Building A Coherent Legal Framework for Vertical Price Restrictions in China

On August 1, 2022, a reform of China’s Anti-Monopoly Law (“AML”) came into effect. The changes affect, inter alia, the regulatory framework for vertical price fixing and minimum resale price maintenance (“RPM”). The reform largely follows the Supreme People’s Court in Yutai, attempting to reconcile the positions of the antitrust agencies and the judiciary. This article explores the application of the AML to vertical price fixing and minimum RPM over the years, and the implications of the adjustments made to China’s basic competition legislation. The article covers the original drafting of the AML, the judicial and administrative positions, the landmark Yutai judgment, the AML reform and recent administrative decisions. In doing so, the article attempts to shed light on the road ahead for the legality of vertical price restrictions in China.

By Sandra Marco Colino^[1]

I. Introduction

In the 14 years that have passed since the entry into force of the Anti-Monopoly Law (“AML”),^[2] China’s first competition legislation, few topics have been as contentious as the treatment of vertical price restraints. The “prohibition in principle plus exemption” approach^[3] established in the original version of the AML for both vertical price fixing and minimum resale price maintenance (“RPM”) raised doubts as to whether anticompetitive effects had to be demonstrated to sustain a breach of the law. This in turn led to tensions between the administrative and