CHINA Trends and Developments Contributed by: Yi Xue, Zhong Lun
balances rigorous antitrust supervision and protec - tion of normal commercial operations, significantly improves regulatory predictability, and advances China’s shift toward precise, differentiated antitrust governance. Nevertheless, the practical application of the safe har - bour rule remains largely untested to date. No pub - licly available administrative enforcement decisions or judicial precedents have formally applied the vertical safe harbour exemption for market reference. Specific operational details – including standard methodolo - gies for relevant market share calculation and sub - stantive review criteria for exemption claims – will be further clarified through follow-up enforcement prac - tices and judicial adjudication. The actual regulatory effect and boundary of the rule therefore remain sub - ject to further observation. Private enforcement becomes more workable The most practically important private enforcement development concerned proof of loss in cartel dam - ages claims. In the concrete cartel case, a buyer had purchased ready-mixed concrete while the supplier and its only local rival were implementing a price- fixing and market-allocation agreement. An effec - tive administrative penalty established the underly - ing infringement. The Supreme People’s Court held that the buyer’s loss could reasonably be presumed because the relevant contracts were concluded and performed during the cartel period and therefore did not reflect normal competitive conditions. It upheld damages of CNY467,325, calculated by multiplying the CNY90 per cubic metre price increase under a supplemental agreement by the volume purchased. The allocation of evidential burdens is as important as the calculation itself. The supplier argued that higher raw-material costs, rather than the cartel, explained some or all of the price increase. The court held that the supplier had to prove the existence and effect of those non-cartel factors and distinguish them from the cartel effect. Its failure to do so justified use of the full price difference. This reasoning gives practi - cal effect to the 2024 Judicial Interpretation’s effort to reduce the information disadvantage faced by claim - ants. It does not create automatic recovery: claimants must still connect their transactions to the infringe -
ment period and present a coherent counterfactual. But once that foundation is established, defendants cannot defeat the claim by pointing abstractly to other possible causes. The formaldehyde market-allocation case illustrates another route by which antitrust law can affect ordi - nary commercial litigation. A supplier and distributor were vertically related, but also competed for down - stream customers. Their contract prevented the sup - plier from selling to the distributor’s customers. The Supreme People’s Court treated the clause as a hori - zontal allocation of customers and therefore void, even though it was drafted as a non-compete or customer- protection provision. The case is a warning that courts may examine the economic relationship between the parties rather than accept the label placed on a con - tractual restriction. Contract claims can consequently fail where the right asserted depends on a clause that itself constitutes a monopoly agreement. Consumer antitrust litigation: Alibaba platform dominance judgment A reported Supreme People’s Court judgment in Li Zhen v Alibaba and related entities , marks a potentially important development for consumer antitrust claims. Publicly available judgment materials report that the court found the Alibaba, Taobao and Tmall entities dominant in the China online retail platform services market and held that restricting users to Alipay for third-party mobile payment imposed an unreason - able trading condition. The court awarded the indi - vidual claimant CNY10,000 for reasonable expenses incurred in investigating and stopping the conduct. The award was modest and did not compensate a quantified overcharge, but the finding is important because it shows that an individual user’s claim can survive the demanding stages of market definition, dominance, abuse and causation. The case should nevertheless be read cautiously. Consumer claimants will often have difficulty prov - ing direct financial loss where a platform service is nominally free or the alleged restriction affects choice and innovation more readily than price. Reasonable enforcement costs may provide a limited remedy, but they are unlikely by themselves to create strong incen - tives for mass private enforcement. The broader sig -
78 A NTITRUST LI T IGATI O N 2026
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