Antitrust News (Again)

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Recent reports about Microsoft being a target for China’s new antitrust laws have resurfaced in Caijing Magazine, which reports:

“On July 31, one day before the new anti-monopoly law went into affect – the first of its kind for China – came into effect, lawyer Dong Zhengwei formally petitioned the Ministry of Commerce (MOC), the State Administration of Industry and Commerce (SAIC), and the National Development and Reform Commission (NDRC) to open an antitrust investigation into Microsoft.

Dong alleged that Microsoft has used its 70 percent market share to manipulate software prices in China. He proposed a US$ 1 billion fine on the company.

On August 21, Dong received a formal notice from the MOC stating that antitrust investigations should be conducted by the NDRC and SAIC. In the same day, the NDRC formally notified Dong that his petition against Microsoft had been accepted and would be handled by the NDRC’s price monitoring department.

An official from the drafting committee that wrote the anti-monopoly law told Caijing that Microsoft will face a punishment from NDRC, SAIC and MOC if the company’s alleged monopolistic activities are verified by the investigation. Microsoft will have the right to appeal if it is found to be in violation.”

It will be interesting to see where this leads, but for the moment anyone with concerns would be well advised to monitor the situation, and to take a look at China Law Blog’s latest post on related M&A notification rules from Steve Dickinson, which notes:

    “The new standards make clear the PRC does not intend to use the AML rules to excessively interfere in international M&A transactions. The trend in fact has been for the PRC to bring its approach into alignment with the international approach…

    Much foreign commentary on the AML has showed a fundamental misunderstanding of the PRC foreign investment policy. As PRC officials have repeatedly stated, nothing concerning the AML or its rules is intended to change the current position of the PRC on utilization of foreign investment. China will remain remarkably open to foreign investment. However, the fundamental principal is that foreign investment is expected to contribute something new to China. If nothing new is contributed, that is, if the investment is purely for “speculative” purposes, then the investment will not be approved.”

FDI in China needs more than just money to succeed these days.

See news source:

Microsoft Faces an Antitrust Investigation
The NDRC has accepted the petition of a Chinese lawyer calling for an antitrust investigation into Microsoft’s business practices.

3 Responses to “Antitrust News (Again)”

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