Review № 14 of Chinese Antitrust News from the Experts of the BRICS Competition Centre
- China hosts China-Latin America Internet Development and Cooperation Forum
- China fines four pharmaceutical companies a total of $49 million for collusion during pandemic
- Chinese electronics maker Dongshan Precision buys French auto parts supplier GMD for €100 million
- China steps up fight against "irrational" competition (neijuan) as part of creation of single national market
- Chinese e-commerce platform Taobao expands presence in overseas markets
- China launches campaign to protect businesses from online slander
- Chinese platforms upgrade recommendation algorithms at regulator's request
- SAMR holds meeting on antitrust compliance in housing and utilities sector
- Chinese BYD surpasses Tesla in electric car sales in Europe for the first time
- SAMR begins inspection of world's largest music labels
China hosts China-Latin America Internet Development and Cooperation Forum
This month, the China-Latin America and the Caribbean Ministerial Forum on Internet Development and Cooperation was held in Xi'an, organized by the Cyberspace Administration of China and the Shaanxi Provincial Government.
The event featured discussions on the digital economy, cybersecurity, and artificial intelligence. Zhuang Rongwen, head of the Cyberspace Administration of China, proposed deepening China-Latin America cooperation in four areas: developing the digital economy, ensuring cybersecurity, developing artificial intelligence, and maintaining order in cyberspace.
The forum was attended by about 400 representatives from government agencies, businesses, and academia from China and Latin America and the Caribbean.
Source: Weixin
China fines four pharmaceutical companies a total of $49 million for collusion during pandemic
Chinese antitrust authorities have imposed record fines on four pharmaceutical companies for colluding to artificially inflate prices for raw materials used to produce a vital COVID-19 drug. The fines totaled $49 million.
The Tianjin City Market Regulatory Commission found that Zhejiang Xianju Pharmaceutical, Tianjin Pharmaceutical, Jiangsu Lianhuan Pharmaceutical and Xi'an Guokang Ruijin Pharmaceutical coordinated price increases for dexamethasone sodium phosphate, a key ingredient in drugs used to treat severe cases of the coronavirus, starting in November 2021. The companies were fined $27 million, $10 million, $8 million and $4 million, respectively.
The scheme was masterminded by businessman Guo Xiangguo, who separately contacted the four pharmaceutical companies to agree on a plan to consistently raise prices to avoid an antitrust investigation. As a result, the cost of raw materials increased from $1,000-$1,250 to $1,400-$5,300 per kilogram. At the same time, the participants in the conspiracy limited supplies, creating an artificial deficit.
Particular attention was drawn to Tianjin Pharmaceutical, which violated antitrust laws for the fourth time - its total fines in recent years exceeded $23 million.
In addition to the companies, three managers were also fined $83,000 each, and the organizer Guo Xiangguo was fined $695,000.
This is the first time that China's antitrust authorities have held individuals accountable for concluding monopolistic agreements, which marked the official entry of antitrust authorities into the era of the "double fine system."
Source: Weixin
Chinese electronics maker Dongshan Precision buys French auto parts supplier GMD for €100 million
Chinese electronic components maker Dongshan Precision has reached a €100 million deal to acquire French company Groupe Mécanique Découpage (GMD), one of Europe’s leading auto parts suppliers.
According to the company, Dongshan Precision will discount the price and provide GMD with a shareholder loan to repay debts to three main creditors. GMD’s total debt is estimated at €363 million and includes syndicated loans, corporate loans and bonds.
GMD owns 46 factories in 12 countries in Europe, Asia and Africa, where it employs more than 6.6 thousand people. In 2024, the company’s revenue was €1 billion, but its net profit was only €3 million.
According to the latest annual report, Dongshan Precision’s revenue for 2024 was 36.8 billion yuan. The company’s clients include global manufacturers of electric vehicles and telecommunications equipment. The company plans to use GMD's assets and customer network to expand its presence in the global automotive market.
Source: Yicai Global
China steps up fight against "irrational" competition (neijuan) as part of creation of single national market
Tackling “irrational” competition (neijuan) has become a key task in China’s bid to build a unified national market, the People’s Daily reported, citing key statements by Xi Jinping and decisions made at the Central Economic Work Conference.
The term neijuan, or irrational competition, refers to a cycle of excessive domestic competition in which companies are forced to invest ever more resources without receiving commensurate returns in the form of profits or technological breakthroughs.
The concept has become a catchall term for chronic overcapacity and brutal price wars affecting a wide range of industries in China, including electric vehicles and solar energy.
The priorities outlined by the Chinese government include strengthening antitrust enforcement, combating counterfeiting, false advertising and copyright infringement, supporting enterprises in their transition to high-quality development and innovation, as well as developing industry self-regulation mechanisms and implementing fair competition standards. In addition, emphasis is placed on revising the Pricing Law, the Anti-Unfair Competition Law and the E-Commerce Law.
Source: SAMR
Chinese e-commerce platform Taobao expands presence in overseas markets
Alibaba Group's Chinese e-commerce platform Taobao has announced that it will expand its free international shipping service to 12 countries and regions. The new destinations include Singapore, Malaysia, South Korea, Australia, Japan, Thailand, Cambodia, Kazakhstan and Mongolia.
During the shopping festival on June 18, shoppers in these countries will be able to purchase products at deep discounts and enjoy convenient returns through nearby collection points.
The company said it will accelerate its overseas expansion this year and support sellers in exploring the international market.
Source: China Daily
China launches campaign to protect businesses from online slander
China has launched a two-month campaign to improve the online business environment, aimed at combating online slander against companies and entrepreneurs.
The campaign will focus on four key issues: malicious slander and attacks on companies, blackmail of businesses, manipulative marketing, and privacy violations.
Particular attention will be paid to combating false and inaccurate product ratings, leaks of entrepreneurs' private information, and the illegal use of their names on social media. Platforms should better moderate content, especially in trending and hot topics sections, and simplify the process for businesses to file complaints.
Source: Weixin
Chinese platforms upgrade recommendation algorithms at regulator's request
The Cyberspace Administration of China (CAC) is continuing its campaign to clean up the internet, focusing on content recommendation algorithms on popular platforms including Douyin (the Chinese version of TikTok), Xiaohongshu, Weibo, Kuaishou, WeChat and Bilibili.
As part of the initiative, authorities have focused on user concerns such as the promotion of low-quality content, “information bubbles” and polarization of opinions. Key platforms have already implemented a series of changes, focusing on four key areas of development: promoting positive content, giving users more control over recommendations, emphasizing content diversity, and increasing algorithm transparency.
Source: САС
SAMR holds meeting on antitrust compliance in housing and utilities sector
The State Administration of Market Regulation (SAMR) of China held a meeting on antitrust compliance in the housing and utilities sector.
The meeting noted that the number of cases of monopolistic behavior in the housing and utilities sector is growing, which harms the legitimate rights and interests of consumers and other market participants. SAMR called on housing and utilities operators to strictly comply with antitrust laws and maintain fair competition.
Source: SAMR
Chinese BYD surpasses Tesla in electric car sales in Europe for the first time
In April, Chinese automaker BYD surpassed Tesla in the number of electric cars sold in Europe for the first time. According to the data, BYD registered sales of 7,231 electric cars, which is 169% more than a year earlier. Tesla's sales, on the contrary, fell by 49% to 7,165, and the company fell to 11th place in the ranking.
Analysts call this a turning point for the European car market, where Tesla has long dominated. Despite the overall growth of electric car sales in Europe by 28%, the American brand continues to lose ground. Volkswagen, the leader in the segment, increased sales by 61%, and Skoda - more than tripled.
If you also take into account plug-in hybrid electric cars, BYD's gap with Tesla becomes even greater: the Chinese company's overall sales increased by 359% year-on-year. Previously, BYD and other Chinese automakers were betting on fully electric models, but after the EU introduced higher tariffs on electric cars from China, the company began to actively promote hybrids.
Source: Bloomberg
SAMR begins inspection of world's largest music labels
China's State Administration for Market Regulation (SAMR) has launched an investigation into three of the world's leading music companies — Universal Music Group, Sony Music Entertainment, and Warner Music Group. The reason for this is suspicions of abusing their dominant position in the Chinese market.
In recent months, the regulator has been collecting information on the licensing agreements, ownership structures, and business models of these companies. Particular attention is paid to examining the terms of work with Chinese streaming platforms, including possible inflated license fees and the imposition of unfair terms of the deal.
According to Billboard magazine, the three companies' combined market share in China is about 77%, which exceeds the legal threshold of 75% for recognizing a dominant position in the market.
If violations are confirmed, the companies may be fined up to 10% of their annual turnover, and their illegally obtained profits may be confiscated.
This is not the first antitrust investigation of these companies in China. In 2019, they already came under scrutiny from regulators due to the possible conclusion of vertical anti-competitive agreements with Tencent Music Entertainment. Representatives of Sony Music declined to comment, and Universal Music and Warner Music did not respond to journalists' requests. A decision on whether to launch an official investigation is expected soon.
Source: Weixin
