A Comparative Analysis of Antitrust Approaches to Resale Price Maintenance in China and the United States and Recommendations for China Going Forward

A Comparative Analysis of Antitrust Approaches to Resale Price Maintenance in China and the United States and Recommendations for China Going Forward By Yang Yang (Chinas University of Political Law and Science)1

Introduction

There is significant divergence between Chinese and U.S. approaches to antitrust analysis of vertical restraints, particularly for resale price maintenance (RPM). China, at least in administrative matters, generally applies a more formalistic approach with presumptions of illegality. In contrast, U.S. federal antitrust agencies and courts apply a full-blown effects-based analysis that requires a showing of harm to the competitive process and consumers. In addition, while the U.S. antitrust agencies and courts recognize that monopoly power is a necessary but not sufficient condition for RPM to harm consumers,2 Chinese enforcers do not. Instead, Chinese enforcers have imposed liability for RPM absent a showing of monopoly power (or “dominance” as the concept is referred to in China).

There is also divergence within China itself as between administrative and private enforcement. Specifically, in administrative (or agency) enforcement, RPM is analyzed under a presumption of illegality (known as the “Prohibition + Exemption” approach), whereas courts have applied a rule of reason (or a full-blown effects-based) analysis for enforcement by private plaintiffs. Under the Prohibition + Exemption approach, China’s Anti-Monopoly Law (AML) is …

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