Consideration of Economic Evidence by Chinese Courts in Antitrust Litigation

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Yan Luo, Fang Qi, Marshall Yan, Feb 11, 2014

The Anti-Monopoly Law provides civil remedies to plaintiffs who have suffered damages “caused” by defendants’ monopolistic conduct. To grant remedies in an AML case, Chinese courts demand evidence showing that the defendant has engaged in monopolistic conduct, and that the “anti-monopoly injury” to the plaintiff is “causally linked” to the defendant’s monopolistic conduct. As the determination of these issues is based on antitrust economics, economic evidence plays a fundamental role in AML litigation.

This article examines the approaches that Chinese courts have taken to evaluate economic evidence in AML cases by examining the courts’ rulings in two recent AML cases: Rainbow v. Johnson & Johnson and Qihoo v. Tencent. Although the approaches are likely to continue evolving as the Supreme People’s Court has yet to issue any official guidelines for evaluating economic evidence, and lower courts in different provinces are still developing their approaches, a thorough analysis of the courts’ approaches in the two cases can shed some lights on what parties will likely encounter in AML litigation.

The rest of the article is organized as follows. Part II discusses the general role of economic evidence as laid out in the AML. Part III discusses how the courts have considered economic evidence in connection with the determination of “relevant market” and “market position.” Part IV focuses on the Johnson & Johnson court’s analysis of competitive effects of resale price maintenance. Part V discusses how the courts have evaluated the relationship between the plaintiff’s injury and the defendant’s wrongdoing in order to determine whether the plaintiff is a proper party to bring an AML action and how to grant AML damages. Part VI concludes.