The Ministry of Commerce recently promulgated the Measures for the Review of Concentrations of Business Operators (revised draft) for consultation. However, the revised draft still lacks provisions on the shifting alliances concept. The relevant Anti-monopoly Law enforcement agencies should consider this concept in future, as acknowledging it at the legislative level will finally place China's antitrust system among those of the world's most advanced anti-monopoly jurisdictions.
The General Office of the State Council recently issued the Measures for the Management of Scientific Data, which aim to improve and standardise the management of scientific data, safeguard scientific data security and encourage transparency and the sharing of scientific data. This is the first time that China has released measures which regulate scientific data at the national level. However, compared with some European countries and the United States, China still has far to go in this regard.
The Anti-monopoly Law enforcement agencies are increasingly investigating and finding fault with collective boycotts among competitors. As the presumption of illegality for collective boycotts requires a high level of compliance, businesses should be aware that although an independent decision not to deal with distributors or suppliers may not raise Anti-monopoly Law concerns, an agreement with competitors not to do so could raise such concerns.
Following a media report that certain mobile phone application software was infringing user privacy, the Ministry of Industry and Information Technology organised talks with three internet companies. The ministry pointed out that the companies had collected and used users' personal information without fully disclosing the purpose of its use. The companies must now conduct rectifications to fully protect users' rights to be informed.
The State Council recently submitted a proposal to the National People's Congress concerning the council's institutional reform programme. The proposal has shed light on the plans to consolidate the antitrust enforcement powers of the three antitrust agencies under the State Administration for Market Supervision. Although the merger is significant in terms of institutional reorganisation, it will not fundamentally change Anti-monopoly Law enforcement activities in China.
The China Insurance Regulatory Committee recently promulgated the new Measures for the Administration of Equity in Insurance Companies, which state that if the shareholding proportion of an insurer's foreign shareholders accounts for more than 25% of its registered capital, the relevant provisions of the measures must be applied by reference. This express inclusion of foreign-invested insurers represents a substantial shift away from current practice.
In 2017 the National Development and Reform Commission actively carried out legislative work and formulated and promulgated industrial guidelines and enforcement procedures. In addition, it remained active in its antitrust enforcement by not only penalising a variety of enterprises for anti-competitive conduct, but also targeting administrative agencies that had abused their administrative power in order to restrict or eliminate competition.
Since the end of 2017, the China Insurance Regulatory Committee has taken numerous regulatory measures to address disorder in the insurance market, some of which have brought certain domestic life insurers to task. The measures are notable, as they underline a renewed emphasis on controlling financial risks, which is of utmost concern for the government.
The National Development and Reform Commission recently released price conduct guidelines for business operators active in the drugs prone to shortages and active pharmaceutical ingredient (API) markets. The guidelines strengthen the API market's price supervision mechanism, clearly regulate market pricing behaviour with regard to drugs prone to shortages and APIs and provide practical guidance for relevant pharmaceutical companies with regard to their pricing behaviour.
Following the resumption of bilateral trade treaty talks between China and the United States, a 100-day plan was mooted which promised to improve trade ties going forward. One area of focus in this regard has been the foreign ownership limits that apply to inbound investment in Chinese financial services groups, including those pertaining to the country's insurance industry. This policy shift has given rise to expectations that further foreign investment in the insurance industry will increase significantly.
The National People's Congress Standing Committee recently passed the long-awaited amendments to the Anti-unfair Competition Law, which will take effect in January 2018. This is the first time that the law has been amended and it will have a significant impact on business practice in China. In particular, the amended law includes a new section addressing internet-related unfair competition and offers practical and clear guidance for business operators on how to compete legally and fairly online.
China's shift towards a knowledge-based digital economy is fuelling growth in the insurance sector, which aligns with the government's plan to double the rate of insurance penetration by 2020. By this date, insurance premium income is expected to have reached Rmb4.5 trillion. If this aim is achieved, China will have usurped the United States to become the world's largest insurance market, which bodes well for overseas insurers looking to participate in the domestic market.
At the recent China Competition Policy Forum, a Price Supervision and Anti-monopoly Bureau official commented on the potential enactment by the National Development and Reform Commission (NDRC) of regulations on standard-essential patent licensing practices. The NDRC's proposal aims to ensure greater consistency with the Anti-monopoly Law and develop a consistent approach to the enforcement of IP rights-related anti-competitive conduct.
A new wave of 'insurtech' companies (ie, insurers engaging with online distribution models and tech companies foraying into insurance) are recognising the gains to be made by entering into this emerging market. However, these developments by no means spell the end of the larger, more traditional Chinese insurers, which are adapting their longer-term business development strategies in response.
Following the recent final judgment of the Yunnan Province Higher People's Court, the curtain has – for now – fallen on the Yunnan Ying Ding v SINOPEC refusal to deal case. This case is unique for several reasons. Among other things, it is reportedly the first antitrust dispute to involve the Chinese petroleum industry. In addition, it is the first case in which the plaintiff's claims have concerned refusal to purchase.
The National Development and Reform Commission recently penalised two Chinese pharmaceutical undertakings for alleged collective abuse in the isoniazid active pharmaceutical ingredient market. This was the first time that the Chinese enforcement authorities applied the rules of the Anti-monopoly Law to a case concerning collective abuse.
The Ministry of Commerce (MOFCOM) recently released an exposure draft of the amendments to its Provisions on the Antitrust Review of Concentrations for public comment. The amendments aim to improve the functionality, comprehensiveness and quality of the provisions by incorporating MOFCOM's experience and its existing best practices. In general, this move to amend the provisions is praiseworthy. However, several issues will need to be resolved through the public consultation process.
The healthcare industry has gradually become a key focal point of Anti-monopoly Law enforcement in China. Between the implementation of the law in 2008 and the end of July 2017, the National Development and Reform Commission and the State Administration for Industry and Commerce concluded a number of anti-monopoly penalty cases and accumulated significant industry experience. As such, healthcare enterprises are likely to face increasing anti-monopoly compliance challenges in future.
The National Development and Reform Commission recently published its Guidelines on Trade Association Pricing Activities. The guidelines clarify trade associations' different pricing activities and categorise them according to their associated level of legal risk. As the guidelines advise associations on how to carry out their activities, they will have a direct impact on legal risk assessments and the day-to-day business of trade associations and their members.
Recent ransomware attacks across the globe have once again brought to the fore the all-encompassing enterprise risk management challenge that cyber-risks present to corporations. The raft of operational consequences of such an attack present an ever-burgeoning opportunity for insurers to expand further into this potentially lucrative new line of business. This is particularly pertinent in China, where there has been a shift towards increasing digitisation and automation in various high-tech industries.