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Competition Currents February 2021: China and Japan

China

On Jan. 21, 2021, the People’s Bank of China (PBOC), China’s central bank, issued the draft Regulations on Non-bank Payment Institutions for public comment (Draft Regulations). The Draft Regulations aim to “strengthen the supervision and management of non-bank payment institutions, regulate the behavior of non-bank payment institutions,” and “prevent payment risks.” The Draft Regulations are widely seen as the most recent iteration of China’s enhanced enforcement of antitrust laws vis-à-vis the tech sector, which culminated in November 2020 when governmental authorities ordered the suspension of the Ant Group’s IPO.

The Draft Regulations provide that the PBOC may recommend that the State Administration of Market Regulation (SAMR), China’s antitrust enforcement agency, take measures against non-bank payment institutions, such as suspending the operations, enjoining activities which constitute an abuse of market dominance, or breaking them up if such institutions breach principles of “safety, efficiency, integrity and fair competition” which can “seriously affect the healthy development of the payment services market.”

Under the Draft Regulations, government authorities may initially summon and issue warnings to non-bank electronic payment institutions if one provider reaches one-third, two providers reach one half, or three providers reach three-fifths of the market share in the national non-bank electronic payments market. In addition, the Draft Regulations provide that the PBOC may request that SAMR conduct antitrust investigations where a single non-bank electronic payment institution reaches one half, two providers gain two-thirds, or three institutions gain three-fourths of the market in the national non-bank electronic payments market. While the PBOC did not offer guidance on how market share will be determined for purposes of the Draft Regulations, how the term is defined will have significant consequences for the future of China’s electronic payment market. The Draft Regulations are open to public feedback until Feb. 19, 2021.

Japan

The revised Antimonopoly Act comes into effect

On Dec. 25, 2020, the revised Antimonopoly Act (AMA) came into effect. The major amendments (i) strengthen Japan Fair Trade Commission (JFTC) authority to investigate cartels, (ii) create a new leniency system, and (iii) strengthen attorney-client privilege.

First, the JFTC’s heightened authority to investigate cartels, means, for example, that the JFTC is entitled to order companies to pay an increased surcharge. Second, though only up to five companies were subject to the earlier leniency system, the amended AMA does not place a limit on this number. The number of reductions will be determined based on companies’ measure of cooperation. Third, while attorney-client privilege typically applies to communications between a company and external lawyers (i.e., as a general rule, communications between a company and its in-house counsel are not covered by the privilege.), if the documents meet the requirements of rules, the JFTC determination officer, who is independent of the investigation, will return them to the company without investigators looking at the content.

JFTC imposes JPY 4.3 billion penalty on two major construction companies

On Dec. 22, 2020, JFTC issued penalty orders against two construction companies and cease-and-desist orders against four construction companies for bid-rigging in the construction of a magnetic levitation train. According to the JFTC press release, since February 2015 at the latest, the four companies have restricted competition by deciding in advance which contractors would award construction contracts and adjusting the quoted prices.

JFTC imposed JPY 3.1 billion and JPY 1.2 billion penalties on two major construction companies, respectively. The penalties were reduced by 30%, as the companies voluntarily reported the violation under the leniency system. The other two companies were not penalized, as they had not been awarded any construction contracts. In the cease-and desist orders, JFTC directed the four companies to take required preventive measures and inform their employees about these measures, etc.

Edoardo Gambaro, Yuji Ogiwara, Stephen M. Pepper, Gillian Sproul, Hans Urulus, Dawn (Dan) Zhang, Mari Arakawa, Filip Drgas, Simon Harms, Marta Kowanacka, Pietro Missanelli, Massimiliano Pizzonia, Anna Rajchert, Jose Abel Rivera-Pedroza, Ippei Suzuki and Rebecca Tracy Rotem also contributed to this article.

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XI, Number 36
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About this Author

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Andrew G. Berg Chairs the Global Antitrust Litigation & Competition Regulation Practice and advises clients on litigation, mergers and acquisitions, and other antitrust and competition-related matters before the Federal Trade Commission (FTC), the Antitrust Division of the Department of Justice (DOJ), state attorneys general, and in private litigation. Andrew's practice includes a full range of antitrust transactional and mergers and acquisitions experience, including Hart-Scott-Rodino filings at the FTC and DOJ, and related merger analysis issues. He also counsels...

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Gregory Casas, Greenberg Traurig Law Firm, Austin, Houston, Energy and Business Litigation Law
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Gregory J. Casas is the Administrative Shareholder for the Austin office and focuses his practice on antitrust, complex business litigation, and energy and natural resources law. Greg's antitrust and complex business litigation practices are international in scope. His antitrust practice includes litigating price-fixing, bid-rigging, and market allocation claims, and providing counseling for DOJ/FTC investigations, joint venture formation, mergers and acquisitions, pricing plans, and other contractual relationships. Greg's complex business litigation experience includes...

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Calvin Ding Corporate and Compliance Lawyer Greenberg Traurig China
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As a U.S. attorney who has worked in China for over decade, Calvin Ding has deep experience in international anti-corruption advisory and investigations, cross-border litigation and e-discovery, as well as compliance with Chinese anti-trust, anti-bribery, and privacy laws.

In the anti-corruption space, Calvin frequently advises companies on comprehensive compliance programs, risk assessments, pre-transaction compliance diligence, government policies, and internal investigations. Having spent several years working on the day-to-day implementation of an FCPA compliance program in...

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Miguel Flores Bernés Antitrust & Competition Attorney Greenberg Traurig Mexico City, Mexico
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Miguel Flores Bernés focuses his practice on antitrust and competition issues affecting clients in various industries, including government merger review, investigations of alleged anticompetitive conduct, litigation and counseling. He regularly represents clients before the two Mexican competition authorities: Comisión Federal de Competencia Económica and Instituto Federal de las Telecomunicaciones, and designed and implemented antitrust/competition compliance programs for clients in Mexico.

Prior to joining the firm, Miguel was a partner dedicated to antitrust and competition...

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Víctor Manuel Frías Garcés Commercial Law Attorney Greenberg Traurig Mexico City, Mexico
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The practice of Victor Manuel Frías is focused on commercial law, including competition, mergers and acquisitions and arbitration.

On the competition side, Mr. Frías has represented clients in numerous cartel investigations before the Competition Commission in different industries for over 20 years. He frequently represents clients in pre-merger filings. Mr. Frías has been ranked by different publications as one of Mexico’s premier competition attorneys. He often appears before Mexico’s Federal Specialized Courts in Competition and Telecommunications matters.

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