In 2020, the Anti-Monopoly Law of China is under revision and the draft amendments have introduced a separate clause to deal with hub-and-spoke antitrust cases. In this article, we visit the hub-and-spoke conspiracy from the perspective of economists. First, we set the hub-and-spoke conspiracy into three categories and explain their characteristics. Second, we review and compare two representative hub-and-spoke cases, one is administrative investigation and the other is litigation case. Via these two cases we illustrate the two different approaches that competition agencies and the court have taken, per se illegal versus rule of reason. Finally, we lay out the economic analysis framework for approaching hub-and-spoke cases and intend to shed some light on the core issues that one should investigate when dealing with such cases in China.

By John Jiong Gong, Vanessa Yanhua Zhang & Rita Li1

 

I. INTRODUCTION

The antitrust legal and economic communities have traditionally treated anticompetitive behaviors as dichotomized along horizontal and vertical dimensions. Horizontally, such behaviors are called “collusion” or “conspiracy” among industry competitors, whereas otherwise they are called vertical restraints between an upstream firm and a downstream firm. In China, the Anti-Monopoly Law (“AML”) has Article 13 and Article 14 to deal with horizontal and vertical antitrust offenses respectively. But in the real world, a firm’s potential alleged antic

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