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ICC COMPENDIUM OF
ANTITRUST DAMAGES ACTIONS
CHINA
Court decisions
in key jurisdictionsICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
©2021, International Chamber of Commerce (ICC)
This chapter is part of the ICC Compendium of Antitrust Damages Actions (2021) published
by ICC.
ICC holds all copyright and other intellectual property rights in this collective work, and
encourages its reproduction and dissemination subject to the following:
b ICC must be cited as the source and copyright holder mentioning the title of the
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b The work may not be reproduced or made available on websites except through a link
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Permission can be requested from ICC through ipmanagement@iccwbo.org.
International Chamber of Commerce
33-43 avenue du Président Wilson
75116 Paris
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ICC Publication No. KS101E
2CHINA
Introduction
This chapter is part of the ICC Compendium of Antitrust Damages Actions (the
“Compendium”) which can be read in full on the ICC website at www.iccwbo.org.
Designed to provide decision-makers with a comparative overview of the issues most
frequently arising in private antitrust litigation in key jurisdictions, the Compendium
includes an unprecedented collection of decisions issued in the same jurisdictions. This
database is the essential complement to the overviews for a comparative approach and
will allow a better understanding of the rules presented in the compendium. Each case
summary will provide users with a brief description of the facts of the case and outline
the solutions brought by the courts to the issues raised by the case with regard to the
topics addressed in the overviews. Rather than performing keyword searches through the
common online databases in each jurisdiction, antitrust practitioners and enforcers will have
all key decisions at hand. Courts will be able to see what other courts in other jurisdictions
have decided on a given issue, which may contribute to a greater consistency and, within
the European Union, to enhance integration. This compendium also intends to provide
competition authorities with a general view on the consequences of their decisions.
Methodology for the selection of cases
The judgments that are selected thereafter are the most relevant damages cases under
the Anti-monopoly Law of China since 2008, including both follow-on and stand-alone
proceedings, and are final.
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 3ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Country: China
Case Name and Number: Dongguan Hengli Guochang Electrical Store v. Dongguan Shengshi
Xinxing Gree Trading Co., Ltd. & Dongguan Heshi Electric Appliance Co., Ltd. Vertical Monopoly
Agreement Dispute Case. Case No.: (2016) Guangdong Civil Final No. 1771
http://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=c511ba00956
c4d2cae2fa97a00be5dbe
Date of judgment: 19 July 2018
Economic activity (NACE Code): G.46.4.3 — Wholesale of electrical household appliances
Court: The High People’s Court of Was pass on raised (yes/no)? N/A
Guangdong Province
Claimants: Dongguan Hengli Guochang (If in EU) Was the EU Damages Directive
Electrical Store referred to/relied upon (and if so, for
(“Guochang” Store”) procedural or substantive provisions)?
N/A
Defendants: Dongguan Shengshi Were damages awarded (if so, how much
Xinxing Gree Trading Co., Ltd. (“Shengshi and to whom)? If not, why not (e.g. lack
Company”) & Dongguan Heshi Electric of standing, causal link)? Was there
Appliance Co., Ltd. (“Heshi Company”) another outcome or remedy? No. Because
the claimant failed to prove the minimum
resale price agreement in this case has
the effect of excluding or restricting
competition.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 4.861million (US$ 0.7346 million)
current status/outcome: The High
People’s Court of Guangdong Province
heard the appeal of the case and issued
the final judgment on 19 July 2018. The
Court upheld the judgment of the first-
instance and dismissed the Claimant’s
appeal.
Key Legal issues: Is the dispute likely to be settled
privately? No.
• The constitution of vertical anti-
competitive agreement.
• Civil liability of participants of vertical
anti-competitive agreement.
4 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Direct or indirect claims? Direct Method of calculation of damages: N/A
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yang (Sabrina)
WANG, Senior Counsel, Commerce
& Finance Law Offices, wangyang@
tongshang.com
Follow-on (EC or NCA?) or stand-alone?
Stand-alone.
Brief summary of facts
Hengli Guochang Electrical Appliances Store (“Guochang Store”), Shengshi Xinxing Gree
Trading Co., Ltd. (“Shengshi company”), Heshi Electric Co., Ltd. (“Heshi company”) signed
the 2012 and 2013 “Tripartite Agreement on Sales of Household Air Conditioners for Gree
Electric Appliances in Dongguan”, expressly stipulating that Guochang Store must abide
by the relevant systems and requirements of Shengshi Company’s market management
specifications, and in the process of terminal sales, the minimum retail price shall not be
lower than Shengshi Company’s minimum retail price per period, and shall not cause any
form of low price behaviour. At the beginning of 2015, Guochang Store planned to terminate
the cooperative relationship with Shengshi Company and Heshi Company. Heshi Company
did not fully refund the “maintenance deposit” paid by Guochang Store on the grounds
that Guochang had violated the agreement to sell products below the minimum retail price
during February 2013 and was fined RMB 13,000 (US$ 1,964) by Shengshi Company on
the basis of the agreement. Therefore, Guochang Store filed a lawsuit with the Guangzhou
Intellectual Property Court in the first instance court on 15 May 2015.
Brief summary of judgment
On 30 August 2016, the Guangzhou Intellectual Property Court made a judgment of
first instance, dismissed the claimant Guochang Store’s claim, and determined that the
agreement of Shengshi Company to limit the minimum resale price was not an anti-
competitive agreement as defined in the Anti-Monopoly Law.
Guochang Store refused to accept the judgment of the first instance court and appealed to
the Guangdong High People’s Court.
On 19 July 2018, High People’s Court of Guangdong Province confirmed the findings of
the lower court. It held that Shengshi Company did not breach the Anti-monopoly law. In
particular, the Court held that competition in the home air-conditioning product market
was sufficient (although Gree’s products enjoyed a comparative advantage) and that
Shengshi Company had not maintained minimum resale price. In any case, the behaviour at
hand did not lead to the evidence provided by Guochang Store and the court’s ex-officio
evidence, although Gree’s home air-conditioning products have a comparative advantage
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 5ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
in the relevant market. Considering the sufficient competition in the home air-conditioning
product related market, it cannot be concluded that Shengshi Company had maintained
the minimum resale price with the purpose of achieving high monopoly profits, nor had the
behaviour led to the serious consequences such as foreclosure or restriction of excluding
and restricting competition.
Evidence provided by the defendant can prove that the air-conditioning product market
in Dongguan was fully competitive, and the Gree brand did not benefit from an absolute
advantage in the air-conditioning market in the region amounting to, and it is not enough
to form a dominant market position. Even if the Gree air-conditioning brand limited
the minimum sales price, consumers could completely choose other similar brands.
In the industrial chain, there was no evidence that the competitive relationship of air-
conditioning product-related industries would be affected by the sales price limit of Gree
air-conditioning. On the other hand, the claimant and other dealers could still participate in
competition in many aspects such as pre-sales promotion, sales promotion and after-sales
service. In other words, even with in the same air-conditioning brand, consumers still had a
number of options so that intra-brand competition was not harmed.
Therefore, the claimant’s appeal was rejected and the original judgment was upheld.
6 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Pan Yao v. Shanghai International Commodity Auction Co., Ltd. Case
No.:(2017) Shanghai Civil Final No.75
http://www.hshfy.sh.cn/shfy/gweb2017/flws_view.jsp?pa=adGFoPaOoMjAxN6Opu6b
D8dbVNzW6xSZ3c3hoPTIPdcssz
Date of judgment: 11 May 2017
Economic activity (NACE Code): C.29.3.2 — Manufacture of other parts and accessories for motor
vehicles
Court: Shanghai High Court Was pass on raised (yes/no)? N/A
Claimants: PAN Yao (If in EU) Was the EU Damages Directive
referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Shanghai International Were damages awarded (if so, how
Commodity Auction Co., Ltd much and to whom)? If not, why not
(e.g. lack of standing, causal link)? Was
there another outcome or remedy? No.
The court held that the auction for non-
business vehicle licence plates operated
by the defendant was a performance of
an administrative function. It should not
be considered as a proper relevant market
for the purpose of the Anti-monopoly law.
The case was therefore dismissed as lack
of standing.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 300 (US$ 44)
current status/outcome: Yes. Shanghai
High Court heard the appeal of the
case and issued the final judgment on
11 May 2017. The appeal court upheld
the judgment of the first-instance and
dismissed the Claimant’s appeal.
Key Legal issues: Is the dispute likely to be settled
privately? N/A
• Determination of market dominance
• Definition of relevant market
Direct or indirect claims? Direct Method of calculation of damages: N/A
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 7ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yi Jin, Partner, King
& Capital Law Firm, jinyi@king-capital.com
Follow-on (EC or NCA?) or stand-alone?
Stand-alone.
Brief summary of facts
The claimant was a resident of Shanghai and began to participate in the vehicle licence
plates auction for his motor vehicle since 2016. The defendant was the only auction house
for the city’s non-business vehicle licence plates designated by the Shanghai municipal
government. The claimant alleged the defendant abused the dominant position by charging
an unfairly high commission, and claimed the damage of RMB 300 (US$ 44) for his failure in
obtaining the vehicle licence plate through the auction.
Brief summary of judgment
The first instance court ruled that, in this case the defendant served as the executor for
allocating public resources under the Shanghai Municipal Transportation Commission’s
authorization. Therefore, the defendant was not an independent operator in this regard. On
this basis, Shanghai’s non-business vehicle licence plates auction service did not constitute
a competitive commodity market which might subject to the Anti-monopoly Law. The court
made the judgment in favour of the defendant on 3 January 2017. The Claimant appealed to
Shanghai Higher Court.
The appeal court affirmed the ruling of the lower court, and rejected the appellant’s claim
on 11 May 2017. The appeal court repeated the ruling of the lower court and ruled the
auction for non-business vehicle licence plates is essentially performing an administrative
function delegated by the Shanghai government. Therefore, it shall not be considered as
a proper relevant market for the purpose of the Anti-monopoly Law. The case is therefore
dismissed as lack of standing.
8 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Junwei Tian v. Beijing Carrefour Business Co., Ltd. Shuangjing Branch,
Abbott Trade (Shanghai) Co., Ltd. Case No.:(2016) Beijing Civil Final No.214
http://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=7
ad234f9cfdc453aae0aa8f22dc22004
Date of judgment: 22 August 2016
Economic activity (NACE Code): G.46.7.3 — Retail sale of pharmaceutical goods
Court: The Higher People’s Court of Was pass on raised (yes/no)? N/A
Beijing
Claimants: Junwei Tian (If in EU) Was the EU Damages Directive
referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Beijing Carrefour Business Were damages awarded (if so, how much
Co., Ltd. and to whom)? If not, why not (e.g. lack
Abbott Trade (Shanghai) Co., Ltd. of standing, causal link)? Was there
another outcome or remedy? No. The
claimant failed to prove the existence of
the RPM agreement, and therefore the
causal link.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 1,030 (US$ 453)
current status/outcome: The Higher
People’s Court of Beijing heard the appeal
of the case and issued the final judgment
on 22 August 2016. The Court upheld
the judgment of the first-instance and
dismissed the Claimant’s appeal.
Key Legal issues: Is the dispute likely to be settled
privately? No
• Proper defendant
• Burden of proof
• Compensation to indirect purchaser
Direct or indirect claims? Indirect Method of calculation of damages: N/A
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 9ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yi Jin, Partner, King
& Capital Law Firm, jinyi@king-capital.com
Follow-on (EC or NCA?) or stand-alone?
Follow-on. NDRC penalty No. [2013]4
Brief summary of facts
In 2014, Junwei Tian filed an action against Carrefour and Abbott seeking damages for the
difference between the amounts he paid to Carrefour for the infant formula manufactured
by Abbott,(the overpaid due to Abbot’s RPM practice) and the market price for Abbott’s
infant formula (the price at the competition level). The claimant argued on the ground that
National Development and Reform Commission had imposed an administrative penalty on
Abbott’s resale price maintenance (“RPM”), which caused his overpayment for the infant
formula. Abbott therefore shall be held plausible for his overpayment.
Brief summary of judgment
Beijing IP Court rejected Junwei’s arguments.
b Elements of the claim: The Court believed that the vertical agreement is required to
satisfy the element of “eliminating or restricting competition” to be regarded as an
anti-competitive agreement. The claimant shall bear the burden to prove the existence
of the RPM agreement, the damages caused by it, and the causation between the
RPM agreement and the damages.
b Existence of anti-competitive agreement: Although the administrative penalty was
imposed, only the manufacturer was punished but not the distributors. Therefore, the
penalty decision alone is not sufficient to establish that Carrefour had entered into an
RPM agreement with Abbott. Regarding the Supply agreement between Carrefour
and Abbott, the suggested retail price is not binding and does not have the effect of
eliminating or restricting competition.
b Compensation to the indirect purchaser: The Court confirmed that the claimant, as
an indirect purchaser, shall have the right of action. But his claim was dismissed by
inability of proving the causation.
The Higher People’s Court of Beijing dismissed the appeal of the claimant for failing to
prove the existence of an RPM agreement.
10 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Wu Xiaoqin v. Shanxi Broadcast & TV Network Intermediary (Group)
Co., Ltd., Dispute over Tie-in Sale. Case No.: (2016) Zuigaofa Minzai No.98
Date of judgment: 31 May 2016
Economic activity (NACE Code): J.60.2.0 — Television programming and broadcasting activities
Court: Supreme People’s Court of The Was pass on raised (yes/no)? N/A
People’s Republic of China
Claimants: Wu Xiaoqin (“Wu”, the (If in EU) Was the EU Damages Directive
Claimant) referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Shanxi Broadcast & TV Were damages awarded (if so, how much
Network Intermediary (Group) Co., Ltd. and to whom)? If not, why not (e.g. lack
(“Broadcast Company”, the Defendant) of standing, causal link)? Was there
another outcome or remedy? Yes. The
Broadcast Company was ordered to return
the digital TV programme fee of RMB 15
(US$ 2) back to Wu.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe N/A
current status/outcome: No.
Key Legal issues: Is the dispute likely to be settled
privately? No
• Whether Wu is the proper claimant
• Whether the Broadcast Company
conducted tying or attached other
unreasonable trading conditions to its
downstream customers
• Whether this case shall apply the Anti-
Monopoly Law (“AML”)
Direct or indirect claims? Direct Method of calculation of damages: N/A
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Zhan Hao Managing
Partner, Anjie Law Firm, zhanhao@
anjielaw.com
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 11ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Follow-on (EC or NCA?) or stand-alone?
Stand-alone.
Brief summary of facts
On 10 May 2012, Wu went to the Broadcast Company to pay the basic maintenance fee for
digital TV services. The Broadcast Company informed him that the fee was raised from RMB
25 to RMB 30 per month. Therefore, Wu paid RMB 90 for three months, including RMB 75 as
the digital TV basic maintenance fee and RMB 15 (US$ 2) as the digital TV programme fee
(value-added service). However, Wu learned afterwards that the subscription of digital TV
programs is only optional and voluntary. Therefore, Wu believed Broadcast Company had
harmed his right of free choice as consumer had been harmed by the Broadcast Company,
and further held that Broadcast Company as a public utility possesses a dominant position
in the digital TV market, and its behaviour of charging digital TV programme fees together
with the basic maintenance fee without any notice constitutes illegal tying.
On 4 June 2012, Wu filed an antitrust lawsuit and requested the court to declare that
Broadcast Company’s charge of digital TV programme fees was invalid, and the defendant
should refund him RMB 15 (US$ 2).
Brief summary of judgment
This case was heard by the local and high courts. Said courts ruled that the Broadcast
Company’s act of charging WU Xiaoqin a digital television programme fee of RMB 15 was
invalid, and ordered the former to return RMB 15 to WU. Later, on 31 May 2016, the Supreme
Court, after a retrial, set aside the second-instance judgment but affirmed the first-instance
judgment.
During the retrial, the Supreme Court found that the Broadcast Company holds a dominant
market position in Shanxi Province’s cable TV transmission service market. It held that the
involved bundling charges should be construed as tying, since the evidence produced could
not prove consumer choice over whether or not to pay for the basic maintenance fee or
the digital TV programme fee separately. Furthermore, there was no explanation to justify
said tying. Based on the above findings, the Supreme Court drew the conclusion that the
bundling of the basic digital TV service and the digital TV paid programme service violated
Article 17(5) of the AML. The Broadcast Company was ordered to return the digital TV
programme fee of RMB 15 back to Wu.
12 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Beijing Qihoo Technology Co., Ltd. v. Tencent Technology (Shenzhen)
Co., Ltd. and Shenzhen Tencent Computer System Co., Ltd. Case No.: (2013) Civil Division III
Final No. 4
http://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=
4fe3cab686984f8f91313ec8b921b96c
Date of judgment: 8 October 2014
Economic activity (NACE Code): J.62.09 — Other information technology and computer service
activities; J.61.9 — Other telecommunications activities
Court: The Supreme People’s Court Was pass on raised (yes/no)? N/A
Claimants: Beijing Qihoo Technology Co., (If in EU) Was the EU Damages Directive
Ltd. referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Tencent Technology Were damages awarded (if so, how much
(Shenzhen) Co., Ltd. Shenzhen Tencent and to whom)? If not, why not (e.g. lack
Computer System Co., Ltd. of standing, causal link)? Was there
another outcome or remedy? No. The
claimant failed to prove the defendant’s
dominant position.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 150 million (US$ 0.2422 million)
current status/outcome: The Supreme
People’s Court issued the final judgment
which upheld the judgment of the first-
instance and dismissed the Claimant’s
appeal.
Key Legal issues: Is the dispute likely to be settled
privately? No
• Definition of the relevant market
• Hypothetical Monopolist Test in a zero-
price market
• Dominant position in the internet
industry
Direct or indirect claims? Direct Method of calculation of damages: N/A
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 13ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yi Jin, Partner, King
& Capital Law Firm, jinyi@king-capital.com
Follow-on (EC or NCA?) or stand-alone?
Stand-alone
Brief summary of facts
In September 2010, the instant messenger software, Tencent QQ, and QQ Software Manager
were installed in a package and in the process of installation, users were not prompted that
QQ Software Manager would be installed simultaneously.
On 21 September 2010, Tencent Technology (Shenzhen) Co., Ltd. (hereinafter referred to as
“Tencent Company”) issued an announcement that QQ Software Manager and QQ Doctor in
use would automatically be upgraded to QQ Computer Housekeeper.
On 29 October 2010, Beijing Qihoo Technology Co., Ltd. (hereinafter referred to as “Qihoo
Company”) and Qizhi Software (Beijing) Co., Ltd. issued the software “Koukou Bodyguard”.
On 3 November 2010, Tencent Company released a “Letter to QQ Users” and stopped
its services of QQ software on computers installed with 360 software (Qihoo Company’s
product).
On 4 November 2010, Qihoo Company announced the recall of its software Koukou
Bodyguard. On the same day, Qihoo, through its 360 Security Centre, announced that upon
the strong intervention of the relevant state departments, full compatibility between QQ
software and 360 software has been realized.
On 15 November 2011, Qihoo Company filed a lawsuit with the Higher People’s Court of
Guangdong Province accusing Tencent Company of abusing its dominant positions in
instant messenger software and service-related markets. Qihoo Company alleged that
Tencent Company and Shenzhen Tencent Computer System Co., Ltd. (hereinafter referred to
as “Tencent Computer Company”) had dominant positions in the relevant markets of instant
messenger software and services. And the two companies explicitly prohibited their users
from using Qihoo’s 360 software, threatening them to stop QQ software services. They
refused to provide relevant software services to users who had installed 360 software, in
order to force users to delete 360 software; and took technical measures to prevent users
who have installed 360 browsers from accessing the QQ space (Qzone). The aforesaid acts
constituted a restriction on transactions.
Qihoo Company also claimed that Tencent Company and Tencent Computer Company
bundled QQ Software Manager with its instant messenger software and installed QQ Doctor
in the name of upgrading QQ Software Manager, which constituted tie-in sale.
Qihoo Company requested the Higher People’s Court of Guangdong Province to order
that Tencent Company and Tencent Computer Company should immediately cease the
14 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
anti-competitive behaviour of abusing their dominant market positions and jointly and
severally pay Qihoo Company RMB 150 million (US$ 0.2422 million) for its economic loss.
Brief summary of judgment
On 20 March, 2013, the Higher People’s Court of Guangdong Province made a judgment
holding that the claims of Qihoo Company should be dismissed. Qihoo Company appealed
to the Supreme Court.
The Supreme Court modified the definition of the relevant market in the first-instance
judgment, finding that the relevant market should be defined as the instant messaging
service market in mainland China, including both PC-based instant messaging services and
mobile-based instant messaging services; both integrated instant messaging services and
non-integrated instant messaging services e.g. text, audio and video.
However, the Supreme Court, holding that Qihoo Company failed to prove the dominant
position and anti-competitive behaviours of Tencent, issued its final judgment on 8 October
2014 and dismissed Qihoo Company’s appeal.
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 15ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Country: China
Case Name and Number: Lou Binglin v. Beijing Aquatic Product Wholesale Industry Association
Monopoly Dispute Case. Case No.:(2013) Beijing Civil Final No.4325
http://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=
9890951a671d49f38546dab854cb9b20
Date of judgment: 9 April 2014
Economic activity (NACE Code): G.46.38 — Wholesale of other food, including fish, crustaceans
and molluscs
Court: The High People’s Court of Beijing Was pass on raised (yes/no)? N/A
Claimants: Lou Binglin (If in EU) Was the EU Damages Directive
referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Beijing Aquatic Product Were damages awarded (if so, how much
Wholesale Industry Association. and to whom)? If not, why not (e.g. lack
of standing, causal link)? Was there
another outcome or remedy? No. The
claimant failed to prove the existence of
the causal link between the defendant’s
anti-competitive behaviours and his losses.
No.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 772,512 (US$ 0.1258 million)
current status/outcome: Yes. Beijing High
People’s Court heard the appeal of the
case and issued the final judgment on 9
April 2014. The Court upheld the judgment
of the first-instance and dismissed the
Defendant’s appeal.
Key Legal issues: Is the dispute likely to be settled
privately? No
• Eligibility of both parties
• Whether the Behaviour of the
Association should be deemed as
organization of monopoly agreement
to fix or change the price of scallop
among competitive operators
16 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
• Whether the provisions on the
“Rewards and Penalties” had
constituted a monopoly agreement
Direct or indirect claims? Direct Method of calculation of damages: N/A
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yang (Sabrina)
WANG, Senior Counsel, Commerce
& Finance Law Offices, wangyang@
tongshang.com
Follow-on (EC or NCA?) or stand-alone?
Stand-alone.
Brief summary of facts
Beijing Aquatic Wholesale Industry Association (hereinafter referred to as the “Association”)
put certain “Rewards and Penalties Provisions” in its “Association Manual”, which read,
“Members are prohibited to sell whole scallops to non-members in the market where
members of the association are located “, “Members are prohibited from unfair competition
or selling scallops without discount and not in accordance with sales price discount sales
of the association “. At the same time, the above regulations were implemented within the
association, and several studies on the adjustment of scallop price on Zhangzidao Company
(the supplier of scallop products) were made and determined. Lou Binglin was unable to
obtain the supply of Zhangzidao scallops after withdrawing from the association.
Brief summary of judgment
On 18 September 2013, Beijing Intermediate People’s Court ruled against the defendant.
On 9 April 2014, High People’s Court of Beijing dismissed the appeal from of the defendant
and upheld the original judgment of the first instance, which can be summarized as follows:
b Confirming that Articles 1 and 2 of the “Promotions and Penalties Provisions” in the
“Beijing Aquatic Wholesale Industry Association Manual” involved in the case are
invalid;
b As of the effective date of the judgment, the Aquatic Products Wholesale Association
has ceased to organize members to reach a monopoly agreement involving changes
in the case and fixing the price of Zhangzidao scallops;
b Dismissing other claims of the claimant Lou Binglin.
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 17ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
The reasonings of the High People’s Court of Beijing are as follows:
The Association is a social organization legal person, which independently conduct
business, and falls within the definition of undertakings of the Antimonopoly Law.
After the Aquatic Products Wholesale Association was registered and established on 29
September 2011, the Aquatic Products Wholesale Association it organized several meetings
to discuss and make corresponding decisions on (i) the sale prices of different types of
scallop products, (ii) the prohibition of sales at discounted prices and (iii) the corresponding
penalties. The intention was to reduce or even eliminate competition among members by
fixing prices, and to increase sales profits as well as the sales rebates offered by Zhangzidao
Company the supplier of the scallop products, which itself will weaken or eliminate market
competition to a certain extent, resulting in exclusion or restriction of competition. The
effect will would ultimately harm the interests of consumers.
Regarding the Article 2 of “Promotions and Penalties Provisions”, members are were
prohibited from selling entire scallops to non-members in the markets where members
of the Association are located. If scallops’ sales had been allowed to be made externally,
this would have inevitably caused price competition between non-members or between
members and non-members, resulting in undermining the purpose of the price agreement
between members being useless. Thus, the aforementioned provisions clearly had the effect
of excluding and restricting competition.
Regarding Lou Binglin’s claim for compensation for losses, regarding scallops in addition to
purchase scallops from the supplier Zhangzidao company through the Aquatic Wholesale
Association, Luo can also purchase scallops through other channels such as Zhangzidao
company’s direct store in Beijing. In terms of other sea products available to Luo, even if
Lou Binglin cannot sell Zhangzidao scallops, he may sell other shellfish products. In terms of
the purchase channels of the shellfish products, Luo can also purchase products from other
provinces such as Shandong, Liaoning and etc. Therefore, Lou Binglin’s loss of expected
profits based on the sale of scallops in Zhangzidao was not directly related to the monopoly
behaviour of the Association.
18 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Huawei Technologies Co., Ltd. vs. InterDigital Technology Corporation;
InterDigital Communications, Inc.; and InterDigital, Inc. Dispute over Abuse of Market
Dominance. Case No.: (2013) Yuegaofa Minsan Zhongzi No.306
Date of judgment: 21 October 2013
Economic activity (NACE Code): J.62.0 — Computer programming, consultancy and related
activities
Court: Guangdong High People’s Court Was pass on raised (yes/no)? N/A
Claimants: Huawei Technologies Co., Ltd. (If in EU) Was the EU Damages Directive
(“Huawei”) referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: InterDigital Technology Were damages awarded (if so, how
Corporation; InterDigital Communications, much and to whom)? If not, why not
Inc.; and InterDigital, Inc. (“IDC”) (e.g. lack of standing, causal link)? Was
there another outcome or remedy? Yes.
Huawei was awarded damages of RMB
20,000,000 (US$ 3 million)
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 20,000,000 (US$ 3 million)
current status/outcome: No.
Key Legal issues: Is the dispute likely to be settled
privately? No
• Whether the court of first instance had
violated legal procedures during the
trial
• How to identify the relevant market for
this case
• Whether IDC abused its market
dominance
• Whether the damages awarded by the
court of first instance are reasonable
Direct or indirect claims? Direct Method of calculation of damages: The
court considered the reasonable expenses
paid by Huawei, including attorney’s
fees in China and America, notarial fees,
competing interest losses, together with
other factors, such as the nature of IDC’s
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 19ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
infringement, the severity of its subjective
fault, and the damage it caused Huawei.
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Zhan Hao Managing
Partner, Anjie Law Firm, zhanhao@
anjielaw.com
Follow-on (EC or NCA?) or stand-alone?
Stand-alone
Brief summary of facts
Huawei is a major global supplier of telecommunication equipment. Both InterDigital
Communications, Inc. and InterDigital, Inc. are the wholly-owned subsidiaries of InterDigital
Technology Corporation (IDC).
IDC holds a large number of standard essential patents (“2G, 3G and 4G SEPs”) in the
US and China. Huawei had negotiated with IDC for several years. Suddenly, IDC initiated
litigation against Huawei by bringing private actions against it in the United States.
In response to the IDC’s actions, Huawei filed a lawsuit with the Shenzhen Intermediate
People’s Court on 6 December 2011 against IDC, in which Huawei claimed that IDC had
abused its dominant position in the relevant market by: (i) setting unfairly high royalties for
its patent licenses disregarding its commitment to the principle of fair, reasonable and non-
discriminatory fees (FRAND); (ii) setting discriminatory trading conditions for counterparts
with similar conditions; (iii) attaching unreasonable conditions to its patent-licensing
arrangements; and (iv) arranging tie-in sales. Huawei requested the court to order IDC to
immediately cease abuse of its dominant market position in relation to the SEPs for 3G
technology, and award damages of RMB 20 million (US$ 3 million) to Huawei.
The Shenzhen Intermediate People’s Court ordered the defendant to immediately stop its
monopolistic conduct, namely overpricing and tying sales, and awarded damages of RMB
20 million (US$ 3 million) to the Claimant. However it rejected Huawei’s other claims. Both
parties appealed to the Guangdong High People’s Court. The court of second instance
made a final judgment to reject both parties’ appeals and uphold the original judgment.
Brief summary of judgment
The court ruled (i) that each SEP constitutes an independent relevant market and thus (ii)
that IDC holds a dominant position due to the following reasons:
b IDC owns standard essential patents within the global 3G wireless communication
field (including China and the US) and owns 100% of the market share for licensing
each essential patent under the 3G standard;
20 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
b IDC does not conduct any substantive production activity, and merely relies on patent
licensing as its business operations model; and
b due to IDC’s business operations model, IDC would not depend on, or agree to SEP
cross-licensing with other SEP holders like Huawei. Therefore, in this case, IDC has the
power to force Huawei to adopt terms on pricing, quantities, and other transaction
conditions before licensing Huawai its 3G essential patents. IDC was held liable for
abusing its market position by imposing monopolistic high prices for its SEPs and
tying arrangements.
The final judgment determined that IDC holds dominant market positions in the relevant
markets, and IDC’s behaviours, of applying excessive licensing conditions, as well as
the tying of non-essential patents with SEPs, breached its FRAND commitments and
constituted abuse of market dominance. As for the amount of damage, the court held that
both the Claimant and the defendant failed to provide adequate evidence for “the damages
suffered by the Claimant or the amount of profits gained by the defendant, as a result of the
infringement.” Nevertheless having considered the reasonable expenses, competing interest
losses, and other factors, such as the nature of the defendant’s infringement, the level of
subjective mistakes, and the severity of damage caused to the Claimant, the court awarded
damages of RMB 20 million(US$ 3 million) to Huawei.
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 21ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Country: China
Case Name and Number: Beijing Ruibang Yonghe Technology and Trade Co., Ltd. vs. Johnson &
Johnson (Shanghai) Medical Devices Co, Ltd. & Johnson & Johnson (China) Medical Devices Co,
Ltd., Dispute over Vertical Monopoly Agreement. Case No.: (2012) Hugao Minsan (Zhi) Zhongzi
No.63
Date of judgment: 1 August 2013
Economic activity (NACE Code): C.32.5 — Manufacture of medical and dental instruments and
supplies
Court: Shanghai High People’s Court Was pass on raised (yes/no)? N/A
Claimants: Beijing Ruibang Yonghe (If in EU) Was the EU Damages Directive
Technology and Trade Co., Ltd. referred to/relied upon (and if so, for
(“Ruibang”) procedural or substantive provisions)?
N/A
Defendants: Johnson & Johnson Were damages awarded (if so, how
(Shanghai) Medical Devices Co, Ltd., much and to whom)? If not, why not
and Johnson & Johnson (China) Medical (e.g. lack of standing, causal link)? Was
Devices Co, Ltd. (collectively “J&J”) there another outcome or remedy? Yes.
Ruibang was awarded damages of RMB
530,000 (US$ 83,967)
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 14,399,300 (US$ 2 million)
current status/outcome: Yes. Shanghai
High People’s Court heard the appeal of
the case and issued the final judgment
on 1 August 2013. The Court revoked the
judgment of first instance and ruled that
J&J shall compensate Ruibang for its
economic losses of RMB 530,000 (US$
83,967).
Key Legal issues: Is the dispute likely to be settled
privately? No
• Eligibility of Ruibang as a claimant
• Whether eliminating or restricting
competition is an essential element
in the finding of vertical monopoly
agreement under Article 14 of the Anti-
Monopoly Law (“AML”)
22 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
• Who bears the burden to prove the
agreement in question had the effect of
eliminating or restricting competition
• Whether the agreement in question
constitutes an anti-competitive
agreement
• Whether Ruibang’s claim for damages
should be supported
Direct or indirect claims? Direct Method of calculation of damages:
• The scope of damages supported by
the court is the loss of profit in the
relevant market for surgical sutures in
2008
• The court considered it reasonable
to use Ruibang’s sales target as
the expected sales performance of
Ruibang in 2008 in view of the fact
that Ruibang’s performance exceeded
sales targets by 10% in the past three
years
• The profit margin claimed by Ruibang
was adjusted with reference to the
sales prices and margins of other
brands , so that it reflects the normal
profit margin in the relevant market
rather than the profit margin achieved
through the implementation of the
anti-competitive agreement
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Zhaoqi (Charles)
CEN, Partner, Zhong Lun Law Firm, Beijing
Office, cenzhaoqi@zhonglun.com
Follow-on (EC or NCA?) or stand-alone?
Stand-alone
Brief summary of facts
As a distributor of J&J’s surgical sutures, staplers and other medical devices, Ruibang had
been a business partner of J&J for 15 years. In January 2008, J&J and Ruibang signed
a Distribution Agreement which stipulated that Ruibang shall not sell products at a
price lower than that specified by J&J. In March 2008, Ruibang won a bid to supply J&J
surgical sutures to Peking University People’s Hospital by offering the lowest price among
bidders. In July 2008, J&J cancelled Ruibang’s rights to sell at two other hospitals on the
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 23ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
ground that Ruibang had lowered its prices without permission. J&J no longer accepted
Ruibang’s orders for surgical sutures after 15 August 2008, and completely stopped the
supply of sutures and staplers in September 2008. In 2009, J&J did not agree to renew
the Distribution Agreement with Ruibang. Ruibang filed a lawsuit with Shanghai No.1
Intermediate People’s Court, alleging that the minimum resale price clause stipulated by J&J
in the Distribution Agreement constituted a vertical anti-competitive agreement which was
prohibited by the AML and requesting the court to order J&J to compensate its losses of
RMB 14,399,300 (US$ 2million).
Brief summary of judgment
Shanghai No.1 Intermediate People’s Court dismissed all the claims of Ruibang on the
grounds that Ruibang failed to produce evidence to support its allegations. Ruibang refused
to accept the judgment of first instance and appealed the case to Shanghai High People’s
Court.
During the trial of second instance, the Shanghai High People’s Court held that the relevant
market in this case was the surgical suture market in mainland China; competition in the
market was insufficient and J&J had a strong market power in the market; the agreement
restricting minimum resale price had the effect of eliminating and restricting competition in
the relevant market and there was no obvious and sufficient pro-competitive effects, thus
the agreement in dispute shall be deemed to constitute an anti-competitive agreement.
J&J’s actions of disqualifying Ruibang from selling to some hospitals and ceasing the
supplying of sutures to Ruibang were anti-competitive behaviours prohibited by the AML
and J&J shall compensate Ruibang for the loss of profit of suture products in 2008 as a
result of the aforesaid anti-competitive behaviours. Accordingly, the court decided that J&J
should pay RMB 530,000 (US$ 83,967) to Ruibang in compensation for its economic losses.
24 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Wuxi Baocheng Natural Gas Cylinder Company v. Wuxi China
Resources Vehicle Gas Company. Case No.: (2012) Jiangsu High Court IP Division Final No.0004,
(2011) Wuxi Intermediate Court IP Division First No.0031
Date of judgment: 23 October 2012
Economic activity (NACE Code): G.47.3.0 — Retail sale of automotive fuel in specialised stores
Court: Jiangsu High People’s Court Was pass on raised (yes/no)? N/A
Claimants: Wuxi Baocheng Natural Gas (If in EU) Was the EU Damages Directive
Cylinder Company referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Wuxi China Resources Vehicle Were damages awarded (if so, how much
Gas Company and to whom)? If not, why not (e.g. lack
of standing, causal link)? Was there
another outcome or remedy? No. The
claimant failed to prove the defendant’s
delay in supply would amount to a refusal
to deal.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 18,000 (US$ 2,852)
current status/outcome: Yes, Jiangsu high
court upheld the judgment of lower court
and dismissed the Claimant’s appeal.
Key Legal issues: Is the dispute likely to be settled
privately? N/A
• the qualification of the claimant
• the distinctions between a delay-to-
deal and a refusal-to-deal
• the effect of restriction or elimination
of competition resulting from a refusal
to deal
Direct or indirect claims? Indirect Method of calculation of damages: N/A
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yi Jin, Partner, King
& Capital Law Firm, jinyi@king-capital.com
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 25ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Follow-on (EC or NCA?) or stand-alone?
Stand-alone
Brief summary of facts
The claimant, Wuxi Baocheng Gas Cylinder Inspection (“Baocheng”), engaging in
compressed natural gas (CNG )inspecting and installing, claimed that the defendants, Wuxi
China Resources Vehicle Gas Company (“China Resources Gas”) had abused its market
dominance by refusing to supply natural gas to vehicles registered by the claimant, i.e.
the claimant alleged that the defendant refused to issue gas refilling cards to two cars of
Baocheng, and claimed therefore a damage of RMB 18,000 (US$ 2,852).
Brief summary of judgment
The first-instance court believed that China Resources Gas enjoyed market dominance in
Wuxi’s auto gas refilling service market, as it was the city’s only auto gas refilling service
provider.
However, the court dismissed Baocheng’s abuse claim, considering that a temporary delay
in providing service should not be treated as a refusal to supply.
Baocheng appealed the ruling before Jiangsu High Court.
The Jiangsu High Court confirmed that judgment and concluded that China Resources
Gas had not abused its dominant position. The reasonings were pursuant to the following
reasoning:
b China Resources Gas’ behavior amounted to a delayed transaction but not a refusal to
supply, because it had eventually issued gas-refilling cards to the two vehicles of the
claimant on 4 January 2011.
b The defendant’s behaviour had not resulted in an elimination nor restriction on
competition.
b The claimant failed to prove that the defendant intentionally refused to deal.
The Jiangsu High Court confirmed that concluded that, if the delayed transaction in this
case was considered to be a refusal to deal, this would mean that any dominant enterprise
that fails to deliver goods or provide services in a timely manner will bear civil liability under
the Anti-Monopoly Law. The court further considered that such an approach would result in
imposing excessive burden and legal liabilities upon dominant companies.
The judgment was affirmed.
26 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: LIU Dahua v. Dongfeng-Nissan Motor Co., Ltd., and Hunan Huayuan
Industry Co., Ltd. Case No.: (2012) Xiang High Court Civil Division III Final No.
Date of judgment: 22 June 2012
Economic activity: G.45 — Wholesale and retail trade and repair of motor vehicles and
motorcycles
Court: Hunan High People’s Court Was pass on raised (yes/no)? N/A
Claimants: Liu Dahua (If in EU) Was the EU Damages Directive
referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Dongfeng-Nissan Motor Co., Were damages awarded (if so, how much
Ltd. and Hunan Huayuan Industry Co., Ltd. and to whom)? If not, why not (e.g. lack
of standing, causal link)? Was there
another outcome or remedy? No. The
claimant failed to prove the defendant’s
dominant position in the relevant market,
the argument is dismissed due to lack
of standing, as well as the failure in
establishing the causal link.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 260 (US$ 41)
current status/outcome: Yes. The Hunan
High People’s Court issued the final
judgment which upheld the judgment
of the first-instance and dismissed the
Claimant’s appeal.
Key Legal issues: Is the dispute likely to be settled
privately? N/A
• Definition of relevant market
• Dominant positions in relevant markets
• Abuse of dominant position
Direct or indirect claims? Direct Method of calculation of damages: N/A
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Yi Jin, Partner, King
& Capital Law Firm, jinyi@king-capital.com
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 27ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Follow-on (EC or NCA?) or stand-alone?
Stand-alone
Brief summary of facts
The Claimant is the owner of a Dongfeng-Nissan Teana. Liu had his car’s left front door lock
cylinder replaced by Dongfeng-Nissan ‘s 4S shop, Hunan Huayuan Industry Co., Ltd. (“Nissan
4S shop”), The Nissan 4S shop charged Liu RMB 307 (US$ 48) for the part replacement,
and RMB 300 for car maintenance. Soon after that, the Claimant found out that two
independent repairers charged much lower prices for similar quality of spare parts as well
as vehicle maintenance compared with the Nissan 4S shop. In addition, LIU also found
that Dongfeng-Nissan’s policy prohibited its distributors from merely selling the parts to
customers (without provision of the relevant services). So, he brought the suit alleging that
Dongfeng-Nissan along with its 4s shop abused its dominant position by charging excessive
prices on original parts and the maintenance, as well as adopting an anti-competitive policy,
abused its dominant position.
The court of first instance dismissed the Claimant’s claim. The Claimant subsequently
appealed before the Hunan High People’s Court of appeal, which upheld the judgment of
the lower court.
Brief summary of judgment
The Hunan High People’s Court concluded that due to the defendant’s failure in defining
proper relevant markets, and by conducting the analysis on the demand-side substitution,
in particular, the court has considered the function, features, as well as the usage of the
replacements, therefore the court held that, both the original spare parts (parts that
produced by Dongfeng-Nissan or other licensed producers) and the aftermarket auto parts
(parts that produced and sold by other companies) should be considered in a broader
market definition. Also, due to the defendant’s failure in proving the market dominance
held by the defendant, the Hunan High People’s Court of appeal upheld the lower court’s
verdict. As far as the franchise policy is concerned, the court of appeal concluded it was not
necessarily anti-competitive.
28 INTERNATIONAL CHAMBER OF COMMERCE (ICC)CHINA
Country: China
Case Name and Number: Tangshan Renren Information Service Co., Ltd. vs. Beijing Baidu
Netcom Science and Technology Co., Ltd., Dispute over Abuse of Market Dominance. Case No.:
(2010) Gaomin Zhongzi No.489
Date of judgment: 9 July 2010
Economic activity (NACE Code): J.63.12 — Web portals
Court: Beijing High People’s Court Was pass on raised (yes/no)? N/A
Claimants: Tangshan Renren Information (If in EU) Was the EU Damages Directive
Service Co., Ltd. (“Tangshan Renren”) referred to/relied upon (and if so, for
procedural or substantive provisions)?
N/A
Defendants: Beijing Baidu Netcom Science Were damages awarded (if so, how
and Technology Co., Ltd. (“Baidu”) much and to whom)? If not, why not
(e.g. lack of standing, causal link)? Was
there another outcome or remedy? No.
Tangshan Renren failed to prove that
Baidu held a dominant market position.
No.
Is/was the case subject to appeal (yes/ Amount of damages initially requested:
pending/no)? If yes, briefly describe RMB 1,106,000 (US$ 0.1634 million)
current status/outcome: Yes. Beijing High
People’s Court upheld the judgment of
Beijing No.1 Intermediate People’s Court.
Key Legal issues: Is the dispute likely to be settled
privately? No
• Whether the court of first instance has
violated legal procedures during the
trial
• Whether Baidu’s behaviour is an abuse
of market dominance and whether
it should bear corresponding legal
liabilities
Direct or indirect claims? Direct Method of calculation of damages: N/A
Individual or collective claims? Individual Name and contact details of lawyer who
has drafted summary: Zhaoqi (Charles)
CEN, Partner, Zhong Lun Law Firm, Beijing
Office, cenzhaoqi@zhonglun.com
INTERNATIONAL CHAMBER OF COMMERCE (ICC) 29ICC COMPENDIUM OF ANTITRUST DAMAGES ACTIONS
Follow-on (EC or NCA?) or stand-alone?
Stand-alone
Brief summary of facts
Baidu is a leading online search engine provider in China. In addition to providing free
search services to users, Baidu also provides paid listing services to website owners,
wherbey the more a website owner pays, the higher the website’s ranking would be in
relevant search results.
Tangshan Renren was the owner of a medical information website, www.qmyyw.com.
Tangshan Renren believed that Baidu had blocked its website because it reduced its
investment in Baidu’s paid listing service, and the blocking had led to a significant reduction
in the number of visits to its website.
Tangshan Renren filed a case with the Beijing No.1 Intermediate People’s Court, alleging
that Baidu had abused its dominant position by blocking Tangshan Renren’s website and
thus forcing Tangshan Renren to subscribe to Baidu’s paid listing services. Tangshan Renren
sought damages of RMB 1,106,000 (US$ 0.1634 million) and an order that Baidu unblock its
website.
Brief summary of judgment
The court defined the relevant service market as a search engine service market and
rejected Baidu’s claim that the search engine service could not be a relevant market under
the Anti-Monopoly Law because it was delivered “free of any charge” to users. However, the
court noticed that, search engine services were also provided to website owners who would
pay to achieve a better ranking in search results. The court defined the relevant geographic
market as China-wide, considering that the majority of users who used Chinese search
engines were located in China, and search engine services which Chinese users could select
and access were also generally provided within China.
The court held that the evidence provided by Tangshan Renren was insufficient to sustain
the claim that Baidu held a dominant market position. Tangshan Renren also failed to prove
its allegation that Baidu blocked its website because it reduced its investment in paid
listing; on the contrary, there was a legitimate justification for Baidu to block Tangshan
Renren’s website because Tangshan Renren had created “junk links”. “Junk links” are
artificially created links which have nothing to do with the keywords typed into a search
engine but which fool the search engine’s algorithm into improving a website’s ranking for
said keywords. To protect the interests of search engine users, Baidu adopted a rule in its
policies to block websites which rely on “junk links”. According to Baidu’s policy, when “junk
links” are identified by the anti-cheating mechanism of Baidu, the infringing website will
automatically be punished by Baidu.
Thus, the court of first instance dismissed all the claims of Tangshan Renren. This judgment
was upheld on appeal.
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