Beijing: First Antimonopoly Case in China

In stark contrast with the common perception that Chinese “hate” and “avoid” litigation, plaintiffs in China are much more fast-paced nowadays.

On the date when China’s first comprehensive competition statute, PRC Antimonopoly Law, took effect, a plaintiff, Mr. Fangping Li (who is a lawyer), brought China Netcom, a mega State-owned telecom company, into the courtroom.

Mr. Li claimed that China Netcom has “abused its dominant market position by applying differential treatments to counter-parties to transactions who have the same qualifications with respect to transaction price and other transaction terms, without any justification” (Article 17(6) of PRC Antimonopoly Law).

According to Mr. Li, he, as a non-Beijing permanent resident, had no choice but to opt for the pre-paid services of China Netcom when installing his land line telephone in Beijing. Unexpectedly, the difference following that choice is much more than when to pay the fees (pre-paid vs. monthly billing after actual use). In his claim, Mr. Li enlisted 8 items of preferential treatment or services that Netcom provided to monthly billing customers only. This seems unfair to Mr. Li, who decided to arm himself with the weapon provided under the new law (Article 50 of PRC Antimonopoly Law entitles those who suffer losses by one’s monopolistic conduct to file civil lawsuits) even though he only claimed nominal damage of RMB 1.

On September 18, 2008, the Beijing Chaoyang People’s Court accepted this case, and it had this latest development on October 29. After the judge clarified with the plaintiff that this was an antitrust claim, the case was transferred to Beijing No. 2 Intermediate People’s Court, which has the jurisdiction over antimonopoly cases pursuant to a recently-issued judicial interpretation.

This is the first antimonopoly case in China. Though formally accepted and transferred to proper jurisdiction, the case has much to be seen with respect to where it goes and how the long-awaited new law will be enforced.

East? West? Stereotyped?

Moving to New England in August 2007, I, as a Chinese native, have been experiencing my own version of "East meets West". After years of serving American clients at an international law firm, I find the West not unfamiliar, but still interesting to explore, from New Hampshire's "Live Free or Die" to Massachusetts’s "Spirit of America", from subprime crisis to presidential debate.

While writing on Business Negotiation between Westerners and Chinese State-Owned Enterprises, I have read through various Western literatures about negotiation with Chinese, which gave me an unparalleled opportunity to re-think about Chinese from the other side. Some comments on Chinese made me nod, while others totally confused me.

In such a globalized world, West and East meet all the time; however, are the two sides understanding each other? Isn't it true that each side is armed with all sorts of stereotypes of the other side before they actually meet? If so, how can both sides avoid misunderstanding?

To continue my efforts on helping both sides to understand each other, here comes this new blog - China Law and Business - it is a generic name, and the purpose is simple:

For both the East and West, let's stay away from those "years-old" stereotypes, and keep ourselves abreast with this dynamic world - everything is changing every day!

For those who are interested in doing business s in China, are you ready for China market? Look out for the dynamic legal, business, and cultural complications, which are what I hope to capture here.