Top court focuses on monopolies
Updated: 2012-05-09 07:35
By Zhao Yinan and Li Jiabao (China Daily)
Companies now have to prove they are not abusing market status
The top court has reduced the burden of proof for a plaintiff in a civil lawsuit to prove that an industry giant has a monopoly or dominant market position.
Companies and public utilities now have to prove that they did not abuse their market dominance, a move legal experts welcomed as ensuring competition and protecting consumer rights.
The move is also likely to see the country conduct stricter investigations into international mergers and acquisitions, experts said.
A judicial interpretation of the Antitrust Law, issued by the Supreme People's Court on Tuesday, has reduced the plaintiff's burden to prove whether an industry giant, such as electricity and gas suppliers, has a dominant market position in civil disputes. It takes effect in June.
On alleged monopoly agreements, defendants will now have to prove that they did not restrict competition or exclude competitors, the interpretation said.
The redistribution of the burden of proof tackles a long-existing difficulty in obtaining evidence for those who said that their legitimate rights had been breached through monopolies or major companies.
Between 2008, when the Antitrust Law was introduced, and the end of 2011, there have been 61 civil litigations concerning alleged monopolies.
However, plaintiffs have a "rather low" success rate, Sun Jungong, court spokesman, said.
This was due to both a lack of knowledge regarding antitrust cases and difficulties obtaining evidence proving monopolistic behavior or abuse of market position, Sun said.
The interpretation was endorsed as a "positive signal", Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics, said.
It has lowered the threshold for petitioners to gather evidence, a responsibility mostly shouldered by plaintiffs, and has increased the risk of defendants losing a dispute against an alleged monopoly, Sang said.
Getting information proving a monopoly or abuse of position had been incredibly difficult, Sang said.
Sang believes that the interpretation will encourage members of the public to report monopolistic behavior, protect companies and advance the market economy.
"More anti-monopoly investigations concerning mergers and acquisitions of international companies in China can be expected, because it's now easier to establish an antitrust lawsuit," Sang said.
Ge Shunqi, deputy dean of the Institute of International Economics at Nankai University, suggested that the authorities be practical in implementing the interpretation.
"The interpretation aims to avoid abuse of market forces for unreasonable interests. But the authorities need to be practical in carrying out the interpretation because it's OK for a company, including a multinational one, to be a monopoly provided it doesn't achieve this through unreasonable measures," he said.
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