THE DECISION OF THE SUPREME PEOPLE’S COURT IN QIHOO VTENCENT AND THE RULE OF LAW IN CHINA: SEEKING TRUTH FROM FACTS¹

By Emilio Varanini² and Feng Jiang³

Abstract: 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 quasi-precedential 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-a-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.

I. INTRODUCTION

The rule of law is important not only to create order in society and enhance government legitimacy but also to promote economic growth.⁵ However, the development of the rule of law is about process as much as it is about results.⁶ The English Common Law, for example, developed as it did because King Henry II sought to impose a system of courts that would administer a law common to England so as to increase his power at the expense of local customary feudal rights.⁷ Such courts could offer litigants "better justice than they could have at the hands of their lords" via offering a fairer process.⁸ For example, only royal judges could summon a jury.⁹ And a jury came to be thought of as "a safeguard from arbitrary perversion of the law."¹⁰ This encouraged the people to resort to royal courts that now had to be staffed with professional judges, removed from local prejudices, who would apply a law common to the entire country.¹¹ Even though antitrust principles are subject to revision based on the evolution of economic understanding,¹² antitrust is no more exempt from the rule of law than any other body of law.¹³