Implications of China’s Antitrust Guidelines for the Automobile Sector on Regulation of Vertical Restraints

By:Zhan Hao & Song Ying (China Law Vision)

The automobile industry has been under the radar of China’s antitrust enforcement for a number of years. Since 2014, the agency had successively issued fines against many players in the automobile supply chain, including auto parts manufacturers, and motor vehicle suppliers and distributors. By November of 2019, the aggregate antitrust fine in the car sector reached up to RMB 2.5 billion. Excepting those cartel-related penalties against 12 Japanese auto parts manufacturers in 2014, all of other penalties related to the violation of vertical restraints.

China’s antitrust agency’s greatest competition concerns in the automobile sector relate to vertical restraints. Possibly underscoring this concern, the newly published Antitrust Guidelines on Automobile Industry (the “Automobile Antitrust Guidelines”) placed its main focus on clarifying issues arising from vertical restraints. Therefore, it is critical to take stock of this publication in order to better understand the enforcer’ attitude towards vertical restraints for companies in the automobile sector.

To help companies in the automobile industry better make their own assessments on antitrust compliance in China, this article explains the antitrust rules related to vertical restraints provided in these guidelines and analyzes their implications…

CONTINUE READING…