written by Xie Guanbin

Lifang lawyers have successfully defended client China Unicom (formerly known as China Netcom) in China’s first anti-monopoly case. China Netcom was accused of abusing its dominant market position in a case heard at Beijing No.2 Intermediate People’s Court.

The plaintiff, (Li) argued that China Netcom’s Beijing branch had given him only one choice (pre-payment) when he purchased fixed telephone services, applying discriminatory treatments to trading parties with equal standing and thus abusing its dominant market position. The trial court rejected Li’s requests, and Li appealed to the Beijing High People’s Court. The High Court, however, held up the first-instance court decision.

This case has attracted wide attention as the first major judicial anti-monopoly case in China. It has been instrumental in establishing principles concerning rules of evidence and market definition in anti-monopoly litigation.

These are as follows:
1. The principle of allocating the burden of proof in anti-monopoly litigation has for the first time been specified by a court decision. The Beijing High People’s Court held that in civil actions involving the abuse of market dominance, the plaintiff was responsible for providing evidence concerning the definition of the relevant market. The plaintiff must show that the defendant held a dominant position in that market, that it had abused that dominance and that such abuse had caused actual losses to the plaintiff.

2. The judicial procedure made a direct determination on the issue of what is the relevant market. In the final judgment the High Court supported the trial court’s original decision that fixed telephone, Little Smart (xiaolingtong) phone and mobile phones were closely substitutable, as were ADSL and wireless access to the internet. Previously, such a determination was generally made by the competition authority in merger assessment. Lifang’s success in this case came about from the extensive knowledge lawyers gained from their involvement in many anti-monopoly matters since 2007, and from their practice in intellectual property litigation over the years.

Guanbin Xie, managing partner
Email: guanbinxie@lifanglaw.com
Tel: 86-10-64096099
Fax: 86-10-64096260 64096261
Website: www.lifanglaw.com