While the Shanghai Higher Court`s court decision mentioned above may be deference to vertical cartel and abuse of dominance, it may also encourage downstream distributors or certain law firms to initiate similar proceedings, leading to enthusiastic understanding and interpretation of the case by news and the social public. For this reason, we recommend that the company strengthen the verification and management of compliance with the terms of the sales contract and pay some attention to the preparation and prevention of possible litigation on the following aspects: On April 7, 2015, SAIC established the Safe Harbor regime for the first time in the provisions prohibiting the abuse of intellectual property rights to eliminate or restrict competition. which is currently fully effective. In accordance with Article 5 of these provisions, the exercise of intellectual property rights by an economic operator cannot be considered a monopoly agreement prohibited by Article 13, paragraph 1, paragraph 1, or Article 14, paragraph 3, of the AmL (other horizontal or vertical agreements determined by antitrust authorities), unless there is evidence. agreement results in the elimination or restriction of competition. : It is not difficult to say that Haier`s aforementioned behaviours constitute “minimum resale pricing.” However, whether the practices are illegal depends on several aspects, such as whether competition in the market is sufficient, whether Haier has a strong market position, whether Haier has reasons to restrict competition and the effects of minimum resale pricing. Finally, law enforcement has concluded that the Haier brand has a strong market position by reducing minimum selling prices to the independence of distributors, limiting the ability of distributors to implement a flexible marketing strategy to adapt to competition in the market, and violating consumer rights and interests; As a result, practices are vertical monopoly agreements. The antitrust authority does not accept a request by economic operators to suspend the investigation if the corresponding monopoly agreement has already been investigated. The antitrust authority does not accept the request to suspend the investigation when it comes to horizontal agreements concerning: (1) price fixing; (2) production or sales limitation; or (3) distribution of the raw materials sales or supply market. The exchange of information between competing companies alone is not prohibited by the MRA, unless agreements, decisions or other coordinated acts can be found. IN March 2019, SAMR announced a new horizontal case of the monopoly agreement. Three automotive safety control companies involved in fixing or modifying test charges for vehicle safety technology.
In 2017, two of them were penalized for 5% of their turnover. The third company had no turnover and SAMR seized its illegal profits of RMB334,400. The draft amL shows that vertical agreements must also have the effect of excluding or restricting competition in order to be subject to the AML. As part of a market allocation agreement, members agree on how to eliminate the process of competition between them through market sharing. These are agreements between competitors aimed at not providing subcontracts (assigned) on the market. The customer is therefore obliged to buy from the company selected by the agreement. In China, many cartel agreements and abuse of dominance are not aimed at obtaining monopolistic profits, but at surviving in the competitive market by avoiding below-cost sales. Some companies will go bankrupt without an agreement, as bankruptcy is a natural consequence of price competition.
In this case, the SAMR and the PMRD may impose fines on these companies regardless of their financial situation or insolvency, as financial rigour is inevitable, with or without s