By Michael Martina
BEIJING, April 1 (Reuters) - Foreign companies with dominant market positions could be increasingly forced to license technology to competitors or face sanctions under China's latest draft antitrust policy guidelines, according to foreign business groups and attorneys.
The proposals include a so-called "essential facilities" doctrine, a legal concept that assumes some core infrastructure and technology is so important, or the barrier to entry so high, that refusal to share constitutes monopolistic behaviour.
If interpreted broadly, companies could be forced to license their intellectual property (IP) to Chinese competitors or lower licensing costs to benefit local firms, at a time when China is seeking to promote domestic champions.
Draft guidelines for implementing the country's 2008 Anti-Monopoly Law put forward by two of the country's antitrust regulators go beyond global standards, experts and lawyers say. Telecommunications, pharmaceuticals and renewable energy industries, all priority areas for Beijing, are likely to be the most vulnerable.
"China is still fundamentally looking at this as though it is an IP taker rather than an IP creator," said Lester Ross, a partner at law firm Wilmer Hale's Beijing office.
China's antitrust policies are worrying its trading partners, including the United States, which issued a joint statement with China during President Xi Jinping's state visit to Washington last September that both countries would "avoid the enforcement of competition law to pursue industrial policy goals."
On March 9, U.S. Assistant Attorney General William Baer, who heads the Justice Department's antitrust division, testified before the Senate Judiciary antitrust subcommittee about the risk of China using its competition laws to further industrial policy and technology transfers.
"This administration worries about it a lot," Baer said at the hearing.
The issue is likely to be discussed in April when officials from the State Administration for Industry and Commerce (SAIC) and the National and Development and Reform Commission (NDRC), two antitrust regulators to have put forward the proposals in recent months, are expected in Washington for talks, according to a source familiar with the situation.
"INDUSTRIAL POLICY DE JURE"
"The concerns of business groups about the draft IP guidelines are well-founded," said Yee Wah Chin, a New York-based antitrust lawyer at law firm Ingram, Yuzek, Gainen, Carroll and Bertolotti.
The U.S. Chamber of Commerce and the American Chamber of Commerce in China, as well as the American Bar Association, have urged the NDRC and the SAIC to revise the guidelines before they are implemented.