The anti-monopoly authorities of China have been taking a strong stand against monopolistic activities this year. The National Development and Reform Commission ("NDRC"), one of the "three pillars" of China's anti-monopoly enforcement agencies, has imposed total penalties exceeding RMB 1,482 million based on a number of investigations of big companies in different industries. Notably, the NDRC announced on August 25 that it has closed its case involving violations of Article 14 of the Anti-Monopoly Law by multiple infant milk firms. Six firms – including Biostime, Mead Johnson Nutrition Co., Dumex, Abbott Laboratories, FrieslandCampina Trading (Shanghai) Co., Ltd. (Friso), and Fonterra – have paid penalties as a result of the action. State-owned telecommunication giants are also under stress, as an investigation launched by the NDRC against China Telecom and China Unicom in 2011 remains ongoing. The gigantic telecommunication companies may feel compelled to reduce rates in order to avoid penalties.
Reuters reports that the China Association for Medical Devices Industry ("CAMDI") is collecting information from its members in response to a questionnaire issued by the Anti-Monopoly Bureau of the Chinese Ministry of Commerce (“MOFCOM”). The questionnaire reportedly asks about "the value of imported goods, the price at which companies sold to distributors and whether they planned to raise or lower prices," as well as about production ability, sales, workforce, and production costs. The CAMDI, according to its official website, is an association of medical device makers that has more than 4,000 members countrywide. The reported scope of this questionnaire strongly suggests that it will lead to further inquiries of the CAMDI and other industry groups.
Mr. Xu Kunlin, head of the Price Supervision and Inspection &Anti-Monopoly Bureau of the NDRC, recently stated on television that industries like petroleum, telecommunication, automobile, and bank are "all on the radar" of the Bureau. The remarks of Mr. Xu Kunlin suggest that the NDRC is also actively considering enforcement actions in industries traditionally controlled by state-owned companies. The remarks could also be interpreted as an effort to deflect recent criticisms by the United States Chamber of Commerce and Federal Trade Commission, reported by the Financial Times, that China’s anti-monopoly authorities have been targeting foreign investments in a discriminatory manner.
Blake Yang, Martin Hu and Partners