Is resale price maintenance illegal in China? The Gree case

In competition law, vertical resale price maintenance (“RPM”) agreements between upstream and downstream firms are generally seen as not so severely harmful to competition as horizontal price-fixing agreements among direct competitors. Therefore, whether and to what extent RPM should be prohibited is a question having been answered differently in different jurisdictions. A peculiar situation exists in China, where even in the same country the standard for assessing legality of RPM diverges between administrative and judicial enforcement. While, in administrative enforcement, the responsible enforcement body, the National Development and Reform Committee (“NDRC”) considers RPM illegal “per se”, the Chinese courts have established a more moderate  approach based on the “rule of reason” to assess the legality of such agreements. The latter approach is well exemplified in the Gree case, for which the Guangdong Higher People’s Court has issued a second instance decision earlier this month. Continue reading “Is resale price maintenance illegal in China? The Gree case”