Beijing No. 2 Intermediate Court Issues First Horizontal Agreement Ruling In Seafood Cartel Lawsuit

On Nov. 21, 2013, the Beijing No. 2 Intermediate Court issued a ruling in favor of a plaintiff against Beijing Seafood Wholesale Industry Association (the Association) in a private action alleging that that certain rules of the Association are invalid under the Anti-Monopoly Law. The court ordered the Association to cease organizing its members to reach monopolistic agreements by adjusting and fixing the price of scallops produced by Dalian Zhangzi Island Group Company Limited (Zhangzi Island Company).

Certain rules of the Association prohibited its members from participating in unfair competition or refusing to sell scallops at the price fixed by the Association. Members also were prohibited from selling whole scallops to non-members in markets in which the Association's members participated. A member's violation of these rules would subject it to a fine of RMB 10,000 ($1,640) for each violation.