In recent years, antitrust litigation has been used as an important tool of gaming between competing companies, and between suppliers and clients. In comparison with antitrust litigation initiated by consumers, those initiated by competing companies or large suppliers/clients are generally well planned and fully prepared, and target the core business modes of the defendants.
Under these circumstances, the top priority of the defendant should be how to choose an effective response strategy in a short period of time. In this article, the authors summarize the response strategies for antitrust litigation based on their experience of representing clients in a series of high-profile antitrust cases, e.g., 360 v Tencent, Qualcomm v Meizu, Qualcomm v Apple, and JD v Alibaba.
How to develop an overall strategy. An antitrust litigation generally lasts for a long period of time. How a defendant ensures an advantageous position during the time-consuming litigation requires full understanding of the case, the plaintiff, and the defendant itself. Therefore, the defendant should sort out the basic development process of the case, identify the core focus of dispute, set the overall objective of litigation response, evaluate the pace and important milestones of the litigation duration, predict the events that may happen, and determine the principled idea of response in the beginning of the antitrust litigation. These measures help set the keynote of overall response to the litigation and provide a guideline for the subsequent actions of the attorneys and their clients.
How to flexibly utilize the procedural strategies. In complicated antitrust litigation, both the plaintiffs and defendants usually retain the top lawyers, who tend to utilize the procedural strategy to the utmost. For the defendants, the meaning of the procedural strategy is two-fold: First, it blocks the procedural attack of the plaintiff; and second, it counter-attacks and delays the substantial litigation of the plaintiff.
(1) Blocking the attack. In recent years, courts allow act preservation in an increasing number of cases governed by the competition law. Therefore, in the response to the antitrust litigation, the defendant should evaluate the possibility of, and reasons for, the plaintiff’s application for act preservation, so as to determine its overall response strategy. In the event of a parallel or prior investigation, the defendant should also consider how to co-ordinate the demand for investigation and litigation, and how to respond to the application of the plaintiff for obtaining the investigation evidence.
(2) Delaying the litigation. Objection to jurisdiction is another procedural strategy frequently used by the defendant. Since the Supreme People’s Court is the sole court of second instance that hears all the antitrust cases, the courts of first instance now have limited influence on the final results. However, the courts of first instance may impact the progress of the case, and the courts’ involvement in discovering evidence, etc. In addition, the jurisdiction objection procedure may gain more response time for the defendant in the face of the antitrust litigation elaborately planned by the plaintiff.
In addition to jurisdiction objection, the defendant may also challenge the eligibility of the litigation initiated by the plaintiff, and the limitation of action as the procedural strategies based on the details of the case and the requirements for defence.
How to make the best use of substantive defence strategies. Like other civil litigation cases, the substantives of the civil antitrust litigation are also legal analysis and fact finding. In comparison with other civil litigation cases, antitrust litigation generally involves highly professional but also controversial legal issues, as well as highly complicated but hidden factual issues. For this reason, in substantive defence, the key to victory is how to win favourable legal analysis, and allocation of the burden of proof.
Strive to win favourable legal analysis. The antitrust law is highly professional and complicated, but the enforcement history of the Antitrust Law of China is relatively short. Therefore, the steps of analysis, the elements to be considered, and the economic methodologies to be adopted are not completely settled in China for now. In the meantime, antitrust laws have been enforced in Europe and the US for a long time. There are many milestone cases one can draw reference from. The legal issues relating to antitrust litigation have also been more fully discussed in those jurisdictions.
Therefore, during the defence in an antitrust case, the defendant is advised to collect and identify foreign classic cases and theories relating to the legal analysis concerned, based on its profound understanding of the underlying antitrust theories, on the one hand. On this basis, the defendant is advised to analyze and sort out the most favourable ideas of legal analysis for its own defence, and simultaneously sort out the ideas that may be relied on by the plaintiff, and be prepared.
On the other hand, the defendant also needs to go back to and analyze the legal basis that judges rely on, i.e., the Anti-Monopoly Law of the People’s Republic of China (AML). The defendant needs to tactfully integrate the favourable foreign reference cases into the analysis framework of the AML considering legal provisions, legislative framework, and purpose of legislation. The defendant can also disprove the unfavourable foreign reference cases submitted by the plaintiff via pointing out the inapplicability of these cases under the framework or provisions of the AML, so as
to gain most support from the court.
Strive to obtain favourable allocation of the burden of proof. Though the general framework of proof is set under the AML, answers to the specific questions – such as what the dimensions of proof of the plaintiff are, to what extent the proof will be, and whether the evidence produced by the plaintiff is sufficient to back its action – remain unclear. Therefore, in addition to the traditional cross-examination, the defendant is also required to dissect the problems of law and facts based on its profound understanding of the legal issues relating to the AML. In this way, the defendant may disprove the proof presented by the plaintiff and alleviate its own burden of proof.
In addition, the court generally makes decisions with consideration to political and social impacts. In antitrust litigation, especially important cases, how to organically combine the demands of an enterprise with social and political needs is a question that enterprises should consider in their response to the litigation.
Huang Wei, a partner at Tian Yuan Law Firm and the secretary-general of the Anti-trust Committee of the All China Lawyers Association. He can be contacted on +86 10 5776 3888 or by e-mail at [email protected]