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China Daily Website

Medical giant loses antitrust lawsuit

Updated: 2013-08-02 01:39
By ZHOU WENTING in Shanghai and ZHAO YINAN in Tianjin ( China Daily)

"It indicates that the plaintiff, who is usually in a relatively weak position in a monopoly dispute, can be protected by law as long as it adduces sufficient evidence," he said.

Ji Guangming, an attorney for Johnson & Johnson, declined interview requests, while China Daily's request for comments from Johnson & Johnson went unanswered.

Huang Yong, a professor from the University of International Business and Economics' School of Law, said the court ruling will serve as a good example of how to analyze the legality of a vertical monopoly and how to judge business actions that limit competition, such as resale price maintenance.

Sebastien Evrard, a partner in the Beijing office of Jones Day, a global law firm specializing in antitrust cases, said this case will hopefully give some guidance to businesses on how the prohibition of resale price maintenance will be applied in China — in particular whether resale price maintenance can be legal under certain circumstances.

He added that antitrust cases are increasing in China, but there is no need to fear that they will mainly focus on foreign companies.

"If we look back to the past five years, instead of the past three months, you'll see that most of the law enforcement (applied to) Chinese companies."

He said foreign companies are usually more aware of the anti-competition principles, as much of their business is carried out in countries with years of antitrust practice. But since China's anti-monopoly law has its own terms, they should also know what is legal and illegal in the country.

Most, if not all, competition laws around the world prohibit resale price maintenance, Evrard added. China's anti-monopoly law follows the same principle, if it has an anti-competitive effect.

"Most of the court decisions in other countries have found that resale price maintenance is a violation of competition law, because the obligation has the effect of keeping the price up and can potentially result in consumers paying higher prices."

However, Zhu Dan, presiding judge of the intellectual property court of Shanghai High People's Court, said not all impositions of resale price maintenance by suppliers contravene the law.

"Some agreements requiring resellers not to sell products below a certain price have positive effects, such as improving the quality of products in the market and allowing new brands to enter the market," he said.

Contact the writers at zhouwenting@chinadaily.com.cn and zhaoyinan@chinadaily.com.cn

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