Whether a resale price maintenance
("RPM") provision is deemed to infringe
the Anti-Monopoly Law
("AML")1 regardless of
whether it has an impact on competition has been one of the most
cloudy issues under the AML since the law came into effect in 2008.
A recent decision by the Shanghai No.1 Intermediate People's
Court ("Shanghai Court") has found that
for RPM to infringe the AML it must have an adverse impact on
competition. While it is still too early to say if this court
decision will be followed by other Chinese courts, the decision
provides valuable guidance for companies when considering how the
AML will apply to their distribution agreements in China.
Facts and Decision
The case relates to a dispute between Johnson & Johnson
Medical ("J&J") and one of its
distributors, Rainbow Medical Equipment & Supplies Co.
("Rainbow"), regarding a minimum RPM
clause in J&J's distribution agreement. Rainbow had been a
distributor of J&J's suturing products for 15
