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Business Articles Awards > Asian Antitrust

Chinese Antitrust Enforcement Against Tying, Exclusive Dealing, and Loyalty Discounts

Peter J. Wang et al., Jones Day White Paper, January 2017

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Recent antitrust enforcement activity in China signals continued aggressive enforcement against "single firm" conduct—that is, actions by a single business, not in coordination with others.

On November 9, 2016, the State Administration of Industry and Commerce ("SAIC"), the Chinese antitrust agency responsible for enforcement against non-price-related anti-monopoly conduct, imposed a RMB 667.7 million fine (US$100 million) on Tetra Pak and its Chinese subsidiaries ("Company") (the SAIC penalty decision on the Company hereinafter "Decision"). According to SAIC, the Company abused its dominant position by means of tying, exclusive dealing, and loyalty discounts, violating China’s Anti-Monopoly Law ("AML"). The conduct found to be abuses of dominance included incentives the Company employed—performance testing, liability of warranty, accumulative volume discount, and customized purchase requirement—to encourage customers that owned or leased the Company’s packaging equipment to use the Company’s own packaging materials and aftermarket service.

The Decision indicates that Chinese enforcement will continue in the area of single firm conduct, following on a record fine for price-related conduct, unfairly high licensing fees, and bundling imposed on another company by the National Development and Reform Commission ("NDRC"), a Chinese enforcement agency, and another Chinese antitrust agency.

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