Home » China CITIC Bank and Baidu were fined for violating the “Anti-Monopoly Law”, involving the joint venture Baixin Bank

China CITIC Bank and Baidu were fined for violating the “Anti-Monopoly Law”, involving the joint venture Baixin Bank

by admin

There was a case in the banking industry where a ticket was “eaten” for violating the “Anti-Monopoly Law.”

On November 20, the State Administration for Market Regulation issued an administrative penalty decision stating that the newly established joint venture between Fujian Baidu Borui Network Technology Co., Ltd. (hereinafter referred to as “Baidu”) and China CITIC Bank violated the “Anti-Monopoly Law of the People’s Republic of China” (hereinafter referred to as “Anti-Monopoly Law”), based on the investigation and evaluation conclusions, decided to fine Baidu and China CITIC Bank 500,000 yuan respectively.

According to the specific circumstances, in accordance with the “Anti-Monopoly Law” and “Interim Provisions on the Review of Concentration of Undertakings”, the State Administration for Market Regulation on August 12, 2021, on August 12, 2021, the new joint venture between Baidu and China CITIC Bank was suspected of failing to declare illegal implementation of concentration of undertakings. The case is filed for investigation. Upon investigation, the case constituted a concentration of business operators that had not been declared illegally implemented in accordance with the law, but it did not have the effect of eliminating or restricting competition.

The aforementioned joint venture refers to Baixin Bank. Public information shows that in November 2015, Baidu and China CITIC Bank signed an agreement to jointly establish a joint venture-Baixin Bank. Baidu and China CITIC Bank respectively hold 30% and 70% of Baixin Bank and jointly control Baixin Bank. On September 5, 2017, Baixin Bank was established.

The State Administration for Market Regulation pointed out that Article 20 of the Anti-Monopoly Law stipulates that “concentration of operators” refers to the following situations: one is the merger of undertakings; Control; third, the operator obtains control over other operators through contracts or other means or can exert a decisive influence on other operators. In November 2015, Baidu and China CITIC Bank signed an agreement to jointly establish a joint venture and obtain control of the joint venture, which belongs to the concentration of undertakings stipulated in Article 20 of the Anti-Monopoly Law.

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At the same time, Baidu and China CITIC Bank have reached the reporting standards stipulated in Article 3 of the “Provisions of the State Council on the Standards for Declaration of Concentration of Business Operators”, which is a situation that should be reported. Article 21 of the “Anti-Monopoly Law” stipulates that “If the concentration of undertakings meets the reporting standards set by the State Council, the undertakings shall report to the Anti-Monopoly Law Enforcement Agency of the State Council in advance, and the concentration shall not be implemented if the concentration has not been declared.” On September 5, 2017, Baixin Bank was established, and it failed to declare in accordance with the law before that, in violation of Article 21 of the Anti-Monopoly Law, and constituted a concentration of illegally implemented undertakings.

In addition, the State Administration of Market Supervision stated that it has evaluated the impact of Baidu and China CITIC Bank’s new joint venture on market competition. The evaluation believes that the concentration of operators will not have the effect of eliminating or restricting competition. Based on the investigation and evaluation conclusions, the State Administration for Market Regulation decided to impose administrative penalties of 500,000 yuan on Baidu and China CITIC Bank respectively.

(Editor: Qian Xiaorui)

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