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.