CPI Asia Column edited by Vanessa Yanhua Zhang (Global Economics Group) present:
Yutai: A Landmark Case on Resale Price Maintenance in China — The Divergence in Public and Private Enforcement is Now Institutionalized By Jet Deng, Ken Dai and Rangi He[1]
- Introduction
On December 21, 2017, a long-anticipated judgment of the second instance of Yutai v. Hainan Provincial Price Bureau was handed down by Hainan High People’s Court.[2] It was previously anticipated that this judgment could terminate the five-year long divergence in the approach towards resale price maintenance (“RPM”) adopted by NDRC (National Development and Reform Commission[3]) and the courts.
As the antitrust agency responsible for the public enforcement against RPM in China, NDRC adopts the “prohibition + exemption” approach[4] against RPM. By far, NDRC has prohibited around 18 RPM cases and imposed significant fines on the companies committing RPM (the record fine on a single company is USD $55.12 million（CNY 350.06 million）, which was imposed on Mercedes-Benz in 2015[5]). On the other hand, there is no public record of successful exemption case to date.
By contrast, the plaintiffs who brought RPM cases against their suppliers before the courts could hardly win, actually the plaintiffs never won a single case up to the date. This is mainly because the courts adopted the rule of reason approach towards RPM, which requires the plaintiffs to prove the RPM’s effect of eliminating or restri
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