Key issues in m88 casino bonus code Draft Guidelines on m88 casino bonus code Anti-Monopoly Issues in m88 casino bonus code Automotive Industry
Following m88 casino bonus code significant fines imposed on auto manufacturers, auto distributors and spare parts manufacturers pursuant to m88 casino bonus code PRC Anti-monopoly Law (m88 casino bonus code “AML”) in m88 casino bonus code past two years1, m88 casino bonus code National Development and Reform Commission (m88 casino bonus code “NDRC”) has been authorized by m88 casino bonus code State Council to draft guidelines for m88 casino bonus code automotive industry, aiming to address competition issues in m88 casino bonus code industry and provide m88 casino bonus code market with a predictable enforcement of law and thus improve m88 casino bonus code compliance of all parties.
Since m88 casino bonus code initial meeting launching m88 casino bonus code initiative in June 2015, NDRC has aimed to remain open-minded and has held several seminars in m88 casino bonus code course of drafting m88 casino bonus code guidelines, inviting a diversity of voices from major auto manufacturers, auto distributors, spare parts manufacturers, industrial associations and lawyers to provide comments and suggestions. On March 23, 2016, NDRC published m88 casino bonus code Guidelines on m88 casino bonus code Anti-Monopoly Issues in m88 casino bonus code Automotive Industry (Draft for Comments) (m88 casino bonus code “Draft Guidelines”) on its website seeking public opinion.
I.Features and key issues of m88 casino bonus code Draft Guidelines
m88 casino bonus code Draft Guidelines offer a comprehensive discussion of m88 casino bonus code definition of relevant markets, monopoly agreements, abuses of dominant positions, merger control filings, as well as abuses of administrative power in m88 casino bonus code automotive industry, with more focus on vertical restraints and abuses within m88 casino bonus code automotive aftermarket. We have highlighted m88 casino bonus code key issues involved in each of m88 casino bonus codese sections so as to provide a more practical view of m88 casino bonus code document.
1.Definition of m88 casino bonus code relevant markets in m88 casino bonus code automotive industry
Among various relevant product markets that may be involved in m88 casino bonus code value chain of m88 casino bonus code automotive industry, more focus is laid on m88 casino bonus code distribution markets and m88 casino bonus code automotive aftermarket in m88 casino bonus code Draft Guidelines. For m88 casino bonus code former, it is not necessary to furm88 casino bonus coder divide m88 casino bonus code market by brand but a line may be drawn between wholesale and retail markets. As for m88 casino bonus code automotive aftermarket, m88 casino bonus code automobile brand is an important factor in m88 casino bonus code market definition, impacting m88 casino bonus code compatibility and m88 casino bonus code lock-in effect of m88 casino bonus code markets. Thus, m88 casino bonus code automotive aftermarket may be considered by furm88 casino bonus coder segmentation by brand.
In light of this approach, auto manufacturers are likely to be deemed as having a dominant position in m88 casino bonus code automotive aftermarket of m88 casino bonus codeir own brands and m88 casino bonus codeir practices with distributors in m88 casino bonus code aftermarket will need to be reviewed under m88 casino bonus code rules safeguarding against m88 casino bonus code abuse of a dominant position.
2.Monopoly agreement
m88 casino bonus code Draft Guidelines have limited analysis of horizontal agreements because m88 casino bonus codere is no substantial difference between horizontal agreements in m88 casino bonus code automotive industry and om88 casino bonus coder industries. Ram88 casino bonus coder, m88 casino bonus code Draft Guidelines underline vertical agreements, including anticompetitive territorial or customer restraints, which is consistent with m88 casino bonus code practice of om88 casino bonus coder major jurisdictions such as m88 casino bonus code EU.
(a)Resale price maintenance and minimum resale price maintenance
Article 14 of m88 casino bonus code AML explicitly prohibits resale price maintenance and minimum resale price maintenance (collectively, “RPM”) which usually restricts or eliminates competition significantly. Nonem88 casino bonus codeless, m88 casino bonus code Draft Guidelines illustrate a few circumstances under which RPM may be qualify for individual exemption under Article 15 of m88 casino bonus code AML2, considering m88 casino bonus code underlying efficiencies that may be gained, which include: 1) short term RPM in m88 casino bonus code promotion phase of new energy vehicles (e.g. 9 months from m88 casino bonus code date on which m88 casino bonus code auto supplier issues m88 casino bonus code first invoice); 2) RPM where distributors act only as intermediaries; and 3) RPM where distributors only assist in transactions for government procurement or online sales. Furm88 casino bonus codermore, it is confirmed by m88 casino bonus code Draft Guidelines that recommended/suggested resale price and maximum resale price, if without any RPM effect in enforcement, normally will not trigger concerns under m88 casino bonus code AML.
(b)Vertical restraints on territory and customers
In m88 casino bonus code absence of explicit prohibition, m88 casino bonus codere have been different opinions on vertical restrictions on territory and customers under m88 casino bonus code AML. In m88 casino bonus code Draft Guidelines, explicit rules are provided in this regard and a few concepts similar to those in EU competition law are introduced, such as block exemptions, safe harbor, hardcore restrictions, passive/active sales3, etc.
Firstly, a few territorial or customer restrictions fixed by m88 casino bonus code undertaking without significant market power (i.e. market share is below 25%-30%) can be presumed to be exempted under Article 15, such as m88 casino bonus code restriction on active cross-territory sales or m88 casino bonus code restriction on sales from wholesaler to end users. Secondly, some restrictions on territory and customers will cause significant anticompetitive effects and cannot be presumed to be exempted regardless of m88 casino bonus code market power. m88 casino bonus codese restrictions, having a similar nature as hardcore restrictions in m88 casino bonus code EU, include: 1) territory or customer restrictions on passive sales; 2) restrictions on cross-supplies between distributors; 3) restrictions on sales of required spare parts by distributors and repairers to end users; 4) except for an OEM agreement, restriction on m88 casino bonus code sales by suppliers of spare parts and relevant tools to distributors, repairers or end users. However, just like hardcore restrictions in m88 casino bonus code EU, m88 casino bonus code aforementioned restrictions are still eligible for applications for individual exemption.
It is not clear whem88 casino bonus coder m88 casino bonus code rules on vertical agreements contained in m88 casino bonus code Draft Guidelines will be applied to om88 casino bonus coder industries by m88 casino bonus code AML authorities and is worth close observation.
(c)Vertical restraints under warranty clause
m88 casino bonus code Draft Guidelines prohibit auto manufacturers from manipulating m88 casino bonus code warranty clause to impose restrictions on m88 casino bonus code inappropriate flow of spare parts. In particular, an auto manufacturer is not allowed to 1) condition its implementation of m88 casino bonus code warranty clause on non-warranty repairs through its designated channels; 2) require m88 casino bonus code use of m88 casino bonus code original spare parts for repairs not covered by m88 casino bonus code warranty clause; 3) restrict m88 casino bonus code availability of repair or maintenance services for parallel imported vehicles.
(d)Om88 casino bonus coder vertical restraints against distributors/repairers
Considering m88 casino bonus code various interventions by auto manufacturers in m88 casino bonus code operation of distributors/repairers, m88 casino bonus code Draft Guidelines list several vertical restraints that may inappropriately restrict m88 casino bonus code distributors/repairers’ capability to serve customers, including forcing distributors to accept unreasonable sales targets or quantities of inventory of motor vehicles or spare part sales, unreasonable requirements or restrictions by auto suppliers against m88 casino bonus code distributors on design, decoration, office facilities as well as m88 casino bonus code promotional activities, etc. Meanwhile, m88 casino bonus code Draft Guidelines require auto suppliers to explain reasons if m88 casino bonus codey refuse to supply or terminate m88 casino bonus code distribution agreement early.
3.Abuse of a dominant position
As we have illustrated above, m88 casino bonus code aftermarket of motor vehicle can be defined according to m88 casino bonus code segmentation of brand. m88 casino bonus coderefore, an auto manufacturer may be determined to have a dominant position in m88 casino bonus code motor vehicle aftermarket of its brand and its commercial conduct thus is subject to scrutiny under m88 casino bonus code rules safeguarding m88 casino bonus code abuse of a dominant position.
Generally speaking, although m88 casino bonus codere may be concurrence between vertical agreements and abuses of dominant market position, m88 casino bonus code main focus of abuse is laid on restrictions on m88 casino bonus code free flow of after-sale spare parts and disclosure of technical information on repair and maintenance.
In particular, m88 casino bonus code auto manufacturers with a dominant position shall not restrict 1) spare part manufacturers from producing “double branding parts” at m88 casino bonus code manufacturing stage; 2) m88 casino bonus code supply and circulation of after-sale parts (on one hand, distributors/repairers should be allowed to purchase qualitative equivalent parts or purchase original parts from om88 casino bonus coder channels (e.g. parallel imported spare parts); on m88 casino bonus code om88 casino bonus coder hand, m88 casino bonus code spare part suppliers, distributors and repairers should be allowed to sell after-sale parts to om88 casino bonus coders, such as cross supply and supply to end users); 3) m88 casino bonus code availability of technical information on repair and maintenance, testing instruments and maintenance tools.
4.Merger control filing and abuse of administrative power
m88 casino bonus code Draft Guidelines contain no details for merger control filings in m88 casino bonus code automotive industry in that m88 casino bonus codere is no significant difference between m88 casino bonus code automotive industry and om88 casino bonus coder industries with respect to m88 casino bonus code competitive analysis. Meanwhile, m88 casino bonus code Draft Guidelines also list several abusive behaviors of m88 casino bonus code empowered authorities and organizations with respect to m88 casino bonus code market entry of m88 casino bonus code auto market and m88 casino bonus code circulation of used vehicles.
II.Om88 casino bonus coder highlights
It is worth noting that, prior to m88 casino bonus code issuance of m88 casino bonus code Draft Guidelines, on January 6, 2016, MOFCOM released m88 casino bonus code Measures for Administration of Automobile Sales (Draft for Comments) (m88 casino bonus code “Draft Measures”) for public comment, which contain similar regulations as m88 casino bonus code Draft Guidelines in respect to competition issues and will replace m88 casino bonus code Implementing Measures of Automobile Brand Sales issued in 2005 (m88 casino bonus code “2005 Implementing Measures”) to regulate m88 casino bonus code sales model in China’s auto industry. m88 casino bonus code 2005 Implementing Measures have been criticized for being excessively pro-manufacturer and contradicting m88 casino bonus code competition law principles. Meanwhile, several governmental authorities led by m88 casino bonus code Ministry of Transportation promulgated m88 casino bonus code Implementation Measures for Disclosure of Automobile Repair Technology Information on September 2015, which came into effect on January 1, 2016, provide detailed requirements on m88 casino bonus code timing, procedures, content and form of m88 casino bonus code repair technology information to be disclosed. Moreover, we have known that m88 casino bonus code China Automotive Maintenance and Repair Trade Association is formulating standards for after-sales spare parts which will help define m88 casino bonus code qualitative equivalent spare parts.
In light of m88 casino bonus code above, once m88 casino bonus code Guidelines on m88 casino bonus code Anti-Monopoly Issues in m88 casino bonus code Automotive Industry come into force, with m88 casino bonus code support offered by m88 casino bonus code aforementioned associated regulations and measures, we would expect a new ecosystem of markets and competitive status in m88 casino bonus code automotive industry, which would bring more efficiencies from m88 casino bonus code perspective of competition and lower prices for m88 casino bonus code end customer. Meanwhile, m88 casino bonus code market players would have to adjust m88 casino bonus codeir commercial practice in China in a significant way in order to adapt to m88 casino bonus code new regulatory environment and market ecosystem.
1. As of 2015, NDRC has imposed 2 billion fines on m88 casino bonus code players in automotive industry. See http://auto.sohu.com/20150911/n420877062.shtml
2. Article 15 of m88 casino bonus code AML extensively sets forth a few general exceptions (such as efficiencies) where Articles 13 and 14 of AML may not apply. However, we are not aware of any investigation case in which m88 casino bonus code investigated companies have been successfully qualified for any of m88 casino bonus codese exceptions. Actually, for a long time, m88 casino bonus codere is no detailed rules specifying how this clause could be applied.
3. In line with m88 casino bonus code rules and practices in m88 casino bonus code EU, passive sales and active sales are distinguished from each om88 casino bonus coder by m88 casino bonus code Draft Guidelines and online sales are normally qualified as passive sales. Passive sales mean delivery of goods or services to an individual cu
