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Lifang Wins China's No.1 Anti-monopoly Case

Release time:2010-06-28

Lifang lawyers have successfully defended its client, former China Netcom and now China Unicom, in what is known as China’s first anti-monopoly case. The final judgment found for China Netcom in the case where it was accused of abusing its dominant market position.

The plaintiff, Mr. Li, sued at Beijing No.2 Intermediate People's Court. He argued that China Netcom's Beijing Branch had given him only one choice, pre-payment, when he purchased fixed telephone services. He held that China Netcom had applied discriminatory treatments to trading parties with equal standing and thus abused its dominant market position. The trial court rejected Li's requests. Li thereafter appealed with Beijing High People's Court. The High Court, however, sustained the first instance court decision. This case has attracted wide attention as the first major judicial anti-monopoly case in China. It has been instrumental in establishing principles concerning rules of evidence and market definition in anti-monopoly litigation.

1. The principle of allocating the burden of proof in anti-monopoly litigation has for the first time been specified by an effective court decision. Beijing High People's Court held that in civil actions involving the abuse of market dominance, the plaintiff was responsible for providing evidence concerning the definition of the relevant market, and proving that the defendant held a dominant position in said market, that it had abused that dominance, and that such abuse had caused actual losses to the plaintiff.

2. The judicial procedure made a direct determination on the issue of relevant market. In the final judgment, Beijing High People’s Court supported the trial court's decision that fixed telephone, Little Smart (xiaolingtong) phone and mobile phones were closely substitutable, as were ADSL and wireless access to the internet. Previously, such determination was generally made by competition authority in merger assessment.

Lifang’s perfect success in this case came as a result of the extensive knowledge of its lawyers gained from their involvement in abundant anti-monopoly matters since 2007 and from their famed practice in intellectual property litigation over the years.

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