New China Antitrust Guidance On Restrictive Business Agreements

Many horizontal collaborations among competitors, and most vertical supply or distribution arrangements, have both procompetitive and anticompetitive effects. Exceptions, of course, are price fixing and other "hardcore" or "per se" illegal antitrust violations, which are considered inherently anticompetitive. Until recently, the Chinese Anti-Monopoly Law ("AML") provided little guidance for companies operating in China about how to evaluate and balance those procompetitive and anticompetitive effects so as to assess an agreement's compliance with antitrust law. Recent guidance will help in counseling companies doing business in China.

In effect since 2008, the AML prohibits certain horizontal and vertical agreements that may restrict competition, so-called "monopoly agreements." At the same time, monopoly agreements may be exempted from the AML when three conditions are met: