China: A New Dawn in Anti-Trust

by Dorsey & Whitney LLP

Chinese antitrust regulators have not historically been known to engage in aggressive investigations. Things may be beginning to change. Last year, both Qualcomm and IDC were put under the microscope by PRC National Development and Reform Commission ("NDRC") officials using tactics more commonly associated with antitrust regulators in the United States and Europe. Here we will describe what happened.

Qualcomm experienced a classic “dawn raid” in November 2013, when NDRC’s special investigation squad swooped upon Qualcomm's Shanghai and Beijing offices simultaneously, with little or no prior warning, in a seamless, well-orchestrated operation. NDRC officials reportedly seized electronic documents (including pricing and marketing information) and compelled management to provide detailed answers to questions about Qualcomm's chip pricing and involvement in foreign anti-trust investigations. The NDRC has apparently had Qualcomm in its sights since receiving allegations that Qualcomm had engaged in excessive and discriminatory pricing and imposed unreasonable trade conditions on patent licenses and phone chip sales. Qualcomm could be considered particularly vulnerable to such allegations as it is generally assumed to be market-dominant in the wireless communication “standard essential patents” market.

IDC, in contrast, appeared insulated from such an investigation due to its lack of physical presence in China. But NDRC officials were not deterred. The NDRC filed a case in June 2013, alleging that IDC had abused its market dominance in the telecommunications industry by imposing excessive royalties, and invited IDC senior executives to China for "discussions.” IDC, to its credit, cooperated with the NDRC investigation, and in due course applied for a suspension to the investigation based on a series of voluntary commitments to refrain from charging excessive royalties, bundling essential patents, and requiring mandatory cross-licencing free of charge.

The new threat of aggressive antitrust enforcement is not limited to the NDRC, which is responsible for pricing-related issues. The State Administration for Industry and Commerce ("SAIC") earlier in 2013 concluded what, to date, can only be described as the "mother" of Chinese anti-trust investigations against Tetrapak. The SAIC reportedly raided two offices of Tetrapak in Shanghai and Kunshan on the same day, 18 April, 2013. During the course of the Tetrapak investigation, the SAIC squad interviewed heads of departments and relevant employees and collected more than 30,000 emails, internal meeting minutes, numerous sales contracts, and other Tetrapak books and records. SAIC investigators even seized deleted emails, which provided the SAIC with important evidence to build its case against Tetrapak.

“Dawn raids” and similar aggressive investigatory tactics are no longer solely a Western phenomenon. They have now come to China and will increase in frequency over time. Companies should analyse whether or not they are at risk of investigation and take precautions through planning and training to ensure that they can respond appropriately when raids occur.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dorsey & Whitney LLP | Attorney Advertising

Written by:

Dorsey & Whitney LLP

Dorsey & Whitney LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.