Citizens and antitrust violations: legitimacy and effectiveness concerns in China's private antitrust enforcement regime

Back in 2007, China’s Anti-Monopoly Act 2007 (‘AML’) was heralded as a major advance in China’s entry to the global economy’s rules-based marketplace. Although naturally it contained some China-centric characteristics, on the whole it contained key antitrust prohibitions, commonly understood and easily recognisable to the global antitrust community. China therefore appeared to have substantially met two key benchmarks which any credible antitrust enforcement system should possess, namely Legitimacy and Effectiveness.
However, under the surface another story was emerging. In this original contribution examining 4 key areas of concern which leave consumers vulnerable, the authors demonstrate how multiple antitrust Legitimacy and Effectiveness deficiencies arise in China’s private antitrust enforcement model when compared with corresponding EU and US private antitrust enforcement mechanisms. Drawing on leading judicial decisions handed down by China’s higher courts, and illustrated by appropriate comparisons with EU and US jurisprudence to accentuate the deficiencies, the authors have identified major Legitimacy and Effectiveness deficiencies in China’s courts and legislative approach to private antitrust enforcement which fail to protect consumers: (1) compensation awards inadequacy; (2) indirect purchasers’ lack of rights; (3) the absence of a passing-on defense; and (4) the limitations of collective / public interest mechanisms.
Concluding that Legitimacy and Effectiveness have been devalued in the AML private enforcement model, the comparative analysis undertaken throughout the piece with corresponding EU and US jurisprudence is illuminating, because it reveals how Legitimacy and Effectiveness are seriously lacking in China’s private antitrust enforcement model.
Accentuating the acuity of this problem, the authors further establish how 2021 AML amendment proposals continued to ignore the above 4 key lacunae, raising the wider concern that China’s 2021 AML amendment proposals did not view consumer litigants as groups worthy of private antitrust enforcement protection, in a manner equivalent to that enjoyed by their EU or US counterparts. Addressing these key lacunae, the authors advance reform proposals to address the identified gaps in protection. Absent such reforms, Effectiveness and Legitimacy concerns about private antitrust enforcement in China will remain unaddressed and consumers will remain unprotected.