(June 4, 2012) Despite the promulgation of the Anti-Monopoly Law of China in 2008, few plaintiffs have prevailed in civil anti-monopoly cases. According to an explanation given by officials of the Supreme People's Court (SPC), this is due to the difficulties in collecting evidence and the heavy burden of proof required in such cases. (Presiding Justice and Spokesman of the Supreme People's Court Answered Reporters' Questions [in Chinese], XINHUANET (May 8, 2012).)
In response to this situation, the SPC recently finalized the Provisions on Several Issues Concerning the Application of the Law in Trials of Civil Dispute Cases Arising from Monopolistic Acts (Guanyu Shenli Yin Longduan Xingwei Yinfa de Minshi Jiufen An'jian Yingyong Falü Ruogan Wenti de Guiding (Provisions), SPC website (May 9, 2012)), which are designed to protect fair competition and consumer interests. The effective date is June 1, 2012.
In light of the Provisions, applicable causes of action include: (1) a loss suffered by the claimant from a monopolistic act, and (2) breach of the Anti-Monopoly Law arising out of a contract or articles of association of an industry guild (id. art.1). The process for filing a lawsuit is separate from the administrative review process, which means that filing can be done either before or after the anti-trust enforcement agency has made a decision that declares the existence of a monopolistic act (id. art. 2).
The Provisions include the following rules to empower the plaintiff to collect evidence and allocate the burden of proof according to the capability of the parties.
Burden of Proof
Defendants are obligated to:
- prove that an agreement that the plaintiff claims is a monopolistic agreement prohibited by article 13 of the Anti-Monopoly Law, such as a price-fixing or joint boycotting agreement, does not have the effect of excluding or restraining competition (id. art. 7); or
- justify an act claimed by the plaintiff to be an abuse of dominant position in the relevant market (DPRM) in violation of article 17(1) of the Anti-Monopoly Law (id. art. 8).
Either party is permitted to apply for up to two expert witnesses to give testimony in court, or the parties may jointly entrust, upon agreement or designation by the court, a professional institution or an expert with the preparation of market survey or economic analytical reports on specialized issues involved in their case (id. arts. 12 & 13). The competent court is required to review the expert evidence strictly according to the Civil Procedure Law (CPL) and interpretations of the CPL (id. art. 13).
Prima Facie Evidence
Where evidence to the contrary is absent, the court is entitled to determine the existence of DPRM in light of: (1) information disclosed by the defendant (id. art 10); or (2) the market structure and competitive status of a public utility enterprise or a business operator with exclusive control permitted by law (id. art. 9). The court should also back a plaintiff's claim for reasonable compensation for expenses incurred during the course of the investigation and prevention of monopolistic acts (id. art. 14).
Abuse of DPRM is a severe breach of the Anti-Monopoly Law. A default-proven DPRM may directly shift the burden of proof to the defendants to present evidence that there has been no illegal restriction or exclusion of competition (id. art. 8).
Prepared by Rong Xiang, Foreign Law Research Consultant, under the guidance of Kelly Buchanan, Chief, Foreign, Comparative and International Law (FCIL) I. Ms. Xiang has a Bachelor of Laws degree from Nanjing University in China and an LL.M degree from the City University of Hong Kong. She recently earned an LL.M. in International Business Law from The American University Washington College of Law.