China: Non-Compete Clauses in the Transactional Context

Abstract

Non-compete clauses in agreements between competitors can be problematic under antitrust rules. China is no exception.

A sub-set of non-compete arrangements between competitors – those entered into within the context of a structural transaction – has received very little attention by legislators and regulators in China. There is a lack of explicit rules as to whether and how non-compete obligations can be justified in the transactional context. Against this background, this paper attempts to analyze non-compete clauses under the general antitrust framework and looks at four judgments by Chinese courts from 2019 and 2020.

Keywords: Antitrust, anti-monopoly, competition law, private litigation, M&A, merger control, SAMR

JEL Classification: K21