A Chinese corporation has pulled off a final victory in an antitrust lawsuit filed against a government department in southern China’s Guangdong province, state-owned newspaper Legal Daily reported Monday. The case marks a major milestone as the first such verdict since the country’s antitrust law went into effect nine years ago.
On Aug. 3, the Guangdong High People’s Court upheld a previous decision from a lower court in favor of the plaintiff, Shenzhen Tsinghua Sware Software Hi-Tech Co. Ltd. The company successfully argued that the provincial education department had violated China’s antitrust law by granting exclusive rights to one of Sware’s competitors at an engineering contest in 2014, according to Wei Shiling, the lawyer from Dentons law firm who represented Sware.
“Although there have been twists, this decision has added a rather emphatic period to the end of this three-year marathon of a trial,” Wei told Sixth Tone.
“This suit is hugely significant for the rule of law with respect to antitrust,” Zheng Hong, head of the Research Institute of Law at the Sichuan Academy of Social Sciences, told Sixth Tone. “It shows that the law’s restrictions on government-sponsored monopolies have been confirmed via a judicial decision.”
For years, China’s antitrust law seemed ineffectual at preventing monopolies and serving the public interest, to the extent that people began to think of it as a “tiger without teeth,” Zheng said.
In the past, state and local development and reform commissions — government bureaus charged with preventing monopolies, among other duties — have also used their administrative authority to rein in government-sponsored monopolies, Zheng said.
In July, a department of the provincial government of Sichuan in southwestern China successfully petitioned another government entity to cancel a decision that would require state-owned enterprises to give preferential consideration to local, state-owned insurance companies.
“It’s not surprising that the first ruling against a government-sponsored monopoly came nine years after the antitrust law took effect,” Zheng said, adding that more similar rulings are needed. “These kinds of monopolies are difficult to root out, confirm, and handle.”
Editor: David Paulk.
(Header image: A student looks at a computer screen during an engineering contest in Weinan, Shaanxi province, May 4, 2013. Zhang Yupeng/VCG)