What with all the nationalism-infused shenanigans of Coca-Cola’s failed bid for juice maker Huiyuan, it seems somewhat encouraging that China’s Anti-monopoly Law is being used in the interests of grass-roots consumer activism. A Beijing-based lawyer named Zhou Ze is taking the fight to China Mobile, having seen his case against the telecom behemoth – which he claims has abused its dominant market position by charging subscribers different fees for similar services – accepted by Dongcheng District Court last week.
Good for Zhou. After all, isn’t this the kind of social justice that the Anti-monopoly Law was always supposed to deliver? Back in the summer of 2007, there was much talk about the plight of China’s instant-noodle lovers (no small group) who had just been hit by across-the-board price hikes of around 20%. Their budget snack was becoming less budget, and they complained. Fortunately, the National Development and Reform Commission was listening. An investigation found that members of the China chapter of the World Instant Noodle Association were illegally colluding with one another to fix prices. The noodle makers were punished and we were told to expect more victories for consumer activism once the Anti-monopoly Law was in place.
While China Mobile undoubtedly has a dominant market position, it remains to be seen whether the company is abusing it, or whether the judicial authorities would really want to penalize a large state-owned enterprise. Needless to say, there is an escape route: State-owned firms with administrative monopolies in industries that “implicate national economic vitality and security” are not to be touched by investigators. On issues of market domination – in an economy still making the transition from state to private ownership – China will take time to find the right balance.
Another drama waiting to be played out is how foreign firms hold up against accusations of abusing dominant market positions in China. When the Anti-monopoly Law arrived, there was also much talk about the likelihood of firms such as Microsoft coming under investigation. Lawyers said they knew of foreign companies being targeted, although we have yet to see concrete results. It’s not unreasonable to suggest that a consumer lawsuit could be a useful tool in efforts to restrict foreign access to the China market, or even just as a money-spinning venture by plaintiffs who have seen Western firms grow rich in China on the strength of their intellectual property. Perhaps it’s not so easy to escape nationalist leanings after all.