A Study On The Legal Regulatory Path Of Resale Price Maintenance

Resale price maintenance (RPM) is the practice whereby a manufacturer and itsdistributors agree that the distributors will sell the manufacturer’s product at fixingprices, at or above a minimum fixing price or at or below a maximum fixing price.RPM is an expression form of vertical monopoly and this practice excludes andrestricts the competition in relative market. As a result, the competitive order ofmarket would be distracted and the benefits of customers would be damaged.However, economic theories show that RPM could also bring positive effects likepromoting competition in the market. In order to maintain order of the market andprotect benefits of customers while ensuring reasonable distribution of resources andpromoting development of market economy, anti-monopoly and judicial organs inChina should rationally regulate the practice of RPM with relevant laws andregulations.In2013, NDRC started to penalize companies, such as milk power companyHESHENGYUAN, for distracting order of market by RPM. At the same time, thecase of Ruibang v. J&J Vertical Price-Fixing Litigation in the Shanghai higherpeople’s court had final order,which is the first vertibal monopoly case in Chinesecourt, result in great discussions. These series of judicial practices caused controversyand speculation in the society and related academic field.Based on two cases below, this essay discusses the potential problems fromregulating RPM in practice, expecting rational measures to solve RPM promble inChinese anti-monopoly laws. In the introduction part, background and ambitions ofthis paper has been briefly introduced; in the first part, practical evidence ofregulating RPM by NDRC and two courts in Shanghai have been elaborated andanalysed. By comparing these cases, this paper suggests potential problems whenjudicial regulating of RPM practice in China. In the second part, this essay comparesdevelop trend and applicable principal of RPM in the US and in EU, which could beused as reference of the regulating RPM development in China. In the third part,existed laws and regulation of RPM in China have been classified and analysed,including the effect of RPM in the market and the speculation of Article14andArticle15in anti-monopoly law. In the conclusion part, the author explains views of previous questions.