Since the promulgation of the Anti-Monopoly Law (“AML”) in China in 2008, the administrative agencies and the courts have adopted different standards when applying the AML to resale price maintenance (“RPM”) agreements. The administrative agencies have adopted a “prohibition + exemption” principle and presumed RPM agreements to be anti-competitive, while the courts have adopted the “rule of reason” approach. This article aims to explore the reasons behind this difference, summarize the most recent developments, and flag questions in need of further clarifications by legislators, administrative agencies and courts.

By Kate Heyue Peng, William Ding, Lingbo Wei, Weimin Wu & Chi Pan1

 

I. DIFFERENT STANDARDS ARE ADOPTED IN ADMINISTRATIVE ENFORCEMENT AND JUDICIAL PRACTICE ON RESALE PRICE MAINTENANCE (“RPM”)

Article 14 of the PRC Anti-Monopoly Law (the “AML”), which came into effect on August 1, 2008, prohibits RPM.2 Nevertheless, the National Development and Reform Commission (the “NDRC”)3 did not issue its first RPM penalty decision, namely the Liquor case against Moutai and Wuliangye, until February 2013. In that case, the NDRC adopted the principle of “prohibition plus exemption,” which is similar to the “per se illegal” standard. In particular, once a given agreement is deemed constitute RPM, the NDRC presumes it to be illegal without conducting any detailed analysis of its effects on co

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