Chinese Courts Stick to "Rule of Reason" in Resale Price Maintenance Civil Actions

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Over the first decade of China’s Antimonopoly Law ("AML"), there has been a divergence between the approaches adopted by the Chinese antimonopoly enforcement agencies ("AMEAs") and the Chinese courts toward resale price maintenance ("RPM"). The AMEAs treated RPM as automatically or "per se" illegal, while the courts used the "rule of reason" balancing test. Two recent high-profile rulings have confirmed that Chinese courts will stick to rule of reason for RPM civil cases. This divergence will not be solved anytime soon. Undertakings with relatively low market share are likely to be fined by the AMEAs for RPM but may win a civil action defending their conducts in courts.