Page created by Jesse Elliott
January to March 2021

Introduction                                                     3

Special Report: Dramatic Antitrust Developments regarding the    4
Chinese Tech Sector

Merger Control                                                   9

Antitrust Investigations                                        12

Other Asia Pacific News in Brief                                16

Regional Contacts                                               25



China news this quarter is dominated by enforcement in the technology sector. This culminated
in April's RMB 18 billion (USD 2.8 billion) fine on Alibaba for abuse of dominance, but also
includes a string of much smaller fines for failure to file against China's largest tech firms
including Alibaba, Tencent,, Baidu, Meituan Dianping, Suning, Didi Mobility and
Bytedance. Other initiatives included the adoption of guidelines for the platform economy and a
draft regulation enabling the central bank to alert SAMR when non-bank payment providers
(such as Alipay or Wechat payment) achieve market power.

In other China news, last quarter saw a significant jump in merger cases compared to the
previous year (up by over a third) but only one of these cases included remedies – Cisco's
acquisition of Acacia which was cleared subject to a behavioural remedy to address a vertical
overlap, requiring Acacia to continue to supply certain products on FRAND terms. Other notable
enforcement cases included a RMB 100 million (USD 15 million) fine for refusal to supply in the
pharmaceutical sector and a series of cases against various provincial trade associations.

Outside mainland China, in Hong Kong, the Competition Tribunal imposed fines of HKD 3.26
million (USD 419,236) in a decorating cartel and the Commission issued an infringement notice
against six hotel groups for facilitating a cartel arrangement; in Singapore, the Competition
Appeal Board dismissed Uber's appeal against its challenge to the CCCS's decision to
intervene in the sale of Uber's Southeast Asian business to Grab; in Japan a series of new
rules, guidelines and reports into various aspects of the digital economy were released (relating
to digital platforms, online advertising, cooperation with start-ups and the impact of algorithms);
another investigation into online travel MFNs was settled in Korea; and in Australia the interim
report into ad tech proposed a requirement to separate large incumbents' datasets to lower
entry barriers.


 YONG BAI                      DAVE PODDAR
 Partner, Head of Antitrust,   Partner, Head of Antitrust,
 Greater China                 Asia Pacific

 T +86 10 6535 2286            T +61 28922 8033
 M +86 13910850420             M +61 422800415
 E yong.bai                    E dave.poddar 

ANTITRUST IN CHINA AND ACROSS THE REGION                                           CLIFFORD CHANCE    3
China Focus


It would not be exaggerating to note that antitrust was in the limelight in China in the 1st quarter of 2021.
On 15 March 2021, over the meeting of China's Central Financial and Economic Affairs Commission,
President Xi Jinping called for empowerment of regulatory authorities in order to intensify the regulation
for platform companies. Earlier in March, over the National People's Congress, Premier Li Keqiang
delivered the annual government work report which set out work priorities for 2021 and the role of
antitrust regulation was again emphasized.

In response to the call for increased antitrust scrutiny by the highest leadership, State Administration for
Market Regulation ("SAMR") has taken dramatic enforcement actions in this quarter. On the front of
investigating failure-to-file transactions, to maximize deterrent effects, SAMR has strategically cast a
wide net and by far almost each of the big names active in the tech sector in China have received a fine
ticket. More details on these failure-to-file cases are included in Annex 1 (Failure-to-file fines on tech
giants) below. Moreover, on 10 April 2021, SAMR imposed a record fine of RMB 18.228 billion (USD
2.8 billion) on Alibaba Group ("Alibaba") for its exclusive conduct, catching worldwide attention. More
details of this landmark decision with our commentary are covered separately in Annex 2 (Alibaba
record fine).

In the meanwhile, we have also seen notable legislative developments in relation to big techs in this

• On 7 February 2021, the finalized version of the Antitrust Guidelines for Platform Economy ("Platform
  Guidelines") was released by the Antitrust Commission of the State Council and came into force on
  the same day. As reported in the last quarterly briefing, the draft version Platform Guidelines was
  published for consultation on 10 November 2020. This is probably one of the quickest legislative
  process that is ever seen in China. The final version Platform Guidelines largely follows the draft
  version, with notable changes including: (i) Market definition – A novel proposal in the draft version
  providing for the flexibility of not defining relevant markets in abusive cases in certain circumstances
  was deleted from the final version, which requires the market definition approach in all abusive
  cases. (ii) Exclusion of parallel pricing – The final version expressly excludes pure parallel pricing
  which is conducted independently as a form of concerted practice. (iii) Price/other trading
  conditions parity clause – The final version replaces the term "MFN clause" in the draft version
  with a broader term of parity clause across platforms relating to price, quantity and/or other trading
  conditions. In addition, the final version adds that apart from vertical anti-competitive agreements, a
  parity clause may also constitute abusive conduct.(iv) Predatory pricing – Attracting new customers
  and doing promotion within a reasonable period of time are added as justification of predatory pricing
  behaviours. (v) Essential facility – The draft version considered the circumstances under which
  both platform and data could constitute essential facilities, whereas the final version has only kept
  that data might be considered as essential facilities.


ANTITRUST IN CHINA AND ACROSS THE REGION                                                    CLIFFORD CHANCE     4
China Focus


• On 20 January 2021, the People's Bank of China ("PBOC") released the draft Regulation on Non-
  Banking Payment Institutions for public comments. The draft regulation empowers PBOC to send
  alerts to the SAMR when one non-banking payment institution has a market share of 1/3 or more, two
  institutions with a combined share of 1/2 or more or three with a combined share of 3/5 or more. Note
  that such share thresholds are lower than the thresholds on presumption of market dominance under
  the Anti-Monopoly Law ("AML"). Also note that Chinese big techs, such as Alipay, Wechat Payment,
  and are among the key players in the non-banking payment sector in China.

• On 31 January 2021, the General Office of the Communist Party of China Central Committee and
  General Office of the State Council jointly issued the Action Plan on Building High-standard Market
  System. This plan guides local governments to facilitate the promulgation of antitrust rules with
  respect to platform companies and their data usage.

• On 15 March 2021, SAMR issued the Supervision and Management Measures for Online
  Transactions which is aimed to clarify relevant parties' responsibilities over online transactions. The
  "one or the other" practice, which is prohibited by the Platform Guidelines, is also explicitly prohibited
  by this set of measures.

SAMR was also active to enforce against tech firms based on wider competition law basis, e.g., Anti-
Unfair Competition Law and Price Law, to rein in platforms that do not have market dominance. Notably,
on 8 February 2021, SAMR fined Vipshop (an online shopping platform) RMB 3 million (USD 463,915)
for imposing restrictions (e.g. traffic limit) on sellers which are also active on other shopping platforms.
On 3 March 2021, SAMR fined five online community-based grocery platforms RMB 6.5 million (USD 1
million) for predatory pricing and adopting false or misleading pricing measures to attract consumers.

The wave of antitrust enforcement also appears to have prompted antitrust civil proceedings – on 2
February 2021, ByteDance filed a suit against Tencent for the latter's alleged abuse of dominance before
the Beijing Intellectual Property Court. ByteDance, the parent of Douyin, alleged that Tencent restricts
users from sharing Douyin's contents on WeChat and QQ platforms. This case is ongoing. Also note that
Douyin previously filed a suit against Tencent on the exact same grounds but under Anti-Unfair
Competition Law in September 2019 before a Fuzhou court, and that suit was withdrawn by Douyin in
March 2021 before seeing final judgement.

What is also noteworthy is that local competition authorities, in particular Zhejiang Administration of
Market Regulation (“Zhejiang AMR“), pioneered to design new regulatory tools for more effective
enforcement against online platforms. Zhejiang province is where many renowned platforms (including
Alibaba) in China are headquartered. In February 2021, Zhejiang AMR launched a program to monitor
platforms' potential anti-competitive conduct. This program relies on big data, cloud computing and
artificial intelligence to monitor major digital platforms, in an attempt to timely discover anti-competitive
behaviours such as "one or the other", "big data discrimination", "vertical monopoly", and "predatory


ANTITRUST IN CHINA AND ACROSS THE REGION                                                   CLIFFORD CHANCE      5
China Focus


Annex 1: Failure-to-file fines on tech giants

Fined Transaction                                                                                      If Competition
                                                 Tech Company behind the
                                                                                  Fine Amount          Concerns Were
(The fined party is italicized)                  Fined Parties

The acquisition of 100% equity interest in
                                                                                  RMB 500,000 (USD
Kaiyuan Commercial Co., Ltd. by Intime Retail    Alibaba                                               No
(Group) Company Limited in 2018

The acquisition of a 15.41% stake in Yuan Inc.                                    RMB 500,000 (USD
                                                 Tencent                                               No
by Tencent Holdings Limited in 2018                                               76,250)

The acquisition of an 11.9% stake in
Wangjiahuan Agricultural Products Group Co.,                                      RMB 500,000 (USD
                                                 Meituan Dianping                                      No
Ltd. by Chengdu Meigengmei Information                                            76,250)
Technology Co., Ltd. in 2020

The acquisition of 100% equity interest in
Jiangsu Five Star Appliance Co., Ltd. by                                          RMB 500,000 (USD
Suqian Hanbang Investment Management in                                           76,250)

The acquisition of a 52.764% stake in Ainemo                                      RMB 500,000 (USD
                                                 Baidu                                                 No
Inc. by Baidu Holdings Limited in 2020                                            76,250)

The acquisition of a 14.08% stake in Shanghai
Pateo Electronic Equipment Manufacturing         Suning (an e-commerce            RMB 500,000 (USD
Co., Ltd. by Suning Rundong Equity               group)                           76,250)
Investment and Management Co., Ltd. in 2017

The acquisition of a 70.52% stake in DaDa
                                                 TAL Education (an education RMB 500,000 (USD
Education Group by TAL Education Group in                                                              No
                                                 and technology group)       76,250)

The establishment of a new joint venture by      Didi Mobility Pte. Ltd. – Didi
                                                                                  RMB 500,000 (USD
Didi Mobility Pte. Ltd. and SoftBank Corp. in    (an online car hailing                                No
                                                                                  76,250) each
2018                                             platform)

The establishment of a new joint venture by
                                                 Liangzi Yuedong –                RMB 500,000 (USD
Shanghai Dongfang Newspaper and Beijing                                                                Longest
                                                 ByteDance                        76,250) each
Liangzi Yuedong Technology in 2019

The acquisition of 100% interest of
                                                                                  RMB 500,000 (USD Co., Ltd. by Beijing Nucarf      N/A                                                   No
Network Technology Co., Ltd. in 2020

ANTITRUST IN CHINA AND ACROSS THE REGION                                                             CLIFFORD CHANCE    6
China Focus


Annex 2: Alibaba record fine

On 10 April 2021, SAMR slapped a record fine of RMB 18.228 billion (USD 2.8 billion) on Alibaba for abuse
of dominance, marking China's first antitrust enforcement in the digital platform sector. The fine amounts to
4% of Alibaba's sales revenue in China in 2019 (the year preceding initiation of SAMR's investigation which
was launched in December 2020). SAMR found that Alibaba engaged in exclusive practice (also called
“one or the other" in Mandarin), which violated Article 17(4) of the AML by significantly restricting
competition and harming the interests of both merchants on its platform and end consumers.

The relevant product market recognized by SAMR is online retail platform. Notably, SAMR distinguished
the provision of online retail platform services from that of offline retail based on factors, including
geographic coverage, length of business hours, cost structure, abilities to meet consumer needs in light of
changing market trends, diversity of product offerings, delivery efficiency, barrier to entry, etc. China was
considered to be the relevant geographic market.

In finding that Alibaba is a dominant online retail platform in China, SAMR undertook comprehensive
assessment by first considering Alibaba's market share – SAMR found that Alibaba had a share of above
50% on the basis of both its revenue arising from providing platform services and transaction volume on the
platform. In addition, SAMR took into account factors, including (i) how competitive the market is, (ii)
Alibaba's strong abilities to control the market; (iii) Alibaba's solid financial and technical strength; (iv)
merchants are highly dependent on Alibaba; (v) entry barriers are high; and (vi) Alibaba's significant
advantages in associated markets such as logistics/delivery, online payment, cloud computing, etc.

SAMR upon investigation came to the view that Alibaba had abused its dominant position by (i) prohibiting
some of its platform merchants from opening stores and participating in promotional activities on competing
platforms, both verbally and explicitly in agreements; and (ii) putting in place incentive and penalty
measures in case of compliance and non-compliance with the exclusivity requirements. SAMR in its
decision highlighted the technical aspects of Alibaba's incentive/penalty measures, which are implemented
through online traffic volume control, manipulation of search ranking, supply/refusal to supply promotion
resources, with a mixed use of platform rules, data and algorithms.

In general, SAMR's decision on Alibaba is thoughtful and impressive, in particular considering that it took
the authority only three months to close the investigation. Apart from the details mentioned above, notable
aspects of this Alibaba fine in China also include:

• RMB 18.228 billion (USD 2.8 billion) hits a record high in China's antitrust enforcement (previously the
  largest was the 2015 Qualcomm fine of RMB 6.088 billion (USD 930 million)), which also marks the
  second largest antitrust fine worldwide, second to the European Commission's 2018 Google


ANTITRUST IN CHINA AND ACROSS THE REGION                                                 CLIFFORD CHANCE     7
China Focus


• On top of the fine, as part of its decision SAMR also innovatively issued a stand-alone
  "Administrative Guide Book" ("Guide Book") to Alibaba. The Guide Book gives 16 instructions to
  Alibaba to ensure effectiveness of the company's future antitrust compliance. These instructions
  mainly relate to Alibaba's self-review of its antitrust compliance, highlighting its responsibilities as a
  platform operator and to promote fair competition and innovation. In addition, SAMR ordered Alibaba
  to submit its rectification plan with reference to the Guide Book by 30 April 2021 and submit annual
  compliance reports in the following three years.

• As the first antitrust decision on big tech's anti-competitive conduct, it evidences again how
  determined China is to curb the power of digital platforms for the benefit of long-term competition and
  consumer welfare.

• In contrast with the European Commission which has been mainly targeting US tech firms so far,
  China appears to focus on homegrown big techs, which inevitably prompts domestic fears as to who
  is going to be the next.



ANTITRUST IN CHINA AND ACROSS THE REGION                                                   CLIFFORD CHANCE     8
China Focus

How many cases have there been?

There were in total 147 merger decisions released in the first quarter of 2021, an increase of
34.86% compared to the first quarter of 2020, with 146 reviewed cases in this quarter
unconditionally cleared and 1 case conditionally approved. Around 118 cases were notified under the
simplified procedure in this quarter, which represents 80.27% of the total reviewed cases (the rate increases
to 84.89% if a series of cases between Fujian Port Group Co., Ltd. and local port and logistics companies
are counted as one – all such cases were filed under normal procedure).
Merger control trends – Q1 2014 – Q1 2021

  140                                                                                                                              2
                                                                                                        2                                            0
                                                                                                             1                2    0
                                                                                                        0                                            0    0
  120                                                                                                        0                0
                                                                                                                  1                      1                0
                                                                                   0         1                    0                      0       3
  100                              0                   0         1                           0     0                                             0
                                   0                   0    1    0                                 0                    0
                                        0    2    0
                                                            0                1                                          0
   80          2         0              0    0    0                     0               5
                         0                                                   0
                              0                                         0               0                                                                      146
               1                                                                                                                   131
   60                         0                                                                         128 124              121                     126 119
                    1                                                             106                             107                    108 101
          1         0                                  93                                    100
                                   91                       85   92                                90
   40     0                             79   80   81                         77                                         84
               68        75                                            71               71
   20     42        48

          Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4
         2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021
                           Unconditional approval cases       Blocked cases        Conditional approval cases

Simplified procedure: How quick is the review period?
        Quarter           Average review period                       Simplified procedure (%)                              Cases exceeding 30 days
        Q1 2017                     25 days                                       81.7%                                                      5
        Q2 2017                     23 days                                       66.7%                                                      2
        Q3 2017                     20 days                                       82.2%                                                      1
        Q4 2017                     21 days                                       76.3%                                                      0
        Q1 2018                     19 days                                       92.1%                                                      1
        Q2 2018                     18 days                                       81.1%                                                      1
        Q3 2018                     16 days                                       76.9%                                                      0
        Q4 2018                     17 days                                       80.0%                                                      3
        Q1 2019                     16 days                                       77.8%                                                      0
        Q2 2019                     17 days                                       85.7%                                                      0
        Q3 2019                     19 days                                       78.9%                                                      1
        Q4 2019                     14 days                                       81.2%                                                      0
        Q1 2020                     14 days                                       87.16%                                                     1
        Q2 2020                    13.7 days                                      86.54%                                                     0 Longest
        Q3 2020                    14.4 days                                      72.22%                                                     3
        Q4 2020                    13.7 days                                      83.19%                                                     1
        Q1 2021                    14.9 days                                      80.27%                                                     3
                                                                      Q1 2021: Average

    Shortest                                                                                                                                         Longest

        10 days                                                             14.9 days                                                                 88 days

ANTITRUST IN CHINA AND ACROSS THE REGION                                                                                                     CLIFFORD CHANCE         9
China Focus

How does China compare internationally?
Comparison with EU – 2013 – 2021

                          EU                    166                                               88            2 13
                        CHINA 0                        211                                        0 4

                          EU                          207                                                 75                  0 17
                        CHINA       66                                        167                       1 4

                          EU                                222                                                     76               0 20
                        CHINA                                                                                                                                                                Simplified procedure
                                                              240                                                        72                 0 2

                                                                                                                                                                                             Normal procedure

                          EU                                      245                                                         83                  1    25
                        CHINA                                           274                                                                77               0 2                              Blocked

                                                                                                                                                                                             Conditional approval
      2018 2017

                          EU                                             278                                                                75                  2    20
                        CHINA                                           270                                                          61               0 7

                          EU                                                   302                                                                          91              0 23
                        CHINA                                                        366                                                                                      78         0      4
   Up until 2020 2019

                          EU                                             283                                                                     79                  3 16
                        CHINA                                                        361                                                                                       89              0 5

                          EU                                             278                                                                73              0       16
                        CHINA                                                         375                                                                                           83              0 4
   2021 Q1

                          EU        76           21 0 5
                        CHINA             118                       28        0 1

                                0        50           100                      150          200               250                    300                    350              400              450               500

SAMR conditionally approves Cisco's acquisition of Acacia

On 19 January 2021, SAMR approved Cisco Systems Inc ("Cisco")'s proposed acquisition of Acacia
Communications Inc ("Acacia"), subject to behavioural conditions.

SAMR found that significant competition concerns would arise from the following vertical relationship between
the parties, i.e., (upstream) the global market for coherent digital signal processors ("DSP") where Acacia is
active, and (downstream) the Chinese market for optical transmission system where Cisco is active.

SAMR upon its review came to the view that the combined entity would have both the ability and incentive to
implement anti-competitive input foreclosure as a result of this transaction. Regarding the abilities, it is noted
that (i) Acacia is the no.1 supplier of coherent DSPs with a global market share of 45-50% and share of 40-45%
in China; (ii) coherent DSPs serve as core components in an optical transmission system and to a large extent
determine how competitive such a system can be; (iii) customers’ (i.e., suppliers of optical transmission
systems) switching costs of coherent DSPs are particularly high; (iv) entry barriers of coherent DSPs are
prohibitively high and thus it would take time for new market entrants to emerge. Relating to the motives, due to
the development of data centre and 5G technology, demands of optical transmission system have been
increasing. This would incentivize the combined entity to reduce sales of coherent DSPs to Cisco's competitors
and/or raise prices of coherent DSPs to gain more profits.

To address these concerns, the following commitments, among others, have been offered by the parties and
agreed by SAMR - (i) continue to perform each party's the existing contracts without termination unless
otherwise requested by customers; (ii) continue to supply coherent DSPs to Chinese customers on FRAND
terms; (iii) not to impose tying/bundling or other unreasonable trading terms when supplying coherent DSPs;
and (iv) hold training sessions for management and employees to ensure compliance with the commitments.

Outside China, as of 1st quarter of 2021, this transaction has been unconditionally approved by competition
authorities in the US, Germany and Austria.

ANTITRUST IN CHINA AND ACROSS THE REGION                                                                                                                                           CLIFFORD CHANCE                    10
China Focus


Other failure-to-file fines in this quarter

In addition to the failure-to-file fines reported in the tech development section, SAMR also published
the following gun-jumping decisions in the first quarter of 2021. None of the transactions were found to
give rise to any anti-competitive effects:

• Xinjiang Xuefeng Investment Holding Co., Ltd. was fined RMB 300,000 (USD 46,385) for the failure
  to notify its acquisition of 39.5% interest in Xinjiang Yuxiang Huyang Chemical Co., Ltd. in 2018.

• Zhuhai Huafa Property Management Services Co., Ltd. and Beijing Jones Lang LaSalle Property
  Management Services Co., Ltd. were each fined RMB 350,000 (USD 54,287) for the failure to notify
  their establishment of a joint venture in 2019.

• Baoneng Motor Group Co., Ltd. was fined RMB 350,000 (USD 54,287) for the failure to notify its
  acquisition of 51% interest in Qoros Automotive Co., Ltd. in 2017.

• Zhongshan Lexing Enterprise Management Consulting Co., Ltd. was fined RMB 300,000 (USD
  46,385) for the failure to notify its acquisition of control over Shenzhen Soling Industrial Co., Ltd. in

• Wuhan Jinyu Free Trade Development Co., Ltd. and Fenghao Logistics (Beijing) Co., Ltd. were
  each fined RMB 150,000 (USD 23,040) for the failure to notify their establishment of a joint venture
  in 2016.



ANTITRUST IN CHINA AND ACROSS THE REGION                                                  CLIFFORD CHANCE     11
China Focus


Enforcement trends* – Q1 2015 to Q1 2021

700 0                                                                                                                                                        16
600 0                                                                                                                                                        14
500 0
400 0                       9
                 8                                                                                                                                   9
300 0                                        7                                               6                                                   6
                      5                                                                                                     5                                6
                                                                     5         5
200 0                                                                                               4         4         4               4   4
                                                                3                     3                                                                      4
                                  2              994.24
100 0       2                                                      538.31 1
            372.92        408.54                                                                          1 195.11                  2 218              306.06 2
                     149.1       9.22 21.1 19.48        5.22 28.16                          89.89 52.19             14.95 89.45 7.46        4.59 6.27
                                                                        671.34  10.78 13.86             10.04
   0                                                                                                                                                          0
         Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
        201 5 201 5 201 5 201 5 201 6 201 6 201 6 201 6 201 7 201 7 201 7 201 7 201 8 201 8 201 8 201 8 201 9 201 9 201 9 201 9 202 0 202 0 202 0 202 0 202 1

                                          Fines Amount (RMB Million)                                    Cas e Number

*Note: From Q1 2015 to Q1 2018, figures include both NDRC and SAIC; from Q2 2018, figures are for SAMR.

                                  Date                                      Total fine        Minimum             Maximum         % of
Case                                                  Issue                                                                                       Co-
                                  announced                                 (RMB '000)        (RMB '000)          (RMB '000)      Turnover

Batroxobin API supply             29 January          Abuse of
                                                                            100,700           N/A                 N/A            2%              N/A
SAMR                              2021                dominance

Driving training service          29 January
                                                      Market dividing       1,347             83                  330            2%              N/A
Jiangsu AMR                       2021

                                                      Price fixing,
Cement supply                     9 February          output
                                                                            141,723           2,412               25,618          2%              N/A
Shandong AMR                      2021                restriction,
                                                      market dividing

Tap water supply                  18 February         Abuse of
                                                                            2,495             N/A                 N/A             6%              N/A
Yunnan AMR                        2021                dominance

The following cases all concern price fixing led by industry association

                                                                            Fine on                                                               Leniency/
                                  Date                Total fine                        Minimum                   Maximum         % of
Case                                                                        association                                                           Co-
                                  announced           (RMB '000)                        (RMB '000)                (RMB '000)      Turnover
                                                                            (RMB '000)                                                            operation

Cruise service                    29 January
                                                      1,813                 200               49                  417             1%              N/A
Shanghai AMR                      2021

Insurance service                 29 January
                                                      200                   200               N/A                 N/A             N/A             N/A
Anhui AMR                         2021

Fire safety technology
                                  29 January
inspection service                                    9,479                 400               7                   1,664           1%              N/A
Hainan AMR

Used car trade                    29 January
                                                      4,400                 300               117                 1,316           2%-3%           Yes
Zhejiang AMR                      2021

Bulk cement supply                18 March
                                                      43,904                500               296                 19,727          1%-2%           Yes
Sichuan AMR                       2021

ANTITRUST IN CHINA AND ACROSS THE REGION                                                                                           CLIFFORD CHANCE            12
China Focus


SAMR fines Simcere for refusing to supply batroxobin API

On 29 January 2021, SAMR published its penalty decision on Simcere for abuse of dominance in the
Chinese market for batroxobin active pharmaceutical ingredient ("API") through refusal to supply.

Simcere by far is the leading supplier of batroxobin API in China, and it has intended to enter the
downstream market for batroxobin injection. From November 2019, the sole producer of batroxobin
injection in China reached out to Simcere to purchase batroxobin API. Simcere refused to respond to such
purchase offers, and tried to condition its supply of batroxobin API on acquisition of equity stake in this
injection producer. SAMR found that as a result of Simcere's refusal to supply, the batroxobin injection
producer's business was forced to suspend production and thus the supply of batroxobin injections in the
Chinese market was severely disturbed. In consequence, the downstream batroxobin injection business
would be either sold to Simcere or driven out of the market. SAMR concluded that Simcere's conduct
infringed Article 17(3) of the AML and imposed a fine of RMB 100.7 million (USD 15.62 million) on Simcere,
amounting to 2% of its revenue in 2019.

Jiangsu AMR fines nine driving schools for market division

On 29 January 2021, Jiangsu Administration for Market Regulation ("Jiangsu AMR") fined nine driving
schools in Jiangsu Province for dividing markets. Jiangsu AMR found that in July 2016, the nine driving
schools entered into an agreement to designate one of the nine schools to manage business operation of
the other schools. The revenue generated following implementation of the agreement from July to
December 2016 was then divided among the nine schools in line with fixed percentages (based on the
number of cars owned by each driving school). Jiangsu AMR concluded that the nine schools have violated
the Article 13(3) of the AML by reaching a monopoly agreement to divide sales market. Jiangsu AMR
imposed a fine on each of the nine companies amounting to 2% of their respective sales in 2016, which in
total is RMB 1.35 million (USD 208,755).

Shandong AMR fines eight cement companies for horizontal monopoly agreements

On 9 February 2021, Shandong Administration for Market Regulation ("Shandong AMR") fined United
Cement and other seven cement companies for implementing horizontal monopoly agreements. United
Cement was established in February 2017 by the other seven companies ("Members") with overlapping
management. Shandong AMR upon investigation found that United Cement and the Members were
engaged in the following anti-competitive conduct: (i) price-fixing: coordinated prices of cement products
through meetings and internal documents, and established a Price Control Committee to monitor
implementation of the agreed prices; (ii) output restriction: without local government's instructions,
implemented staggered production and carried out additional kiln shutdown for thirty days in 2017; (iii)
market division: reached an agreement on 21 March 2018 to divide cement sales areas into six districts,
and each Member could only sell their products in the designated district. Shandong AMR found that the
above conduct violated Articles 13(1), (2) and (3) of the AML. As United Cement and Members have
rectified their infringing behaviour, also taking into account COVID-19's impact, Shandong AMR imposed a
fine on each of United Cement and Members amounting to 2% of their respective sales in 2018, with a total
amount of RMB 141,722,888 (USD 21,782,808). United Cement's illegal gains amounting to RMB
86,572,186 (USD 13,306,145) were also confiscated.

ANTITRUST IN CHINA AND ACROSS THE REGION                                              CLIFFORD CHANCE    13
China Focus


Yunnan AMR fines a local water supplier for imposing unreasonable trading conditions

On 18 February 2021, Yunnan Administration for Market Regulation ("Yunnan AMR") fined Sitong Taixing,
a water supplier, for abuse of dominance through imposing unreasonable trading conditions. Sitong Taixing
is the exclusive water supplier in Mengzi city, Yunnan province. From 2014 to 2018, Sitong Taixing
conditioned its supply of tap water on the customer engaging Sitong Taixing to construct the relevant water
supply facilities. This distorted competition in the market for the construction of water supply facilities.
Yunnan AMR concluded that Sitong Taixing violated Article 17(5) of the AML which prohibits tie-in sales
and imposition of unreasonable trading conditions by dominant players. As Sitong Taixing's infringement
lasted for four years irrespective of the local authorities' warnings, Yunnan AMR imposed a relatively heavy
fine of RMB 2,495,422.79 (USD 383,296.94) amounting to 6% of Sitong Taixing's sales in 2018.

Provincial AMRs hit hard on trade associations for price-fixing in this quarter

In this quarter alone, SAMR published five penalty decisions made by provincial-level Administrations for
Market Regulation ("local AMRs") concerning price-fixing led by industry associations in various sectors.
This marks the Chinese competition authorities' increasing focus on the role of industry associations in anti-
competitive behaviours. In this quarter's five cases, the local AMRs invariably held that the associations
concerned infringed Article 16 of the AML by organizing undertakings to reach monopoly agreements, and
the participating undertakings infringed Article 13(1) of the AML for price fixing. Please refer to below for
more details of the five cases:
• Shanghai Tourism Industry Association ("STIA") – Since 2011, STIA through one of its branches has
   organized nine cruise operators to fix or increase ticket prices of cruise services and has imposed
   penalties in case of non-compliance. A ticket centre has been engaged to monitor the implementation of
   the price-fixing agreements. Shanghai Administration for Market Regulation imposed a fine of RMB
   200,000 (USD 30,760) on STIA, and a total fine of RMB 1.61 million (USD 247,618) on the nine
   operators, amounting to 1% of their respective revenues in 2015.

• Bozhou Insurance Industry Association ("BIIA") – In May 2018, BIIA, together with six government
  authorities, jointly issued a notice regarding mandatory work safety liability insurance for high-risk
  industries in Bozhou City, Anhui Province. The notice designated two companies as the exclusive
  insurance underwriters for all work safety liability insurances in Bozhou with a fixed insurance premium.
  The six government authorities were investigated under separate proceedings. Anhui Administration for
  Market Regulation fined BIIA RMB 200,000 (USD 30,760).

• Hainan Fire Protection Association ("HFPA") – In 2017, HFPA through a branch drafted three policies
  to monitor its members' inspection fees. According to HFPA's policies, all members shall adopt a fixed
  price for supplying inspection services, and non-compliant members are subject to a pecuniary penalty.
  Hainan Administration for Market Regulation imposed a fine of RMB 400,000 (USD 61,080) on HFPA,
  and a total fine of RMB 9,078,638.53 (USD 1,396,294.61) on the participating members, amounting to
  1% of their respective revenues in 2018.

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China Focus


• Jiaxing Used Car Industry Association ("JUCIA") – In May 2018, JUCIA convened a meeting with all
  the nine used car dealers in Jiaxing City, Zhejiang Province, to discuss an increase of service fees for
  used car trading. The participants reached an agreement to implement a fixed service fee and a penalty
  in case of non-compliance. Zhejiang AMR imposed a fine of RMB 300,000 (USD 46,140) on JUCIA, and
  a total fine of RMB 675,881.97 (USD 103,950.65) on eight car dealers, amounting to 2% to 3% of their
  respective revenue in 2019. One dealer was exempt from the penalty for reporting the infringement to
  the authority.

• Sichuan Cement Association ("SCA") – In October 2016, SCA organized six cement companies to
  reach an agreement to increase prices of bulk cement products. Sichuan Administration for Market
  Regulation fined SCA RMB 500,000 (USD 76,800), the highest fine under the AML for industry
  associations, for its failure to mitigate the negative impact upon authorities' warning. One cement
  company was exempted from the penalty for reporting the infringement, whereas the others were fined
  RMB 43,700,801 (USD 6,712,443) in total, amounting to 1% or 2% of their respective sales in 2016.

ANTITRUST IN CHINA AND ACROSS THE REGION                                              CLIFFORD CHANCE   15
Hong Kong

            CA refuses amendment to pleadings and expert evidence on damages and quantum

            On 5 January 2021, the Court of Appeal ("CA") dismissed the appeals against the decisions
            of Competition Tribunal (the "Tribunal") in refusing to grant leave to the defendant, Meyer
            Aluminium Limited (“Meyer”), for (i) amending its Points of Defence to expand its allegation of
            collusion; and (ii) adducing expert evidence on quantum of damages. The case before the
            Tribunal involves the first proceedings in which a competition law defence was raised in High
            Court actions, as Meyer alleges price fixing and collusion between its two industrial diesel
            suppliers, Taching Petroleum Company Limited and Shell Hong Kong Limited. As a result,
            such proceedings were transferred from Court of First Instance ("CFI") to the Tribunal.

            The amendments sought by the defendant seek to add further unidentified parties to the
            colluding arrangement, by which it is advancing a substantially new case. In any event, the
            applications for amendment should first be made in the High Court actions coupled with
            applications for transfer of the expanded allegations to the Tribunal. As for the application for
            leave to adduce expert evidence on damages and quantum, the CA is of the view that the
            proper forum for such application should be the CFI, instead of the Tribunal.

            Tribunal imposes pecuniary penalty on decoration contractors

            In this case, decoration contractors acted in breach of the First Conduct Rule by allocating
            customers and coordinating pricing in relation to the provision of renovation services at a
            public housing estate. On 5 January 2021, the Tribunal handed down its judgment on
            pecuniary penalties, imposing a total fine of HKD 3.26 million (USD 419,236) on eight
            respondents. The respondents who cooperated with the Competition Commission ("HKCC")
            at an early stage (i.e. after filing of defences) received a 10% discount on their fines. The
            other respondents who only cooperated after the HKCC had completed its preparation of
            documents and evidence for the trial received a 5% discount on their fines.

            HKCC issues infringement notices to six hotel groups and a tour counter operator for
            facilitating a price-fixing cartel

            On 17 February 2021, the HKCC issued infringement notices to six hotel groups and a tour
            counter operator, for facilitating a cartel arrangement between two competing travel service
            providers to fix and/or control prices of tourist attractions and transportation tickets sold at the
            premises of certain hotels in Hong Kong. All the recipients of the infringement notices
            admitted that they had contravened the First Conduct Rule and committed to take concrete
            measures to effectively enhance competition compliance within their respective businesses.

ANTITRUST IN CHINA AND ACROSS THE REGION                                                   CLIFFORD CHANCE     16

                  CAB upholds CCCS infringement decision against Uber and Grab

                  On 29 December 2020, the Competition Appeal Board ("CAB") dismissed Uber's
                  appeal against the decision of the Competition and Consumer Commission of
                  Singapore ("CCCS") that Uber's sale of its Southeast Asian business to Grab for a
                  27.5% stake in Grab resulted in a substantial lessening of competition in the ride-
                  hailing platformer market in Singapore. The CAB upheld (i) the directions issued by
                  CCCS to Uber and Grab at the material time to lessen the impact of the transaction on
                  drivers and riders and ensure the ride-hailing platform market remained open to new
                  players; and (ii) the financial penalty of SGD 6,582,055 (USD 4,915,283) imposed on
                  Uber. Uber was also ordered to pay CCCS’s costs in relation to the appeal.


    Indonesia issues first fine on predatory pricing

    On 15 January 2021, Indonesia Competition Commission ("KPPU") imposed a fine of IDR 22.3 billion
    (USD 1.5 million) on cement manufacturer Conch South Kalimantan Cement ("Conch") for predatory
    pricing. This is the first predatory pricing fine imposed by KPPU. KPPU found that from 2015 to 2019,
    Conch sold its Portland Composite Cement below costs, which are therefore significantly cheaper
    than competing products on the market. KPPU also found that Conch's parent company, Anhui
    Conch Cement Co. Ltd., is the largest cement manufacturer in China which provides financial support
    to Conch so that it can sustain the losses incurred by the below-cost pricing strategy. In
    consequence, Conch's market share grew to more than 40% in the South Kalimantan province, and
    at least five competitors were kicked out of the market. KPPU held that Conch has violated the Law
    Number 5/1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition. On 3
    February 2021, Conch appealed the KPPU decision to the Commercial Court under the Central
    Jakarta District Court, which upheld the KPPU decision on 4 March 2021.

    New leaders of Indonesian competition authority are appointed

    On 15 December 2020, Kodrat Wibowo and Guntur Saragih were appointed as the new chair and
    vice chair of the KPPU, respectively. Both Kodrat Wibowo and Guntur Saragih have been
    commissioners in KPPU since 2018 and are experts in economics. Kodrat Wibowo graduated from
    Oklahoma University with a PhD in economics and had experience in relation to economics while
    working at the Center for Economics and Development Studies at Padjadjaran University. Mr.
    Saragih holds a master's degree in economics and has taught Marketing Management and Strategic
    Management at University of Indonesia. Their office terms would expire on 27 April 2023.

ANTITRUST IN CHINA AND ACROSS THE REGION                                              CLIFFORD CHANCE   17

             JFTC approves Google's proposed acquisition of Fitbit

             On 14 January 2021, the Japan Fair Trade Commission ("JFTC") announced that they had
             approved a plan for the acquisition of Fitbit, a U.S. wearable device maker, by Google LLC.
             The acquisition did not meet the mandatory notification thresholds, but the voluntary
             notification thresholds (i.e., the total consideration for the acquisition was large and domestic
             consumers were expected to be affected) were met. During their review, the JFTC raised the
             concerns that, by completion of the acquisition, Google could make the health-related data
             which FitBit currently holds available for Google's advertising. Google proposed a remedy
             similar to that proposed to the European Commission (i.e. non-use of health-related data for its
             digital advertising for 10 years, maintaining access to users' health and fitness data without
             charging (subject to user consent) for 10 years, and continuing to license for free to Android
             OEMs for 10 years). The European Commission and other foreign competition authorities also
             reviewed this case, and the JFTC conducted its review in cooperation with these foreign
             competition authorities.

 Japanese digital platform bill comes into force

 On 1 February 2021, the Act on Improving Transparency and Fairness of Specified Digital Platforms
 ("TFDPA") became effective. The TFDPA has three features. Firstly, regarding the business area, currently
 it covers only online mall operators and app store operators. Secondly, regarding target companies, only
 certain companies meeting turnover thresholds will be regulated by the TFDPA (i.e. JPY 300 billion (USD
 3 billion) for online malls, JPY 200 billion (USD 2 billion) for app stores). Currently, six companies (i.e.
 Amazon Japan G.K., Rakuten Group, Inc., Yahoo Japan Corporation, Apple Inc., iTunes K.K. and Google
 LLC) are designated. Finally, regarding the obligations under the TFDPA, such companies will have three
 types of obligations: (i) disclosure of terms and conditions to vendors, (ii) setting up of a procedure to
 secure fairness, such as complaints handling; and (iii) annual reporting to the Japanese government,
 including self-assessment of their compliance with disclosure and fair process obligations.

 JFTC releases final report on digital advertising

 On 17 February 2021, the JFTC published a final report regarding digital advertising. Based on a survey,
 the JFTC pointed out in the report that digital platform operators engage in conduct that may restrict the
 business activities of their business partners or compromise fairness and transparency, for instance: (i) the
 restriction of transactions with competitors, (ii) the restriction of use of competing functions such as third-
 party ad verification services, (iii) abusive use of consumers' information and (iv) lack of transparency such
 as fee calculation. The JFTC will keep conducting fact-finding surveys on the digital market as well as
 exchanging opinions with other competition authorities.

 JFTC accepts BMW Japan's proposed commitments

 On 12 March 2021, the JFTC approved the commitment plan submitted by BMW Japan Corp. ("BMW
 Japan"), in relation to an alleged unfair trade practice by BMW Japan whereby it had asked dealers to
 formulate a sales plan which could not be attained in light of their past sales performance, and to register
 new cars in their own name in order to achieve the sales plan. BMW Japan's commitment plan included
 that the above actions have been and will be discontinued, and BMW Japan will report on compliance with
 the commitment plan to the JFTC annually for three years.

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                     JFTC releases the final guidelines on cooperation with start-ups

                     On 29 March 2021, the JFTC and the Ministry of Economy, Trade and Industry jointly
                     issued guidelines on business collaboration with start-ups. These guidelines aim to
                     show an ideal form of contract between a start-up and a large enterprise when they
                     proceed with business collaboration in order to avoid an unbalanced contracting
                     situation, such as where the start-up's patent rights are monopolized by the large
                     enterprise or the large enterprise applies for patents of its own peripheral technology.
                     In particular, the guidelines focus on four types of contract: NDAs, proof of concept
                     agreements, joint research agreements, and licence agreements, and provide case
                     studies and show the direction of solutions that the JFTC suggests.

 JFTC publishes a report concerning the impact of algorithms and AI

 On 31 March 2021, the JFTC's study group on competition policy in digital markets, which consists of
 professors and experts, published the Report on Algorithms/AI and Competition Policy. The report aims to
 help the JFTC to properly address the risk to competition associated with algorithms and AI. The report
 indicated five areas where algorithms and AI are relevant to competition policy: concerted practices,
 ranking manipulation, personalization (which could lead to discriminatory treatment), competitiveness (the
 JFTC needs to have cross-layer perspectives when it looks at relevant markets), and issues regarding
 digital platforms (issues surrounding algorithms/AI would be relevant to digital platforms).

  MyCC fines online customs platform for exclusive dealing

  On 16 February 2021, the Malaysia Competition Commission ("MyCC") imposed a fine of MYR 10.3
  million (USD 2.54 million) on Dagang Net Technologies Sdn Bhd ("Dagang Net") for exclusive dealing.
  Dagang Net currently is the only authorized operator of the National Single Window ("NSW") in Malaysia.
  NSW is an electronic system to transfer customs-related documents between end users and the
  Malaysian customs authority. A recent development is that NSW will soon be replaced by a new customs
  clearance system called the uCustoms system, and the Malaysian customs authority has appointed
  Edaran Trade and other operators to run uCustoms. MyCC found that in reaction to uCustoms, Dagang
  Net required its NSW software providers not to engage with service providers (such as Edaran Trade)
  which are appointed to operate uCustoms. Therefore, MyCC held that Dagang Net's conduct constituted
  abuse of market dominance through exclusive dealing. Dagang Net's parent company announced on 26
  February 2021 that it would appeal MyCC's decision.

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South Korea
            Korean Cabinet passes the Act on Fair Intermediate Transactions on Online Platforms

            On 26 January 2021, the Cabinet approved the Act on Fair Intermediate Transactions on
            Online Platforms, which requires online platform operators which meet a revenue threshold
            (expected to be more than KRW 10 billion (USD 9 million)) to sign contracts with vendors on
            key terms such as commission rates and to notify vendors when contract details change or
            services are suspended.

            KFTC approves Apple's consent decree to resolve allegations of antitrust violations

            On 3 February 2021, the Korea Fair Trade Commission ("KFTC") announced that it had
            approved the consent decree proposed by Apple Korea regarding the alleged abuse of its
            market position by imposing advertising and repair service costs on mobile carriers. Apple
            Korea would revise the relevant clauses in their contracts and provide KRW 100 billion (USD
            90 million) in support, including support to a research and development centre for mobile
            carriers. An auditor to be appointed by the KFTC would monitor the progress of
Naver appeals KFTC's penalty decision on search algorithm manipulation

On 24 February 2021, it was reported that Naver, a South Korean internet company, had appealed the
KFTC's decision in October 2020 to impose a fine of KRW 26.7 billion (USD 23 million) on manipulation of
search algorithms.

KFTC's survey on online travel agencies and app stores reveals unfair market practices

On 2 March 2021, the KFTC published the results of a survey of online travel agencies and app stores.
The result shows that about 31% of respondents answered that they were subject to unfair treatment by
online travel agencies and about 40% that answered they experienced unfair treatment by app store
operators (including treatment in relation to the use of proprietary payment systems of app stores). The
KFTC said that based on these survey results, it would strengthen the monitoring of unfair transactions by
online travel agencies and app stores.

Five online travel agencies correct MFN clauses upon KFTC's investigation

On 15 March 2021, the KFTC announced that five online travel agencies (Interpark,, Agoda,
Expedia, and had amended or deleted their most-favoured nation clauses after the KFTC's

KFTC fines four car parts manufacturers for bid-rigging

On 24 March 2021, four car parts manufacturers were fined for bid-rigging in relation to 99 tenders by
Hyundai Motor and Kia Motors between 2007 and 2018. The total fine was KRW 82.4 billion (USD 73

KFTC refers Apple Korea and its executive to prosecution for hindering investigation

On 31 March 2021, KFTC announced that it had referred Apple Korea and a senior executive to the
prosecutors regarding interference with the KFTC's investigation. According to the KFTC, Apple Korea
intentionally blocked its network during the KFTC's on-site investigation in June 2016, and refused to
submit data regarding such network block, and the senior executive of Apple Korea physically blocked
KFTC investigators from entering Apple Korea's premises in November 2017. The KFTC imposed a fine of
KRW 200 million (USD 180,000) for network blocking and KRW 100 million (USD 90,000) for refusal to
submit data. This is the first case in South Korea where a company has been fined for obstructing network
ANTITRUST IN CHINA AND ACROSS THE REGION                                              CLIFFORD CHANCE   20

CCI fines a book association for price-fixing and supply restriction

On 23 February 2021, the Competition Commission of India ("CCI") fined the Federation of
Publishers' and Booksellers' Associations in India ("FPBAI") for price-fixing and supply
restriction. FPBAI is a trade association in book publishing industry and has over 4000
members that are active in India. CCI launched an investigation against FPBAI in 2019
following a complaint from an FPBAI member, and found that FPBAI (i) restricted the
discounts that its members could offer to institutional buyers, thereby indirectly fixing the
members' sales prices; and (ii) coerced members to refrain from participating in certain
book procurements, which indirectly limited the supply of books in the country. As the
Competition Act 2002 expressly prohibits horizontal anti-competitive conduct that aims to
directly or indirectly fix prices or limit supply, CCI fined FPBAI INR 200,000 (USD 2,727)
and FPBAI's current president and former president INR 100,000 (USD 1,364) individually
for their leading role in FPBAI's anti-competitive conduct.

CCI issues an interim order over its investigation of MMT-Go and OYO's exclusive arrangements

On 9 March 2021, CCI issued an interim order requiring MMT-Go, an online travel booking platform to
immediately restore the listing of two hotel chains (FabHotels and Treebo) on its platform. The interim
order came in the context of the CCI's investigation on whether MMT-Go has provided preferential
treatment to OYO through making OYO the exclusive hotel supplier on the MMT-GO platform.
FabHotels and Treebo were previously de-listed by MMT-Go from its platform given the exclusive role of

The CCI found prima facie that MMT-Go has substantial market power in the downstream market for
online hotel booking in India, whereas OYO has substantial market power in the upstream market for the
supply of budget hotels. The CCI tends to think that given the market power of MMT-Go and OYO, their
exclusionary agreement would likely tip the markets in favour of MMT-Go and OYO and lead to
irreversible harm to competition. Timing is critical in dynamic markets, hence the interim order. CCI
caveated that nothing in the interim order amounts to a final opinion on the merits of the case. It was
reported that OYO had challenged the interim order before the Gujarat High Court and the court has
suspended the Order.

CCI starts investigating WhatsApp's new privacy policy

On 24 March 2021, CCI issued an order to investigate WhatsApp's latest update to its privacy policy.
According to the policy notification, from 8 February 2021 onwards, WhatsApp's users would be forced
to accept the new terms of the policy in its entirety, which include, among others, sharing WhatsApp
users' data with Facebook (WhatsApp's parent company) and/or other Facebook's subsidiaries. Note
that the CCI in previous decisions found WhatApp to be dominant in the market for Over-The-Top
messaging apps through smartphones in India. Considering that the new policy does not provide users
with a choice not to share their data and information and that the information sharing scheme itself is far
from transparent, the CCI is of the prima facie view that WhatsApp is engaged in exploitative conduct in
violation of Competition Act 2002. The CCI needs to complete its investigation report within 60 days
which is significantly shorter than in other cases.

ANTITRUST IN CHINA AND ACROSS THE REGION                                                 CLIFFORD CHANCE      21

ACCC announces its 2021 enforcement and
compliance priorities

On 23 February 2021 at the annual Committee for Economic
Development Australia address the Chair of the Australian
Competition and Consumer Commission ("ACCC") Rod Sims
outlined the ACCC's compliance and enforcement priorities for
2021. As with many other competition agencies, a number of
these priorities relate to consumer and competition issues arising
from the COVID-19 pandemic (such as travel or event
cancellations and the domestic air travel market). Issues relating
to digital platforms, the pricing and selling of essential services
(with a focus on energy and telecommunications), allegations of
anti-competitive conduct in the financial services sector and
conduct affecting competition in the commercial construction
sector (with a focus on large public and private projects) are also
among the ACCC's 2021 enforcement priorities. Cartel conduct
causing detriment in Australia, anti-competitive agreements and
practices, as well as the misuse of market power, have been
identified as enduring priorities for the ACCC.

Full Federal Court clarifies statutory unconscionable conduct law

An appeal by the ACCC was upheld by the Full Federal Court on 19 March 2021, declaring that Quantum
Housing Group Pty Ltd ("Quantum") engaged in an unconscionable system of conduct in its dealings with
investors in breach of the Australian Consumer Law ("ACL"). The ACCC had appealed the trial judge's
decision to clarify whether "special disadvantage" was necessary to establish unconscionable conduct under
the ACL. The penalties AUD 700,000 (USD 536,111) for Quantum, AUD 50,000 (USD 38,293) for the sole
director) were not appealed by the ACCC.

As stated by ACCC Chair Road Sims, the decision importantly made clear:

• for conduct to be held "unconscionable" under the ACL (and other similar laws) it is not necessary to
  establish that the business engaging in the conduct exploited some disadvantage or vulnerability with
  respect to consumers or small businesses affected (although this may often be the case); and

• the correct approach to assess statutory unconscionability is to focus on whether the conduct is a sufficient
  departure from the norms of acceptable commercial behaviour so as to be against conscience or offend

Quantum was an approved participant of the National Rental Affordability Scheme ("NRAS"). In the ACCC's
proceedings against Quantum, it was alleged that Quantum pressured property investors participating in the
NRAS to terminate the arrangements with their existing property managers and to retain property managers
recommended by, approved by or with commercial links to Quantum. Quantum's sole director also admitted
liability for false or misleading representations and unconscionable conduct. In December 2019 Quantum
ceased trading and is in liquidation.

ANTITRUST IN CHINA AND ACROSS THE REGION                                                 CLIFFORD CHANCE   22

Epic files proceedings against Google in Australia

Epic Games, Inc and Epic Games International S.à r.l. ("Epic")
filed proceedings against Google LLC, Google Asia Pacific Pte.
Ltd. and Google Payment Australia Pty Ltd ("Google") in the
Federal Court of Australia on 10 March 2021. The proceedings
follow those brought by Epic against Apple in the Federal Court in
November 2020. Epic is alleging that Google's conduct hinders or
prevents the ability of Epic (and other app developers) from
distributing its apps to Android devices in Australia in any way
other than through Google's own app store (the Google Play
Store) and that Google also forces Epic (and other app
developers) to use Google's in-app payment processer (Google
Play Billing) providing Google with a near-monopoly in the android
app distribution market and android in-app payment processing
market respectively. The proceeding follows a US lawsuit brought
by Epic against Google in August 2020.

ACCC releases Digital Platforms Services Inquiry Issues Paper on Google choice screens

As part of its five-year inquiry into the supply of digital platform services in Australia, the ACCC has published
an Issues Paper (11 March 2021) to inform its September 2021 Interim Report on potential competition and
consumer issues in the provision of web browsers and general search services to Australian consumers and
in particular, the impact of default arrangements. The ACCC is also seeking views on the use of "choice
screens" (as announced in August 2019 by Google, said to provide users of new Android mobile devices with
a choice of search engines) and is receiving submissions on the operation of browsers and general search
services in Australia until 15 April 2021.

In response to the ACCC's Digital Platforms Inquiry Final Report (26 July 2019) which found that Google had
substantial market power in search services and advertising, the Australian Government had asked that the
ACCC monitor and report back to the Government in 2021 regarding Google's rollout of default internet
browser and search engine choice options on Android devices in Europe. The ACCC's Digital Platforms
Services Inquiry Final Report is not due until 31 March 2025.

Interim Report for ACCC's Digital Services Inquiry declares lack of competition in ad tech affecting
consumers, advertisers and publishers

Released publicly on 28 January 2021, the ACCC's Interim Report for its Digital Advertising Services Inquiry
considers how to address Google's industry-leading position and concerns about opacity in the operation and
pricing of ad tech and ad agency services. Proposals from the Interim Report include mandating the
separation of data sets held by large incumbents, to make it easier for rival ad tech providers to enter and
compete in the supply of ad tech services. The Interim Report also supports the ACCC's previous
recommendations from its Digital Platform Inquiry to introduce an unfair practices provision in the Australian
Consumer Law and the establishment of an ombudsman scheme to address digital platform complaints and

ANTITRUST IN CHINA AND ACROSS THE REGION                                                   CLIFFORD CHANCE    23
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