RPM is one of the hottest areas of competition law in the world. A recent Chinese landmark case—Johnson & Johnson—was not only the first significant case won by a private litigant in China, but it marked the first time a Chinese Court has publicly expanded on an appropriate RPM approach. Our guest Editor, Adrian Emch, author of China’s Anti-Monopoly Law – The First Five Years, has assembled an authoritative collection of papers explaining the significance and portends for the future, beginning with a piece authored by the Judge in this case.
Using this collection as inspiration, we’re dedicating two CPI issues to take a global look at the status of RPM. Completing this issue, we move to SE Asia, and then to Australia and South Africa—two contrarian countries that defend looking at RPM as on a per se basis, and Brazil, which is struggling with per se vs. rule of reason. Next issue, we’ll check in on the U.S., Canada, and Europe.
RPM – A Landmark Decision in China
It may be possible to simplify the principles used in evaluating the effects of RPM agreements: if such agreements do not have the negative effect of restricting price competition, then they can generally be considered not to constitute a monopoly agreement. DING Wenlian (Shanghai High People’s Court)
A Landmark Court Ruling in China: Resale Price Maintenance as Examined in the Johnson & Johnson Case
Whatever the business rationales for wanting to maintain resale pricing, the Johnson & Johnson case is a wake-up call. Chunfai (CF) Lui (Stephenson Harwood)
This suggests that there is scope for putting forward credible economic arguments supported by factual evidence. Yan Yu (RBB Economics)
Foreign companies are happy to see that their Chinese competitors are less able to rely on exclusivity and protectionism, but they also have become more cautious as to their own conduct. Ken Dai (Beijing Dacheng Law Offices, LLP)
Global RPM, Part To Per Se or Not to Per Se
If the promotion of national economic development is the first and most important objective of competition law, increased legal certainty and reduced regulation costs should be viewed as paramount, maybe at the expense of an accurate but costly economic analysis of the net effects of RPM policies. Clara Ingen-Housz (Linklaters)
Australia has not experienced the angst about the per se prohibition of RPM that has occurred in certain other jurisdictions. Philip H. Clarke & Julie N. Clarke (Deakin University)
There may be good reasons for retaining this strict approach to minimum resale price maintenance in South Africa. Heather Irvine (Norton Rose Fulbright South Africa)
This new approach shows an enhanced skepticism or outright disregard towards the role of efficiencies in vertical practices, a trend which seems to be at odd with the increasing role played by economics in antitrust analysis. Ana Paula Martinez & Mariana Tavares de Araujo (Levy & Salomo Advogados)