Two recent cases relating to the abuse of a dominant position provides insight into the workings of the new AML in judicial proceedings in China.

On 23 October 2009, the Shanghai No. 1 Intermediate Court issued its ruling in the “Shanda-Sursen” case. This represents the first antitrust case that has reached a court verdict since the entry into force of the AML in August 2008. The case involved an action filed by Beijing Sursen Electronic Co. (“Sursen”) against Shanda Network Development Co. (“Shanda”) and Shanghai Xuanting Entertainment Information and Technology Co. (“Xuanting”) relating to the alleged abuse of a dominant position on the on-line literature market. The abuse concerned the sequel to a popular novel which had been commissioned by Sursen. Sursen submitted that Shanda and Xuanting, who had published the original novel on their website, had abused their dominant position on the market by coercing the writer to stop working on the sequel and apologise on their website.

The Court dismissed the claims, and confirmed that Shanda and Xuanting were legitimate in their conduct. Notably, it found that Sursen had not produced sufficient evidence to show that Shanda and Xuanting were dominant on the on-line literature market. Although Shanda’s website and third party websites claimed it had over 80% of the market, the court found that it did not satisfy the market share threshold of 50% beyond which dominance will be presumed under the AML.

On 23 October 2009, a case filed against China Mobile by one of its customers was settled privately, following the agreement that China Mobile would pay the customer RMB 1000. Prior to its withdrawal, the Beijing Intermediate People’s Court had accepted to hear the claim on abuse of dominant position in the Chinese cellular telephone market. This claim had been transferred from the Dongcheng District Court, indicating that the intermediate level courts will have primary jurisdiction over civil litigation under the AML.