The first antitrust private action of vertical monopolistic agreement
By Susan Ning, Liu Jia and Hazel Yin
On 1 August 2013, the very same day as the fifth anniversary of China’s Anti-Monopoly Law (AML), Shanghai Higher People’s Court made a final judgment on the Rainbow v Johnson & Johnson case. It is the first case of vertical monopolistic agreement and the court overruled the judgment of the first instance and ruling for the appellant (i.e. the plaintiff). This case is also the first anti-monopoly case in China where the second-instance court reversed the judgment of the first-instance court and ruled in favour of the plaintiff.
The parties in dispute are Johnson & Johnson Medical (Shanghai), Johnson & Johnson Medical (China) (collectively J&J) and Beijing Ruibang Yonghe Science and Technology Trade Company, one of J&J’s distributors. The issue in dispute is whether J&J set a minimum resale price in the distribution contract with Rainbow. Rainbow had been a business partner with J&J for 15 years as its distributor of staplers and suturing products.
According to the distribution contract, J&J authorised Rainbow to sell its product to hospitals in specific districts in Beijing with a minimum resale price. However, J&J discovered that Rainbow acquired distributorship in an unauthorised district by bidding at a price that was below the minimum resale price set by J&J. Consequently, J&J withheld Rainbow’s deposit, terminated its distributorship in several hospitals and eventually terminated supply entirely…
If you are registered and logged in to the site, click on the link below to read the rest of the King & Wood Mallesons briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Analysis from The Lawyer
Shanghai’s ground-breaking Pilot Free Trade Zone could mark the beginning of the long-awaited liberalisation of China’s legal services sector.
Hong Kong IPO activity is hotting up again, but UK legal stalwarts are looking over their shoulders as US rivals make up ground fast