You Better Watch Out, You Better Not Cry: China’s Emerging Approach to Abuse of Dominance

Since the introduction of the Anti-Monopoly Law (“AML”) in 2008 outside observers and investors in China have been carefully studying its provisions and monitoring cases considered by the regulators and courts. To date, it has been the merger control provisions that have attracted the most attention, with a significant number of cases (140 to date) reviewed by China’s Ministry of Commerce (“MOFCOM”) and several highly publicized instances of conditional approval of global transactions as well as the decision to block Coca-Cola’s proposed acquisition of Huiyuan Juice. By comparison, regulators have been slow to take action in relation to the abuse of dominance provisions under the AML, with no formal investigations having yet taken place and delays in settling the draft implementation rules. However, the regulatory void has been filled, to some degree, by the decisions made by the Chinese courts in a number of high profile dominance cases. In this article we review the legislative progress to date, the enforcement structure, and select abuse of dominance cases. We conclude with a number of recommendations for firms operating or considering investing in China and some predictions about likely future developments in this area.