Digital Markets

When its Anti-Monopoly Law (“AML”) went into effect in August 2008, China immediately became a significant antitrust enforcer on the world stage.  On June 24, 2022, the National People’s Congress, China’s top legislature, passed the Amendment to the Anti-Monopoly Law of the PRC (the “Amendment”), the first significant changes to the AML in nearly fourteen years.  The Amendment, which was signed into law by President Xi Jinping and published on June 24, will become effective on August 1.  It marks a major milestone in antitrust enforcement in China.

The more significant aspects of the Amendment include:

  • significantly enhanced penalties for AML violations, including the introduction of fines for individuals;
  • the introduction of a discretionary “stop-the-clock” mechanism for merger reviews;
  • the codification of a burden-shifting framework created by China’s courts that gives companies the opportunity to defend resale price maintenance agreements; and
  • new safe harbor and burden of proof provisions for matters involving vertical agreements.

Consistent with trends in other jurisdictions around the world, the Amendment also features a special focus on key economic sectors such as the digital economy.

Following the publication of the Amendment, the State Administration for Market Regulation (“SAMR”), China’s lead antitrust enforcement authority, released six sets of draft implementing regulations for public comment.  These cover subjects such as merger control and notification thresholds, anti-competitive agreements, abuse of a dominant market position, and the abuse of intellectual property rights to exclude or restrict competition.  SAMR is accepting comments on these regulations until July 27, 2022.

How Covington Can Help

Covington’s global antitrust and competition practice guides clients through the often-complex web of antitrust and competition laws around the world to help them secure their most important business objectives. Our team, which includes many attorneys who have served in senior leadership roles at government enforcement agencies and in in-house positions, has decades of collective experience advising clients regarding their global antitrust and competition concerns.  If you have any questions concerning the material discussed in this client alert, please contact any of the following members of our Antitrust/Competition practice: Jim O’Connell, James Marshall, and Alexander Wang.

This communication is intended to bring relevant developments to the attention of Covington & Burling LLP’s clients and other interested colleagues. It is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects mentioned herein. Please send an email to unsubscribe@cov.com if you do not wish to receive future emails or electronic alerts.Continue Reading Significant Changes to China’s Anti-Monopoly Law to Take Effect in August

On 24 March 2022, the European Parliament and the Council reached an agreement on the Digital Markets Act (“DMA”), a pioneering initiative to regulate digital markets and endorse the European digital strategy. The DMA would include a set of obligations for “designated gatekeepers”, namely companies whose digital services would be determined as an important gateway for businesses to reach consumers.

The DMA has been negotiated for more than a year, with discussions centering around: (i) the criteria for determining “designed gatekeepers”, (ii) content of specific obligations, and (iii) enforcement mechanisms. The final agreed text has not yet been released, but we share our understanding of the developments in these three areas.Continue Reading European Parliament and Council strike the deal on the Digital Markets Act

In his State of the Union address last week, President Biden declared that he wants to: “strengthen privacy protections, ban targeted advertising to children, and demand tech companies stop collecting personal data on our children.”  This statement comes just a couple of weeks after Senators Richard Blumenthal (D-CT) and Marsha Blackburn (R-TN) introduced the Kids Online Safety Act.  That legislation, together with the Senate Judiciary Committee’s consideration of the EARN IT Act, a bill aimed at protecting children from online sexual exploitation, gives Congress several options to focus on the internet and child safety—now with the President’s blessing.

The timing of the President’s declaration is important because the number of days available for Congress to take legislative action is shortening as the midterm elections approach.  Though Congress has already held several hearings about online platforms, particularly in the Judiciary Subcommittees with jurisdiction over antitrust, now remains an important time for stakeholders to engage in the discussion.  After the President’s address, the U.S. Senate is almost certainly laying the groundwork for what it would call a larger “tech accountability” package.Continue Reading Is the U.S. Congress Preparing a “Tech Accountability” Package?

When the UK left the EU on 31 December 2020, the Competition and Markets Authority (“CMA”) gained new powers, functions and responsibilities previously exclusively reserved to the European Commission (the “Commission”).

This blog explores how the CMA has tackled its increased workload in the first year post-Brexit, under the shadow of the global pandemic, and the extent to which the CMA’s practice has diverged from EU law.Continue Reading Trends, developments and divergence from EU law? The CMA’s first year as a global competition authority

While much of the Senate Judiciary Committee’s meeting next Thursday, February 3, will focus on the pending Supreme Court nomination, the Committee is still scheduled to mark up and vote on the Open App Markets Act (S. 2710)—which purports to address unfair competition in the app market.  This vote follows a particularly contentious markup of the American Innovation and Choice Online Act (S. 2992)—a more sweeping piece of legislation that addresses platforms self-preferencing their own goods or services.  Though that bill was voted out of Committee on a 16-6 vote (with all Democrats voting yes), concerns were raised by both parties about its scope.  Because the Open App Markets Act is a much more targeted piece of legislation, the degree to which members raise similar concerns on Thursday will be a good bellwether of the level of openness or resistance to passing any form of antitrust legislation this Congress.
Continue Reading U.S. Senate Judiciary Committee To Consider Legislation On Unfair Competition in App Market

Tuesday, January 18th, the Federal Trade Commission (“FTC”) and the U.S. Justice Department’s Antitrust Division (“DOJ”) launched a joint public inquiry regarding the agencies’ horizontal and vertical merger guidelines. As part of this inquiry, the agencies are soliciting public comment via a Request for Information (“RFI”) on a wide range of topics that could lead to significant changes in the merger guidelines and increased scrutiny of a broad array of transactions. The agencies’ inquiry will address numerous themes of the merger guidelines including those highlighted below.
Continue Reading FTC, DOJ Announce Process to Revamp Merger Guidelines

On 20 July 2021, the UK Government’s Department for Digital, Culture, Media & Sport (“DCMS”) and Department for Business, Energy & Industrial Strategy (“BEIS”) published proposals for a new regulatory regime for digital markets alongside accompanying consultation documents (the “Consultation”).  The Consultation seeks views from interested parties and closes on 1 October 2021.
Continue Reading New UK Digital Competition Regulation Regime Consultation Closes on 1 October 2021

Covington’s four-part video series offers snapshot briefings on key emerging trends in UK Competition Law. In part three, James Marshall and Sophie Albrighton discuss digital markets, one of the key areas of focus of competition authorities around the world today, including in the UK. They are joined by guest speaker Martin Hansen, Of Counsel in…
Continue Reading Emerging Trends in UK Competition Law Vlog Series – Part III: Digital Markets

Yesterday, the European Commission published its proposals for the Digital Markets Act (“DMA Proposal”) and Digital Services Act (“DSA Proposal”), proposing new regulation of “intermediary services” and “designated gatekeepers”. The proposals would impose new obligations on providers of digital services and augment enforcement powers.
Continue Reading Digital Markets Act Proposal

On 7 October 2019, the German Ministry of Economics and Energy published the draft Act on Digitalisation of German Competition Law (the “Draft Act”).  The Draft Act proposes several key changes to the current competition rules in Germany, with an emphasis on what the proponents present as novel challenges that arise in digital markets and in connection with data.  Subject to further revisions by the Federal Government, the Draft Act would enter into force during the second half of 2020.
Continue Reading German Ministry of Economics and Energy publishes the draft Act on Digitalisation of German Competition Law