Abuse of dominance: new developments in the Tetra Pak decision

CPI Asia Column edited by Vanessa Yanhua Zhang (Global Economics Group) present:

Abuse of Dominance: New Developments in the Tetra Pak Decision –By Susan Xuanfeng Ning & Kate Heyue Peng, King Wood Mallesons (Beijing)

On 16 November 2016, the State Administration for Industry and Commerce of the People’s Republic of China (“SAIC”) published its administrative penalty decision to fine Tetra Pak (“TP”) for abuse of dominant market position. The SAIC imposed a fine totaling RMB 667.7 million bringing an end to a case that started in January 2012 and lasted for almost five years.

The SAIC found that from 2009 to 2013, TP abused its dominant position in aseptic carton packaging machinery for liquid food products (“machinery market”), technical services for aseptic carton packaging machinery for liquid food products (“technical service market”), and cartons for liquid food product aseptic packaging (“carton market”). The SAIC found that in Mainland China TP had without justifiable reasons conducted tie-in sales, exclusive dealing and loyalty discounts.

In this case the SAIC for the first time defined a “loyalty discount” as an “other forms of abuse of dominant market position confirmed as such by the Anti-Monopoly Enforcement Authority under the State Council” regulated under Article 17(1) (vii) of the Anti-Monopoly Law (the “AML”). By doing so, the theory of loyalty discounting (already widely acknowledged in the EU and the US) has bee