Judicial Evaluations of Minimum Resale Price Maintenance Behavior

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Ding Wenlian, Aug 22, 2014

On the judicial cognizance of vertical agreements stipulated in Article 14 of China’s Anti-Monopoly Law, scholars mainly have taken one of two views. One view adopts the dominant principle currently applied in U.S. judicial practice, the “rule of reason” approach, in which the burden of proof lies on the plaintiff to prove both the existence of vertical agreements and that the agreement has the effect of excluding or restricting competition. The second view adopts a dominant principle similar to what is currently used in EU judicial practice, the so-called “rebuttable presumption” approach, which presumes that vertical agreement is illegal. Under this view, the defendant needs to cite Article 15 of the AML and present legal evidence to prove its behavior legitimate.

These views are applicable to antitrust enforcement and judicial practice. For the analysis of the nature of minimum resale-price-maintenance agreements and such acts, there are many differences in legal evaluation principles, analyses, evaluation factors, and the distribution of burden of proof. Regarding these issues, we would propose some preliminary opinions that are combined with the judgment of the second instance of the Johnson & Johnson case that was decided by the Shanghai Higher People’s Court in August, 2013.