a background introduction to the"one out of two"business model.The business behavior of"choosing one from two"is not a new antitrust topic.As early as 2014,the Supreme Court involved the legal determination of the behavior of"choosing one from two"in the case of Qihoo 360 Company v.Tencent Company's abuse of market dominance(instant messaging software and service related markets).In this case,Tencent requested users to choose between Tencent QQ and Qihoo 360,resulting in a large number of users deleting Qihoo related software.In this case,the Guangdong High Court rejected all of Qihoo's litigation claims,and Qihoo appealed to the Supreme Court.The Supreme Court held that although Tencent had a market share of 76.2%in the relevant market,the Supreme Court still believed that Tencent did not have a dominant market position in the relevant market,and therefore,there was no problem of abusing its dominant market position in the"one out of two"behavior.Therefore,the appeal was rejected and the original judgment was upheld.For Tencent,the final judgment of the Supreme Court is equivalent to confirming the legitimacy of the"one out of two"business model.According to the information disclosed in the administrative penalty decision of Alibaba's abuse of market dominance case that will be discussed next,Alibaba's one-of-a-kind commercial behavior has already begun in 2015.We have reason to believe that the final judgment of Qihoo 360 v.Tencent has a great inspiration for Alibaba's legal and commercial team.In addition to the Anti Monopoly Law,the"one out of two"business model may also involve issues related to the Anti Unfair Competition Law,especially Article 12 of the Internet Clause of the Anti Unfair Competition Law.

In addition,in addition to the Anti Monopoly Law,the"one out of two"business model may also involve violations of Article 12 of the Internet Special Article of the Anti Unfair Competition Law.By the way,I would like to mention a recent related case for your reference.On March 15th this year,the Huai'an Intermediate People's Court of Jiangsu Province issued a judgment on Meituan's unfair competition behavior(forcing merchants to"one out of two"behavior),This case is the first application of Article 12 of the Anti Unfair Competition Law of the People's Republic of China,which came into effect on January 1,2018,as a case of infringement of unfair competition in the field of takeout.It mainly involves Article 12,paragraph 2,forcing users to modify,shut down,or uninstall network products or services legally provided by other operators,and maliciously implementing incompatibilities with network products or services legally provided by other operators.Finally,Meituan was awarded 352000 yuan as compensation for"Hungry?".Due to the different calculation basis,compared to the anti monopoly law,the punishment intensity of the anti unfair competition law is much smaller.The"two choice"behavior regulated by the Anti Unfair Competition Law does not require the determination of whether the operator has a dominant market position,and determining whether the operator has a dominant market position is precisely one of the most difficult and complex parts of antitrust abuse cases.In this case of abuse of market dominance by Alibaba,the determination of Alibaba's market dominance in relevant markets by the Anti monopoly Bureau may open up new ideas for future anti monopoly litigation.

Next,let's get to the point.I will analyze this case through six parts.The first part is about the definition of the relevant market,the second part is about whether it has a dominant market position,the third part is about whether it abuses its dominant market position,the fourth part is about legal effects,that is,whether it has the effect of eliminating and restricting competition,the fifth part is about evidence,and the sixth part is about the decision and basis for administrative punishment.

The first part is related markets.In this case,the relevant market defined by the General Administration is the online retail platform service market in China.The online retail platform service market refers to the services provided by operators of online retail platforms,including Alibaba,Tencent,and others,such as online business venues,transaction matchmaking,and information publishing for commodity transactions between operators and consumers within the platform.The online retail platform is a typical bilateral platform,with merchants and consumers serving both groups.

The definition of the relevant market is carried out from the following sections.The first section is an alternative analysis.

Firstly,the General Administration believes that the online retail platform service market is different from the offline retail commercial service market,and there is no substitute relationship.The General Administration starts from three perspectives:the first is operator demand substitution,the second is consumer demand substitution,and the third is supply substitution.

The first point is operator demand substitution:

First,the coverage area and service time are different.Generally speaking,the geographic coverage and service time of online retail platforms,that is,e-commerce,are far superior to those of offline platforms.Generally,offline platforms are limited by geographical location and physical location,so the geographic coverage is relatively limited,and the service time is also different.Offline retailers need to close down,but online platforms may not need to,because they mainly rely on online communication and can provide services at any time.

Secondly,the composition of the operating costs of the operators they serve is different.The offline retail commercial service market is a virtual platform market with lower operating costs compared to the online service market.

Third,the ability of supporting operators to match potential consumers is different.Because e-commerce platforms can use technical means such as big data analysis and algorithms to summarize and analyze market demands such as consumer preferences,and provide data portraits for consumers,enabling businesses to accurately match target customers,thereby conducting accurate marketing,enabling products to quickly match consumer needs.This is something that offline retail commercial services cannot achieve,so there is a difference between the two.

Fourth,the efficiency of market demand feedback provided by operators is different.Generally speaking,e-commerce platforms reflect higher efficiency.

The second point is that consumer demand substitution is different:

First,the range of products available to consumers varies.The scope of e-commerce platforms is broader than that of offline retail.

Secondly,the degree of shopping convenience provided to consumers varies.Online shopping will be more convenient,and consumers can click online to make purchases without going out.

Thirdly,the efficiency of online sales platforms is much higher than offline retail for consumers to compare and match products.

The third point is supply substitution:

First,the profit model is different.For Alibaba,Alibaba e-commerce mainly makes profits through two ways:one is to collect transaction commissions,and operators within the platform must pay corresponding commissions for each transaction,which is their first source of income;The second is advertising expenses,which are called marketing promotion expenses in professional terms.They rely on these two points to make profits.This is different from offline retail business services,which mainly charge fixed store rents to operators,so the profit models of the two are different.

Secondly,it is difficult to transform offline retail commerce into online retail platform services.The transformation requires high capital and technology costs.Few offline retailers can switch to e-commerce service platforms,which are basically controlled by several major e-commerce platforms.Few offline retail business platforms in the ordinary sense can compete with online platforms.

Therefore,from the above three perspectives,online retail platforms and offline retail platforms are different.

Secondly,the General Administration believes that online retail platform services constitute a separate related commodity market.

The first point is that the online retail platform services provided to different categories of operators belong to the same related commodity market.On this point,Alibaba was arguing that the relevant commodity market should be defined as the B2C online retail platform market,rather than the ordinary online retail platform service market.Finally,the General Administration did not accept its opinion.The English name for B2C is Business to Customer,which refers to businesses providing services to individual consumers.C2C refers to Customer to Customer,which refers to sellers selling to individuals providing services to individual consumers.However,from the perspective of the General Administration,there is no significant difference between the two,and there is basically no difference in the conversion between them.Therefore,it is unnecessary to separately define the relevant market of this case as the B2C online retail platform service market.

The second point is that the online retail platform services provided for different commodity sales methods belong to the same related commodity market.It is mainly divided into two aspects:traditional e-commerce services and emerging e-commerce services,mainly including live streaming,short video images,and so on.They are all operated on online retail platforms,so they both meet and meet shopping needs,so there is no need to further distinguish between different commodity sales methods.

The third point is that the online retail platform services provided for different commodity categories belong to the same relevant market,which is not necessarily differentiated.For example,it is possible to sell shoes,clothes,and televisions online,which can be operated online.Therefore,it is not necessary to establish a separate market for related commodities due to different categories of commodities.

Therefore,according to the view of the General Administration,the online retail platform market can constitute a separate related commodity market.

Next,define the relevant regional market.Regarding the definition of the relevant regional market,the General Administration defines it as the Chinese market,which is analyzed from the following four aspects.

The first point is operator demand substitution analysis.That is,if an operator intends to sell goods to consumers in China through online retail platforms,they generally choose domestic online retail platforms.

The second point is consumer demand substitution analysis.Domestic consumers in China usually purchase goods through domestic online retail platforms,and generally do not use overseas online retail platforms as an alternative to purchasing goods.Although there are platforms like Amazon,the proportion is very low.Most consumers in China shop through domestic e-commerce platforms,due to barriers in terms of language,tariffs,currency types,and after-sales services.For example,if you purchase products through overseas e-commerce,their after-sales service may be very troublesome,and the seller may not be in China.What if there is a problem with the quality of the product,Communication with foreign merchants is also very expensive,so for some consumers in China,they generally prefer to shop through domestic e-commerce platforms.

The third point is supply substitution analysis.To conduct business in China,overseas online retail platforms need to apply for business licenses in accordance with relevant laws and regulations,and also need to establish logistics systems,payment systems,data systems,and other facilities required to conduct business.Therefore,it is difficult for some overseas online e-commerce platforms to enter the domestic market in a timely and effective manner,so Amazon's market share in China is not very high.Therefore,it is difficult for overseas e-commerce to form competitive constraints on e-commerce platforms within China.

The fourth point is that the online retail platform services provided for different regions within China belong to the same relevant regional market.Because the network is unrestricted,it can be conducted nationwide to provide services to operators and consumers nationwide,and there are no significant differences in regulatory policies for online retail platform services across the country,such as in Beijing,Shanghai,and Shenzhen.

From these four perspectives,the General Administration believes that the relevant geographical market for this case is the domestic market in China.

The second part is about market dominance,that is,whether Alibaba has a dominant market position.When determining whether Alibaba has a dominant market position,the General Administration considered many factors and ultimately determined that Alibaba has a market position in the relevant market,namely,the online retail platform service market in China.The main reasons are as follows.

The first point is market share.I have listed some data.From 2015 to 2019,both in terms of platform service revenue and platform commodity trading volume,its market share exceeded 60%,and some even reached 80%.Generally speaking,according to the relevant provisions of the Anti monopoly Law,if a commodity's market share in the relevant market exceeds 50%,it can be presumed that it has a dominant market position.Although market share is not the only factor determining whether it has a dominant market position,market share itself is very important.From this point of view,its market share in the relevant market is over 50%.

The second point is that the concentration of the relevant markets is very high,which means that there are few competitors.Through two indexes,which are the concept of economics,HHI is the Herfindal-Hechman index,and the second is the CR4 index,which is called concentration ratio in English.The concentration index also determines the market concentration in the relevant market.If the number is higher,it means that the number of market competitors is smaller,and it also means that the market competition intensity is lower,In this way,you can see that Alibaba's platform service revenue accounted for the highest proportion of 86.07%in 2015,and the lowest proportion was 71%in 2019.The corresponding HHI index in 2015 was the highest,with a figure of 7408,which is relatively high compared to 5350 in 2019.Therefore,the higher the number,the higher the market concentration.The same is true for the CR4 index,which was 99.68 in 2015 and 98.45 in 2019,which is somewhat lower,but the market concentration is still very high and the number of competitors is relatively small.Therefore,in the past five years,Alibaba's market share has been relatively stable and has maintained a relatively strong competitive advantage for a long time.Other competitive platforms have limited competitive constraints on it.This is based on two sets of data,one is economic data,and the other is market share data to determine that Alibaba has a dominant market position.

The third point is that Alibaba Group has strong market control.Mainly reflected in three aspects:

First,Alibaba has the ability to control service prices.Control of service prices is mainly achieved through format contracts.Due to Alibaba's strong market dominance,the bargaining power of operators within the platform is relatively limited when signing contracts,and they will basically sign according to Alibaba's format contracts.Therefore,Alibaba is believed to have a strong ability to control service prices.

Secondly,Alibaba has the ability to control the flow of operators within the platform.This is mainly about search rankings and the location of platform displays.Alibaba determines the search rankings of operators and their products within the platform and the location of platform displays by formulating platform rules and setting algorithms,thereby controlling the traffic available to merchants,which in itself has a certain decisive impact on this merchant.If it places the ranking of merchants very low through platform settings,consumers will not be able to find it easily or consume it easily,which will have a significant impact on the sales of merchants'products.From this perspective,Alibaba has strong control over merchants,especially traffic control.

Thirdly,Alibaba has the ability to control the sales channels of operators within the platform.Mainly from two platforms,Taobao and Tmall,because the amount of transactions between these two companies on e-commerce platforms exceeds 50%.Therefore,it is able to control sales channels.

The fourth point is that Alibaba has strong financial resources and advanced technical conditions.From a financial perspective,based on disclosed data,Alibaba's market value reached 4.12 trillion yuan by the end of 2020,and its financial resources are very strong.In addition,Alibaba has a first-mover advantage in entering the e-commerce platform service market.It has accumulated a large number of customers,merchants,and consumers,and has a large amount of transaction,logistics,and payment data.And Alibaba has its advanced algorithms,which can achieve personalized search through data processing technology.The sorting itself and algorithms are very important.

The fifth point is that other operators rely heavily on Alibaba for transactions.Mainly reflected in three aspects:

First,the Alibaba Group platform has a strong network effect and lock-in effect on operators within the platform."Because there are a large number of consumer users in the Alibaba platform,and consumer user stickiness is strong,this means that if you use the Alibaba platform,you will not easily switch to other platforms.".According to relevant data,its retention rate across years,that is,the probability of remaining on this platform,reaches 98%.Therefore,it is difficult for Alibaba's merchants to abandon the huge consumer base and huge traffic on the Alibaba platform,thus relying heavily on Alibaba's e-commerce platform.This is what we call the professional term"network effect and locking effect".

Secondly,the Alibaba Group platform is an important channel for brand image display.There is no doubt that Alibaba is a leading entity in the industry,so its platform display is very important and also very attractive for businesses.

Third,the cost of switching operators within the platform from the Alibaba Group platform to other platforms is high.Because users and data are important,it is difficult to migrate resources and intangible assets to other competitive platforms,especially in the case of"one of two".If its customers and consumers mostly rely on Alibaba's platform,it will be very difficult for it to transfer to other platforms,because its customers are highly viscous and they will not follow the merchants.Therefore,the result of this situation is that businesses rely more on Alibaba's platform.

The sixth point is that it is very difficult to enter the relevant market.The cost of entering relevant markets is high because it requires capital construction,logistics system payment systems,and technical support.Therefore,for other competitors,it is relatively difficult to enter relevant markets,and network effects are difficult to achieve.As mentioned earlier,Alibaba has formed a strong network effect and locking effect,and it already has a first mover advantage.If a new competitor wants to enter this industry,enter e-commerce platforms,and compete with Alibaba,its network effect is very small,and it is difficult to compete with Alibaba.Alibaba has already occupied a first mover advantage.

The seventh point is that Alibaba has significant advantages in the related market.The connected market will directly affect the e-commerce platform,including logistics payment system,Alipay,logistics system,cloud computing,etc.The connected market will also have a considerable impact on the related market.

Through these seven points,the General Administration finally determined that Alibaba has a dominant market position in the relevant markets.

The determination of market dominance is very important in itself.One important reason for losing a lawsuit in many abuse cases is that it is difficult to identify a dominant market position,while abuse itself is relatively easy to define.

The third part is the abuse of market dominance.

Alibaba mainly implements the following three behaviors:

The first option is"one out of two",which prohibits Alibaba merchants from opening stores on other competitive platforms,especially for core merchants,whose businesses are divided into many categories.The core merchants we are talking about are operators at or above the KA level,and they are directly stipulated in the agreement that they cannot open stores on other competitive platforms.If you choose,I cannot choose them,which is one out of two.This is directly stipulated in the agreement in written form,and there is also an oral form,which orally states that it is not allowed to open stores on other competitive platforms.Through the investigation of the General Administration,Alibaba's request has been well implemented,and businesses on general platforms also comply with relevant promises and agreements.

The second is to prohibit Alibaba merchants from participating in promotional activities on other competitive platforms.The typical promotional activities are"Double 11"and"618"activities.It also includes two methods.One is to directly stipulate in the agreement that you cannot participate in other competitors'platform promotional activities.The second is oral communication,which explicitly or implicitly suggests that one cannot participate in promotional activities on other platforms.After investigation,this has also been well implemented.

The third is to adopt various rewards and punishment measures.It doesn't just depend on how the agreement stipulates.There are rewards for doing well,and penalties for not doing well.Adopting multiple reward and punishment measures is a deterrent,a behavior that ensures that one of two can be implemented.The reward is mainly traffic support,enabling more display of products and obtaining more traffic.Penalties mainly include the following aspects.One is to reduce resource support for promotional activities.The second is the subsequent disqualification from participating in promotional activities.If you violate relevant agreements and the"one out of two"commitment,you may be blacklisted,making it difficult to participate in promotional activities after being blacklisted,which directly affects revenue and profits.The third is to implement search right reduction,which is also very important,because search right reduction means affecting your ranking on the platform.Through algorithm and technical operation,it can make the ranking of merchants on the platform lower or even impossible to be searched.If it cannot be searched,it is impossible for consumers to buy your goods,which will directly affect the economic interests of merchants.The fourth is to cancel other important interests on the platform,such as canceling KA qualifications,terminating relevant cooperation,and depriving them of significant rights and interests such as related service guarantees.This punitive measure ensures that the"one out of two"business model can be specifically implemented,which is a specific act of abuse.

When determining the abuse of market dominance,Alibaba raised its own defense.Alibaba believed that the cooperation agreement was voluntary by the merchant,so it was not mandatory.It proposed that this was a legitimate defense,believing that it gave the merchant unique resources as consideration,which was an incentive measure,and had legitimate reasons.

This was a legitimate defense raised by Alibaba at the time,but ultimately the General Administration did not accept this defense for the following three reasons:

First,most cooperation agreements that contain"one of two"content are either intra platform operators or businesses that operate freely,because businesses tend to cooperate on multiple platforms from a more commercial perspective.Because multi-platform cooperation means that their products can be displayed on more platforms,which means that they can generate more operating income and profits,the General Administration believes that the reason for businesses to sign voluntarily is difficult to establish.

Secondly,some operators in the platform have not received consideration for executing the oral requirements of the parties.

Third,exclusive trading is not necessary to protect specific investments.There are other ways to protect specific investments,and there is no need to resort to a"one of two"approach.

Through the above three points,the General Administration finally determined that Ali's defense reasons were not established.

The fourth part is the consequences of behavior.In addition to having a dominant market position and abusing it,it also depends on what legal consequences it produces to exclude or restrict competition.

The General Administration believes that Alibaba's restrictions on other platforms to open stores or participate in promotional activities on other competitive platforms have created a lock-in effect,reducing its own competitive pressure."By not allowing others to open stores on other competitive platforms,we maintain and consolidate our dominant market position,eliminate market competition,harm the interests of operators and consumers within the platform,and weaken the innovation motivation and development vitality of platform operators.".The main consequences are as follows:

The first aspect is to exclude and restrict competition in the online retail platform service market in China.It mainly includes two points:first,it excludes and restricts fair competition between operators in relevant markets;The second is to exclude and restrict potential competition in relevant markets.

The second aspect is to harm the interests of operators within the platform.First,Alibaba's behavior has damaged the business's operational autonomy,and it has no operational autonomy but can only cooperate with Alibaba.Secondly,Alibaba's improper behavior has impaired the legitimate interests of operators within the platform,mainly economic interests.Thirdly,Alibaba's behavior weakens the level of competition within the brand,as products can only be placed on one platform,while products cannot be placed on another platform.There is no competition between different platforms,which can damage the level of brand competition.

The third aspect is that it hinders the optimal allocation of resources and restricts the innovative development of the platform economy.First,Alibaba's behavior hinders the free flow of production factors,reducing the efficiency of resource allocation.Secondly,Alibaba's behavior limits the diversified and differentiated innovative operation of operators within the platform.Thirdly,Alibaba's behavior inhibits the vitality of market entities and affects the innovative development of the platform economy.

The fourth aspect is to harm the interests of consumers.The main interest of consumers is to restrict their free choice and fair trade,which in the long run will potentially harm the overall welfare level of society.

The fifth part is evidence.Evidence is still important for operators.It can be seen from which perspective the General Administration seeks evidence to prove its market dominance and how it misuses it.

As you can see,when defining the relevant market,the main documents are the financial reports of the parties concerned,the minutes of the president's meeting,internal nail group chat records,work summaries,relevant personnel investigation and inquiry records,and competitive platforms and relevant personnel investigation and inquiry records of operators within the platform.

Evidence for determining market dominance mainly includes documents such as parties'financial reports,work summaries,and agreements signed with some platform operators,as well as statistical data from national statistical departments,third-party agency statistics,survey and inquiry records of relevant personnel of platform operators,competitive platform business data,and survey and inquiry records of relevant personnel.

The evidence for determining the abuse of market dominance mainly includes investigation and inquiry records of relevant personnel of the parties concerned,internal nail group chat records,emails,cooperation agreements signed with some operators on the platform,development plans of various business departments,work summaries,"Double 11"and"618"investment promotion rules,conference briefings,and other documents,self-inspection reports of the parties concerned,and investigation and inquiry records of relevant personnel of competitive platforms and operators on the platform.

The evidence of behavioral consequences mainly includes the development plans of each business department of the parties,competition strategies,work summaries,internal nail group chat records,e-mail and other documents,self inspection reports of the parties,and investigation and inquiry records of relevant personnel from competitive platforms and operators within the platform.

Therefore,the most important aspect of compliance is email.Internal email,chat records,and third-party agreements may become the core points of an investigation,and will become a more important aspect of operator compliance in the future,as these are also the core evidence directions for the General Administration to conduct antitrust investigations.

The last part is administrative punishment.Administrative punishment is clear to everyone,which means that in this case,there are two main things that have been done:one is to order the cessation of illegal acts,and the other is to impose fines.

Because the relevant geographical market of the relevant market is defined in China,the penalty is 4%of the domestic sales volume of 455.712 billion yuan in 2019,totaling 18.228 billion yuan.In addition to this,it is necessary to submit a self inspection compliance report to the General Administration for three consecutive years,and the General Administration has issued an administrative guidance letter to Alibaba,which requires Alibaba to strengthen its internal compliance work.Its legal basis is Article 17,Paragraph 1(4)of the Anti monopoly Law,which states that"without justifiable reasons,the counterparty can only conduct transactions with it.".

That's all I have to say.Thank you all.

Zhang Bo(host):

Okay,thanks for lawyer Gao Liang's wonderful interpretation just now.So let's invite Mr.Jiang Liyong,a senior partner of Gaopeng Law Firm and member of the Beijing Lawyers'Anti monopoly Professional Committee,to bring you a hot interpretation of the anti monopoly civil litigation in the context of the Ali case.

Lawyer Jiang Liyong is a partner of Gaopeng Firm.Before joining Gaopeng Firm,Lawyer Jiang had served in the Department of Legal Affairs of the Ministry of Commerce of the People's Republic of China and the Law Firm of Jindu,with a profound legal professional background and rich work experience.

Lawyer Jiang has also been appraised by Chambers as one of the outstanding antitrust and competition law lawyers in Chinese Mainland for many years.Chambers'comment on Lawyer Jiang is that the lawyer is very familiar with the antitrust law business and has profound insights.Lawyer Jiang previously graduated from Peking University and Oxford University in the United Kingdom,where he received a master's degree in law.So let's start with Lawyer Jiang.

Lawyer Jiang Liyong shares

"Deep Interpretation of Alibaba's Administrative Penalty Decision on the Abuse of Market Control Case"

I am very glad to have this opportunity to share with you some topics of antitrust civil litigation in the context of the Ali case.In fact,I have talked about many topics related to antitrust in the past,but I have not talked much about civil litigation related to antitrust.In the past,I mainly talked about two aspects,the first being concentration of business operators.It is estimated that about 60%of the lectures I have given in the past have focused on business concentration.40%is about compliance.But there is not much talk about antitrust litigation,and why?Mainly based on a market judgment.We believe that the number of antitrust litigation cases will not be too large,and the proportion of the total cases is relatively small.As you can see,the number of antitrust civil lawsuits in recent years has only exceeded 700.But compared to the total number of civil lawsuits in China as a whole,it is too small.

There are very few judges who have actually tried antitrust cases,and the lawyers who represent antitrust civil litigation are actually only in single digits.In most cases,the defendant wins the lawsuit and the plaintiff loses.Therefore,if I represent the defendant and say that I have won the lawsuit,I don't think there is anything particularly worth showing off,because in the entire antitrust civil litigation,the proportion of plaintiffs losing the lawsuit is very high,about 90%.Compared with other types of cases,the proportion of plaintiffs losing the lawsuit is very high.

But why should we talk about antitrust civil litigation at this time point?"Because we believe that after the Ali case came out,it represented a change in direction.".In fact,as we all know,Chinese Internet companies have a choice of two.It's not just a day or two,it should have a history of more than 10 years.Many enterprises and individuals have repeatedly reported one of the two Internet companies.But the Anti monopoly Bureau has not investigated.However,last year in 2020,the investigation of Alibaba began.Alibaba only had four months to go from filing a case to administrative punishment.Therefore,considering the entire Alibaba case,including the central government's decision to delay the listing of Ant Financial Services,we believe that it represents a new stage in China's antitrust law enforcement.

Therefore,in this situation,it is of special significance for us to reanalyze the compliance of antitrust,whether it is litigation or litigation.Because in the current situation,it may mean more market opportunities for lawyers.So for legal affairs,the legal risks of antitrust may have been just discussed in the past,right?Everyone believes that in fact,in China,the compliance of anti monopoly laws,or the risk of civil litigation,is not as great.However,this time,the amount of a sky-high administrative penalty far exceeds that of the Qualcomm case,making it the largest administrative penalty for antitrust in history.

In this case,we feel that discussing Ali's civil lawsuit has a special significance.First of all,the legal basis for antitrust civil litigation is derived from Article 50 of the Anti monopoly Law,which is actually quite simple.He said that if an operator commits a monopolistic act and causes losses,he shall bear civil liability according to law.What is the premise for this?First of all,it presupposes loss,right?If you want to file a civil lawsuit and you say that I have no losses,even though the other party has implemented a monopolistic act,but has not caused a loss to you,then you may not be a qualified plaintiff.Let me take an example,for example,Abbott Laboratories was imposed administrative penalties due to its monopoly on milk powder.At this time,you bought a bottle of milk powder at Carrefour.Are you a qualified plaintiff?In the past,there was a case where the consumer bought a set of Abbott milk powder in Carrefour's Shuangjing store.He said,"You see,Abbott has been investigated and belongs to such an object of administrative punishment,so I don't need to prove that he has implemented monopoly behavior.".I have suffered losses due to monopolistic behavior,so I have to sue.In this case,although the consumer ultimately lost the lawsuit,the court basically recognized the consumer as a qualified plaintiff.

The antitrust investigation authority has now determined that Alibaba's implementation of one of two options constitutes an abuse of market dominance.However,for sellers operating on Alibaba,can they file a civil lawsuit claiming that they have increased their operating costs due to choosing between two,and therefore claim compensation for losses?In addition,can consumers also file a lawsuit claiming that the goods I purchased on Taobao might be cheaper if there was no one choice,but now they are more expensive?

Among these,we will find at least two floors,one for dealers and the other for consumers.Some foreign countries divide it into direct transaction counterparties and indirect transaction counterparties.It is also believed that only the direct counterparty has the right to file a civil lawsuit,but not the indirect counterparty.However,such a conclusion cannot be drawn from China's anti monopoly law."Because Article 50 of the Anti monopoly Law only states one situation,if losses are caused to others,they shall bear civil liability according to law,but it does not distinguish between direct and indirect.".

But the question arises,how can you prove that you have suffered a loss?I don't even know how much milk powder used to cost,do I?What losses did he cause me and how much was the loss?How much should he pay?In particular,some monopolistic behaviors exist at the beginning,making it difficult to compare situations where monopolistic behaviors do not exist.It is also difficult to assume how much the plaintiff would have benefited if there had been no such conduct.

Therefore,we believe that both direct counterparties and indirect counterparties should be qualified plaintiffs.But the more indirect,the harder it is to prove the loss.Therefore,even with procedural litigation rights,winning a lawsuit will be very difficult.

The Supreme Court is still interested in the anti monopoly law,because in 2008,the Supreme Court issued a notice as soon as possible to seriously study the Anti monopoly Law.However,this notice itself does not have much dry goods,and everyone can skip it.

The second is judicial interpretation,the full name of which is"Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Disputes Caused by Monopoly".The main cases to date have also cited judicial interpretations.

The next step is jurisdiction.As you know,the Supreme Court has made significant adjustments and reforms to jurisdiction in the past two years.I think it may be that if the old practicing lawyers have not been following them all the time,they may not even know who is in charge of the case now.As for anti monopoly law,the highest court is placed under the jurisdiction of the middle court.Regarding jurisdiction,I think the commendable thing is Article 5.According to Article 5,if the case is not a monopoly dispute at the time of filing,for example,it is an ordinary breach of contract lawsuit,but the defendant raises a defense against the plaintiff's monopoly behavior and provides evidence,the case needs to be transferred to a court with jurisdiction.For example,cases accepted at the grassroots level should be transferred to the Intermediate People's Court.In practice,this has great significance for the defendant.The above provisions can be used to make necessary adjustments to the level of jurisdiction,and also technically prolong the litigation process and delay the time.

"I don't think there is much difference between the provisions of the anti monopoly law and the anti unfair competition law on civil litigation.".However,there is a difference between the two.The antimonopoly law does not stipulate who should have priority if both administrative penalties and civil litigation are filed.However,the Anti Unfair Competition Law clearly stipulates that civil litigation should take precedence.However,it is still difficult to coordinate in practice.

It is always difficult for China to do something from the bottom up.Over the years,we have fought hundreds of cases,with a winning rate of less than 5%.However,with the help of the General Administration,more than 18 billion yuan went to the national treasury.

Of course,countries around the world are also similar,that is,the power of administrative law enforcement agencies is expanding.However,in China's antitrust civil litigation,there is no such provision for punitive damages of three times the compensation in the United States,nor is there a class action litigation system.Although there are provisions for public interest litigation,it is very difficult to implement.First of all,from the perspective of motivation,for associations,it is necessary for leaders to agree and be willing to promote civil litigation.In addition,from a resource perspective,associations may also lack the necessary resources and costs to promote civil litigation.Therefore,it is relatively difficult to implement.

So I suggest that we can refer to the same approach as securities litigation in antitrust litigation,such as having a consumer protector center to represent,or allowing lawyers to more conveniently represent class actions.If class action litigation develops,some lawyers may not be willing to stay in large institutions.Because there are many conflicts of interest in Alibaba,Alibaba is my customer,and Tencent is my customer.How can you possibly sue a customer?Some lawyers may go to small institutions to represent class action lawsuits,and then sue large companies.After the lawsuits are completed,they can profit through risk agency.Although these assumptions are not allowed by the current civil litigation system,we may see this day in the future,and I think there should be some.

Although there are 700 civil antitrust litigation cases according to statistics,there may be fewer real antitrust cases.Because some disputes over domain names are also established in accordance with antitrust cases.A official account made a statistics.He said that there were 119 cases of abuse of market dominance,30 of which were domain name cases represented by lawyers from the same firm,so the two lawyers accounted for about 30%,but they were all domain names,but it was not a typical anti-monopoly case,and there were fewer real anti-monopoly cases than this.

However,the number of antitrust lawsuits and the degree to which the industry attaches importance to antitrust lawsuits are actually disproportionate.When encountering an antitrust case,everyone is very nervous.Firstly,because such cases are relatively rare,they are highly valued from top to bottom;In addition,an antitrust case will send a signal to the society that the defendant is a monopoly enterprise.So as long as you file a monopoly case,the media,legal affairs,and leaders all attach great importance to it.

In civil litigation cases,there are few cases of horizontal monopoly agreements,which is because horizontal monopoly cases are reached privately and without administrative investigation,you would not know.

After Ali is subjected to administrative penalties,will many small sellers sue Ali for compensation?From a legal perspective,we believe that if a seller brings a lawsuit,there is still a certain degree of certainty of winning the lawsuit.However,they may not sue because if they want to do business on Taobao and Tmall,they still cannot do without the platform of Alibaba.

However,platform enterprises may still need to prepare a plan.It is not ruled out that some sellers will file lawsuits.In addition,for competitive platforms,such as JD,it is possible to file lawsuits.We know that anti unfair competition law mainly protects fair competition,so civil litigation under anti unfair competition law is basically initiated by competitors.However,the antimonopoly law is different.The ultimate goal of the antimonopoly law is to protect consumers.However,consumers actually do not have the greatest ability and motivation to sue.In fact,competitors have great ability and motivation to do so.Therefore,I personally believe that competitors are also relatively important plaintiffs in antitrust civil litigation.

Next,let's talk about a slightly theoretical issue.We have talked a lot about it.Let's briefly discuss it.As is well known in antitrust law,agreements are divided into two categories,one is horizontal,the other is vertical,and the other is abuse of market dominance.However,the judicial interpretation only stipulates the evidence rules for horizontal monopoly agreements and abuse of market dominance,but does not provide for the evidence rules for vertical monopoly agreements.Therefore,there is some controversy in practice as to whether the plaintiff must prove the effectiveness of eliminating and restricting competition in a vertical monopoly agreement.

One of the more important evidentiary rules for abusing market dominance is that the plaintiff can determine that the defendant has a market distribution status based on the information released by the defendant.In some cases,the plaintiff provided third-party reports,but the court considered the evidence insufficient.I understand the legal logic of the Supreme Court,which lies in self admission.Because the defendant considers himself in a dominant position,the plaintiff does not need to provide further evidence.Otherwise,it is not enough for the plaintiff to provide only some media reports,and further market research reports are needed.

As for the economic analysis provided by economists and expert witnesses,I believe it is important,but different economists may reach different conclusions,and it also depends on whether judges can understand what economists say.In addition,the cost of antitrust economists is also very expensive,and if it is a small case,the plaintiff may not be able to bear it.Therefore,I believe that we should not blindly rely on expert witnesses and economic analysis,and we need to determine the best litigation strategy based on the specific situation of the case.Guide the discretion of the judge in our favor.

The next issue is the effectiveness of the administrative penalty decision.First of all,China's judicial interpretation of anti monopoly does not say that the administrative penalty decision of the Anti monopoly Bureau can directly serve as the basis for judgment.The written decision on administrative penalty is only an evidence,and the court has the theoretical power to decide whether to accept or not to accept it.However,from a practical perspective,the evidentiary effectiveness of administrative penalty decisions is very high.The plaintiff basically does not need to provide evidence on the existence of the monopoly behavior identified in the decision.However,the existing problem is that the administrative penalty decision only provides a summary treatment of monopoly behavior.The evidence on which the punishment is based is not publicly available.

In the case of Carrefour and Abbott,the plaintiff sued Carrefour,but Carrefour argued that we did not reach this agreement with Abbott."The plaintiff could not provide relevant evidence,so in the end,the plaintiff lost the case.".

According to statistics,in all cases of abuse of market dominance,less than 1%of the plaintiff's claims have been supported by the court.Therefore,it is not easy for the plaintiff to conduct an antitrust lawsuit in China.But why should we talk about antitrust litigation today?Because the wind has changed and it is now time to prevent disorderly expansion of capital,judges may be more likely to adopt a positive attitude in antitrust cases,that is,judicial activism.Therefore,I believe that the proportion of successful plaintiffs will increase to a considerable extent in the future.

This is my preliminary judgment.You can look at the actual situation.

In terms of abuse,one of the key points of the defendant's defense is justification.In fact,this legitimate reason is a vague area in antitrust law.So I think that when judicial activism is not so strong,there may be an inclusive attitude towards the legitimate reasons proposed by the defendant,but now the wind has changed and it is necessary to prevent disorderly expansion of capital.Perhaps the court will take a more cautious attitude towards the legitimate reasons proposed by the defendant and will not easily accept them.Therefore,I believe that everyone should pay special attention to the changes in the attitude of the judicial authorities towards legitimate reasons after the wind changes,so as to correctly assess the risks in litigation.

Regarding the limitation of action,it is worth mentioning that according to judicial interpretation,if the plaintiff reports the alleged monopolistic behavior to the anti monopoly,the limitation of action shall terminate from the date of reporting.But the question arises.If it is not reported by the plaintiff or by a third party,will the statute of limitations not be interrupted?So this is very interesting,everyone can carefully taste it.

Regarding the amount of compensation,how is the compensation amount calculated?In this,I think,as I said at the beginning,how can the plaintiff prove how much loss?I don't think there is any universal standard in this,but rather a specific judgment based on specific cases.A very important way is to infer counterfactual facts,that is,the benefits that the plaintiff may receive if there is no monopolistic behavior.

The last issue is the arbitrability of the antimonopoly law,so there are basically two attitudes towards arbitrability at present.The jurisprudence results of the Beijing High Court and the Supreme Court in 2019 are completely different.The Beijing High Court believes that the arbitration organ can handle monopoly issues,but the Supreme Court believes that monopoly and non monopoly are actually public law issues that should not be judged by the arbitration organ.Personally,I believe that the view of the Supreme Court is a bit outdated,because many countries now believe that arbitration institutions can review whether an agreement violates the anti monopoly law.After all,the Supreme Court only makes decisions in individual cases,and there is no provision for judicial interpretation.Therefore,I believe that there is still room for development in the future.We tend to believe that during the arbitration process,violations of the anti monopoly law can still be used as a defense against the invalidity of the contract.Of course,if everyone has different opinions,we can discuss it later.

That's all for my explanation.Thank you all.

Jiang Liyong(host):

Next,we will talk about the senior partner of Gaopeng Law Firm,Tan Yajun,a lawyer.Lawyer Tan is a senior partner of the Japanese team at Gaopeng Law Firm.After graduating from Lawyer's University,Tan joined a large Japanese funded enterprise,Onoda Cement Co.,Ltd.,where he once passed the lawyer qualification exam with the highest score in Nanjing.He once studied at Nishimura Comprehensive Law Firm in Japan.He has provided comprehensive legal services,including anti monopoly law,to a number of Japanese funded enterprises.Now,let's talk about the lawyer's speech.

Talk about the sharing of runner-up lawyers

"Anti monopoly compliance work construction in the context of the Alibaba case"

Good afternoon,everyone!I am Tan Yajun,a senior partner lawyer at Beijing Gaopeng Law Firm,and also serve as the deputy director of the Competition and Anti monopoly Law Professional Committee of the Beijing Lawyers Association.I have been a member of the committee for four sessions and a deputy director for three sessions,and have been engaged in anti monopoly legal services for more than ten years.Today,I have the honour to share with you my experience and suggestions on anti monopoly compliance work in the context of the Alibaba case.

1、A heavy lesson from the Ali case

First of all,let's take a look at the heavy lessons from the Ali case.

The direct losses in the Ali case were enormous,with a penalty amount of 18.228 billion yuan.This is related to the legal punishment system established by the anti monopoly law.Unlike the common form of administrative penalties with a fixed amount of tens of thousands or hundreds of thousands,abuse of market dominance will result in a penalty of 1%to 10%of the annual sales volume above.For large monopolistic enterprises,due to their huge annual sales volume,a penalty based on the percentage of sales volume of hundreds of billions of levels will be a huge amount.

Significant administrative penalties that have an impact and have received widespread attention from society will seriously damage the company's brand,leading to loss of reputation,decline in company value,consumer and commercial customers fleeing,and ultimately loss of market.

In addition,the Alibaba case may also cause Alibaba to face a large number of civil claims or litigation risks,and affected commercial customers may file claims.If a settlement cannot be reached,civil litigation will also be involved.

2、Construction of antitrust compliance work

Let's talk specifically about our opinions and suggestions on the construction of antitrust compliance work.

1.Need to comprehensively sort out the company's marketing policies-no abuse of market dominance

First,let's talk about the definition of market dominance.In simple terms,market dominance refers to the ability to control the market in a relevant market,or the ability to hinder or influence other operators from entering the market.There are two types of market dominance and it is considered to have a dominant market position.

There is a presumption of market dominance,that is,when one operator has a market share of 1/2,two operators have a market share of 2/3,and three operators have a market share of 3/4,it will be presumed that they have a market dominance.Of course,the presumption of market dominance is only one way,not the only way to identify market dominance.

Here,we need to emphasize that owning a dominant market position is not illegal,while abusing a dominant market position is illegal.From the perspective of economic development,in fact,the state encourages enterprises to become bigger and stronger,willing and encouraging more enterprises to have a dominant market position,but once they have a dominant market position,they cannot abuse it.

Secondly,let's talk about specific situations where market dominance is abused.

(1)Improper pricing behavior

Improper pricing behavior includes two types:one is improper high prices,which refers to enterprises with a dominant market position selling goods at unfairly high prices,while buyers are forced to only buy because there is no place to buy,which infringes on the interests of downstream enterprises;The second is improper low prices,which refer to enterprises with a dominant market position selling goods at unfair low prices,while the supplier is forced to sell only because there is no place to sell,which infringes on the interests of upstream enterprises.

In one case,Hunan Erkang Pharmaceutical Operation Co.,Ltd.and Henan Jiushi Pharmaceutical Co.,Ltd.together account for about 90%of the market share in the chlorpheniramine bulk drug market and have a dominant market position.The two companies signed a strategic cooperation agreement to sell at an improperly high price of 3-4 times the cost price,which was identified by the State Administration of Market Supervision as abusing their dominant market position,and were fined more than 10 million yuan.

(2)Tying/attaching unreasonable conditions

The act of tying up/attaching unreasonable conditions refers to tying up goods without justifiable reasons,or attaching other unreasonable trading conditions during trading.Tying mainly affects the competitive relationship in the market for hitched goods,resulting in good sales even if the hitched goods are inferior,eliminating or reducing competition in the market for hitched goods.

A typical case of tying is the administrative penalty case of Qualcomm Incorporated in the United States.The company has a dominant market position in the wireless communication patent market related to CDMA,WCDMA,and LTE,as well as in the mobile chip market.It has bundled and licensed unnecessary patents to Chinese companies,constituting tying.In addition,it has also committed improper high price behavior,and was fined 6.088 billion yuan.

(3)Specify transaction behavior and refuse transaction behavior

Designated transaction behavior refers to restricting the trading counterpart to only conduct transactions with it or only conduct transactions with its designated operator without justifiable reasons.The designated trading behavior restricts or excludes the competitive relationship in the market where the counterparty is located,and the designated party can obtain trading opportunities without making efforts.This case of Alibaba being punished is a typical designated transaction.To introduce another small case,Suqian Yinkong Water Supply Company has an exclusive water supply operation status.The designated real estate company must entrust the water supply project to its subordinate enterprises for construction,and designate itself to provide later maintenance.This is considered to constitute a designated transaction,confiscating illegal gains of over 3.66 million yuan,and imposing a fine of over 1.83 million yuan.

The act of refusing to trade refers to refusing to trade with the counterparty without justifiable reasons.Refusal to trade has two main purposes:first,to use market dominance to reduce the number of products placed on the market,thereby driving up prices;The second is to intervene in the market where the counterparty is located,eliminating some operators and reducing their competition.To introduce a small case,New Secco and Handway Company account for more than 2/3 of the domestic pharmaceutical grade isoniazid raw material market share,and have a dominant market position.The two companies have agreed to refuse to provide raw material drugs to some enterprises and bid up prices,which is considered to constitute a refusal to trade and are subject to an administrative penalty of more than 340000 yuan.

(4)Low price dumping and differential treatment

"Low price dumping"refers to selling goods at a price below cost without justified reasons.Low price dumping is aimed at losing money in the short term in order to defeat competitors and then raise prices and obtain unfair high profits.In the short term,losing money is only a means that will ultimately eliminate competition,so it is prohibited by the antitrust law.

The act of differential treatment refers to the practice of differential treatment on transaction terms such as transaction prices for counterparties with the same transaction conditions without justifiable reasons.Differential treatment interferes with the market in which the counterparty is located,resulting in an unfair position for operators with competitive relationships in the market.Operators who obtain advantageous conditions can obtain trading opportunities without competition,which limits or excludes market competition,and is therefore prohibited by antitrust laws.In a small case,Chifeng Salt Industry Company has an exclusive status in the local salt industry.It sells different products to retailers in different districts and counties and applies different sales prices to maximize profits.This is considered to constitute a differential treatment act,confiscating illegal income of 1.94 million yuan and imposing a fine of 1.04 million yuan.

2.Review the company's price policy-no vertical monopoly agreements

(1)Fixed prices for resale of goods to third parties

The main situations of fixing the resale price of a commodity to a third party include:the operator and the counterparty clearly agree on the resale price of the commodity;The operator fixes the profit ratio of the trading counterpart;The calculation formula for determining the resale price of the trading counterpart by the operator.

To tell a case,in order to jointly maximize the profits of all parties,Mercedes Benz and its dealers in Nanjing,Wuxi,and Suzhou have fixed the price of spare parts,while also limiting the minimum sales price of automobiles,forming a vertical monopoly agreement.Mercedes Benz has been fined 350 million yuan,and dealers in the three regions have been fined 7.86 million yuan.

(2)Limit the minimum price for resale of goods to third parties

The main situations that limit the minimum resale price of goods to a third party include:the operator and the counterparty have clearly agreed on the minimum resale price of the goods;The operator limits the range of price changes of the trading counterpart;The operator limits the maximum discount for resale by the counterparty.

Let's take a case.Ten years ago,in order to control the retail price in the Chinese market,maximize profits and limit the minimum sales price of dealers,two well-known Chinese Baijiu enterprises,Moutai and Wuliangye,were given a fine of 247 million yuan and Wuliangye a fine of 202 million yuan.

3.Pay attention to the behavior with external peers-there must be no horizontal monopoly agreement behavior

(1)Fixing or changing commodity prices

The main situations of fixing or changing commodity prices include:fixing or changing the price level of goods and services;Fixing or changing the range of price changes;Fixing or changing fees,discounts,or other fees that have an impact on prices;Use the agreed price as the basis for transactions with third parties;Agree on the standard formula used to calculate the price;It is agreed that prices shall not be changed without the consent of other operators participating in the agreement.

Tell me about a case where five express companies,including Huidong County Shentong Express Company,gathered to discuss the unified implementation of price increases in 2015,constituting a horizontal monopoly agreement to uniformly change prices.Guangdong Development and Reform Commission imposed a penalty of more than 650000 yuan.

(2)Limit the quantity of goods produced or sold

The main situations of restricting the production or sales quantity of goods include:agreements that limit the production quantity by restricting production,fixing production,stopping production,etc;An agreement to limit the quantity of goods sold by refusing to supply or restricting the quantity of goods placed.

(3)Split sales market or raw material procurement market

The main situations for dividing the sales market or raw material procurement market include:agreements to delimit the sales area,sales targets,types,and quantities of goods;Agreement on dividing the procurement area,type,and quantity of raw materials such as raw materials,semi-finished products,parts,and related equipment;Agreement for dividing suppliers of raw materials such as raw materials,semi-finished products,spare parts,related equipment,etc

In one case,three insurance companies,including China Life Insurance Jiangxi Branch,signed a"co insurance agreement"in December 2009,stipulating that cross regional underwriting is not allowed,which is considered to constitute a horizontal monopoly agreement to split the market,and was fined 3%to 5%of the sales of the previous year.

(4)Restricting the purchase of new technologies and equipment or restricting the development of new technologies and products

The main situations restricting new technologies and products include:agreements restricting the purchase and use of new technologies,processes,and equipment;Agreements restricting investment,developing new technologies,processes,and products;Agreements that refuse to use new technologies,processes,equipment,or technical standards.

(5)Boycott a deal

The main situations of boycott transactions include:agreements that jointly refuse to supply or sell goods to specific operators;An agreement to jointly refuse to purchase or sell the goods of a specific operator;An agreement that jointly restricts certain operators from trading with operators that have a competitive relationship with them.

To take a case study,three pharmaceutical companies,including Huazhong Pharmaceutical,held a meeting in 2014 to reach a consensus on refusing to provide estazolam API to downstream companies,resulting in a soaring price of the API,which is considered to constitute a horizontal monopoly agreement for boycott transactions.The National Development and Reform Commission imposed a fine of more than 480000 yuan.

(6)Typical Cases of Horizontal Monopoly Agreements

Tell me about a typical case of a horizontal monopoly agreement.In order to conduct transactions with automobile manufacturers at the most advantageous prices,eight automobile parts suppliers,including Yazaki,Kogawa,Sumitomo,Mitsubishi Electric,and Dianzhuang,frequently communicated and reached price agreements between January 2000 and February 2010.Until the end of 2013,price agreements were still implemented in China.The National Development and Reform Commission investigated and dealt with them in 2014,believing that they constituted a horizontal monopoly agreement,and exempted the company that initially surrendered from punishment,The other seven companies were fined a total of 832 million yuan.

4.Establish a daily antitrust compliance review system

(1)Establish an antitrust compliance review department(or set up an antitrust review function in the legal department).

(2)Before introducing various new policies(business policies,sales policies,promotional policies,pricing policies,procurement policies,etc.)for the company,it is necessary to pass the antitrust compliance review.

(3)Various contracts signed by the company externally(platform service contracts,dealer contracts,procurement contracts,sales contracts,cooperation contracts,business entrustment contracts,etc.)should pass the antitrust compliance review.

(4)Correspondence,meeting content,communication points,etc.with counterparts should be subject to an antitrust compliance review in advance.

(5)In the event of an investigation by a competent government agency,the assistance of legal experts should be sought as soon as possible.

(This article is translated by software translator for reference only.)