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Business Articles Awards > Asian Antitrust

The Decision of the Supreme People’s Court in Qihoo v. Tencent and the Rule of Law in China: Seeking Truth From Facts

Emilio Varanini and Feng Jiang, Competition: Antitrust, UCL and Privacy Section of the California State Bar (Vol. 25), Spring 2016

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The rule of law creates social order, enhances legitimacy, and promotes economic growth. To accomplish these goals, the rule of law requires the development of administrable principles, the use of a system of case precedent, and the implementation of due process. In the area of antitrust, there is an additional gloss on the rule of law in that the need for administrable rules must be balanced against the application of economic theories. However, at bottom, these notions all depend on a competent judiciary that can, in fact, carry out these tasks. The 2014 antitrust decision by the Supreme People’s Court—Beijing Qihoo Technology Co., Ltd. v. Tencent Technology (Shenzhen) Co., Ltd.4— is a thorough opinion demonstrating the judiciary in China is up to the job. However, this decision’s ultimate significance will be determined by how China follows-up on it; in its receiving the quasiprecedential status under Chinese law known as a “Guiding Case;” in private litigants in China using all of the procedural and evidentiary tools entrusted to them to litigate antitrust cases going forward based on the lessons learned from this decision; and in the Chinese courts being now entrusted to exercise the administrative review power delegated to them vis-à-vis government agency actions. Given that China is the second largest economy in the world, China’s fostering further the rule of law becomes particularly important not just for its own growth and reform but also for the rest of the world.

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