Llinks Client Alert - Antitrust (March 2020)

I. Highlights
The General Office of Shanghai Municipal People’s Congress issues the Regulations on the Optimization of Business Environment in Shanghai (Draft).
The State Administration for Market Regulation terminates its antitrust probe into Lenovo.
The State Administration for Market Regulation conditionally approves the acquisition by Danaher of GE’s medical, life sciences, and biopharmaceutical businesses.
ByteDance's Feishu announced that domain names related to Feishu were completely banned by WeChat for no reason, and its “forward” API on WeChat was unilaterally shut down.
France’s competition watchdog fines Apple €1.1 billion, the biggest ever levied by the former, for anti-competitive behaviors.
UK’s Competition and Markets Authority (CMA) is calling on major supermarkets to act after finding Tesco has been unlawfully stopping rivals from opening shops near its stores.
II. Legislation
The General Office of Shanghai Municipal People’s Congress issues the Regulations on the Optimization of Business Environment in Shanghai (Draft) (hereinafter, the “Draft”). Article 13 (fair competition) and Article 63 (fair competition review) of the Draft propose to establish and perfect the anti-monopoly and anti-unfair competition coordination mechanism, enhance law enforcement, prevent market monopoly and abuse of administrative authority to exclude and restrict competition; require that competent authorities shall conduct fair competition review in accordance with regulations in the course of formulating legal documents and policies relating to economic activities of undertakings; encourage third-party institutions to participate in fair competition review; and entitle all individuals and organizations to the right of reporting policies and measures for suspected violations of fair competition review standards. The Draft was issued on March 19, 2020 and Shanghai Municipal People’s Congress sought public comments to the Draft until March 25, 2020. Visit the link below for more information (available in Chinese only):
http://www.spcsc.sh.cn/n1939/n1952/n1955/n2316/n2412/n7963/index.html
III. Law Enforcement
The State Administration for Market Regulation terminates its antitrust probe into Lenovo (联想(北京)有限公司垄断案终止调查决定书). During the period from 2016 to October 2017, Lenovo fixed minimum resale prices of authorized service stations on some accessories, optional parts and services. Beijing Administration for Market Regulation initiated a preliminary investigation of Lenovo's suspected monopolistic activity on November 9, 2017, and officially filed the case on July 3, 2018. Since Lenovo admitted its misconducts and committed to taking remedial measures such as internal investigation, price-cut, and internal legal training, Beijing Administration for Market Regulation suspended the investigation on September 16, 2019, and terminated it on March 3, 2020 after verifying that Lenovo has fully fulfilled its commitments and effectively eliminated adverse impacts. The decision was issued on March 3, 2020. Visit the link below for more information (available in Chinese only)：
http://www.samr.gov.cn/fldj/tzgg/xzcf/202003/t20200309312674.html
The State Administration for Market Regulation issues an administrative penalty decision concerning monopoly agreement (贵州省黔西南州兴义市驾培行业垄断协议案行政处罚决定书). 17 undertakings engaged in driving training business in Xingyi, Southwest Guizhou Autonomous Prefecture, reached and implemented an “escrow agreement” to fix driving training tuitions in Xingyi, and thus violated the provision on monopoly agreements in Article 13.1(a) of the PRC Anti-Monopoly Law. The administration for market regulation of Guizhou province imposed fines of 3%, 4% or 6% of their sales for the preceding year on the 17 companies respectively depending on the severity of violation. The decision was issued on March 9, 2020. Visit the link below for more information (available in Chinese only)：
http://www.samr.gov.cn/fldj/tzgg/xzcf/202003/t20200309312670.html
The State Administration for Market Regulation conditionally approves Danaher’s acquisition of the GE’s medical, life sciences, and biopharmaceutical businesses (附加限制性条件批准丹纳赫公司收购通用电气医疗生命科学生物制药业务案反垄断审查决定). The State Administration for Market Regulation concludes that the relevant markets in this case are 25 global markets including the global cell culture serum market, and the concentration may have an adverse effect on market competition in 10 global markets including the global microcarrier market, thus conditionally approved the acquisition. Danaher is required to divest the microcarrier and other businesses, provide the purchaser of divested businesses with tangible assets related to Project Emily, as well as the know-how and trade secrets related to non-exclusive licenses, and enter into a transition service agreement. Additionally, the entity resulted from the concentration and Danaher commit to continue working on Project Emily within two years after completion of the acquisition. The decision was issued on February 28, 2020. Visit the link below for more information (available in Chinese only):
http://www.samr.gov.cn/fldj/tzgg/ftjpz/202002/t20200228_312297.html
The State Administration for Market Regulation, during February 20, 2020 and March 20, 2020, issued a public notice on 35 cases qualified for expedited review and unconditionally approved 39 cases. No merger was prohibited cases during this period.
IV. News Reports
From February 3, 2020 to March 15, 2020, the Anti-Monopoly Bureau of the State Administration for Market Regulation accepted 37 merger filings, filed 45 cases, and concluded 45 cases (averagely 2 cases per working day), providing firm support to the smooth progress of corporate M&A transactions and the resumption of production. Moreover, the bureau received above 60 telephone consultations from enterprises, actively providing compliance guidelines and consulting services for them, and helping resolve legal issues with regard to merger filing and fair competition during the outbreak.
Gansu Province, Jilin Province, Changde City of Hunan Province and other places have begun to repeal policies and measures that hinder unified market and fair competition. The cleanup targets include: policies which obstruct undertakings to enter and exit the market equally by law; policies which restrict the free movement of goods and essentials across regions; discriminatory preferential policies in violation of laws and regulations; and policies which improperly interfere with the production and operation of undertakings.
ByteDance's Feishu (formerly Lark) announced that domain names related to Feishu were completely banned by WeChat for no reason, and its “forward” API on WeChat was unilaterally shut down. Relevant pages showed that access to Feishu websites from within WeChat was blocked as people reported that they contained content that induced sharing, subscribing, and other inductive behaviors. WeChat did not respond to Feishu’s complaint, but the message shown in WeChat upon visiting Feishu URLs changed to “Please copy the URL and open it via browsers”.
V. Foreign Antitrust Trends
France’s competition watchdog fined Apple €1.1 billion, the biggest ever levied by the former, for anti-competitive behaviors. The French regulator found that Apple imposed prices on retail premium resellers so that the prices were aligned with those charged by Apple’ own shops, or on the Internet; that the two wholesalers in France, Tech Data (fined €76 million) and Ingram Micro (fined €63 million), fully followed Apple’s instructions on how to allocate products to customers, instead of freely determining their commercial policy, and agreed not to compete with each other and to prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products. Apple planned to appeal.[1]
The Competition Commission of Pakistan has approved the Uber-Careem merger through a Phase-II order, imposing pro-competitive and tough conditions: (1) a “No Contractual Exclusivity” condition to ensure that drivers or captains are free to offer their services on any ridesharing platform they choose, as well as being street hailed; (2) a Service Fee cap for all drivers and a Total Organic Fare cap for riders; (3) free access to “point of interest map data”, on a one-time basis, to new or existing ridesharing service providers.[2]
The Competition and Markets Authority (CMA) is calling on major supermarkets to act after finding Tesco has been unlawfully stopping rivals from opening shops near its stores. Tesco has agreed to take remedial action for all affected land agreements, improve its internal processes and staff training to avoid future breaches, and ensure that all new land agreements are in line with the Groceries Market Investigation (Controlled Land) Order 2010.[3]
Italy’s antitrust watchdog is investigating e-commerce giants Amazon and eBay for an allegedly excessive rise in the price of products such as hand sanitizer during the coronavirus crisis, and allegations of misleading advertisements for some items put up for sale on the platforms where they were described as being effective against the coronavirus.[4]
The Competition and Markets Authority (CMA) is monitoring reports of price rises and other changes in sales practices during the outbreak and wants to “ensure that traders do not exploit the current situation to take advantage of people”. It would take “direct enforcement action” against any companies that had broken competition or consumer protection law by, for example, “charging excessive prices or making misleading claims about the efficacy of protective equipment”.[5]
The American Bar Association Antitrust Law Section released comments in response to the request for public comments on the Draft Vertical Merger Guidelines issued by the Department of Justice and the Federal Trade Commission. Comments focus on “related product” markets, unilateral effects and elimination of double marginalization.[6]
【Endnote】
[1] Reported by Reuters on March 16, 2020. URL: https://www.reuters.com/article/us-apple-competition-france/french-antitrust-regulator-fines-apple-1-2-billion-idUSKBN2131DP
[2] Reported by TechJuice on February 21, 2020. URL: https://www.techjuice.pk/uber-careem-merger-approved-by-ccp-but-with-powerful-conditions/
[3] Reported by the UK government on February 14, 2020. URL:https://www.gov.uk/government/news/cma-demands-action-after-tesco-blocks-rival-supermarkets
[4] Reported by Reuters on March 13, 2020. URL: https://www.reuters.com/article/us-health-coronavirus-italy-antitrust/italian-antitrust-watchdog-probes-amazon-ebay-over-price-spikes-in-virus-crisis-idUSKBN20Z3BZ
[5] Reported by the Guardian on March 5, 2020. URL: https://www.theguardian.com/world/2020/mar/05/do-not-take-advantage-of-coronavirus-panic-cma-warns-retailers
[6] Reported by the American Bar Association on February 25, 2020. URL: https://www.americanbar.org/news/abanews/aba-news-archives/2020/02/aba-antitrust-law-section-releases-comments-on-doj--ftc-draft-ve/