The Law Case Evaluation Of Ruibang Accuses JNJ (China) Of Limiting The Resale Price

Resale price maintenance (RPM) is the practice whereby the traders ofdifferent sectors within the same industry agree that both the distributorsand resellers shall sell the manufacturer’s product at certain prices,otherwise they will be punished with liquidated damages or themanufacturer may stop doing business with them.It is about a century since the earliest regulation on RPM conductswhich originates from the case of Dr. Miles in the USA. The case ofaccusation made by Rui Bang against Johnson&Johnson of RPM is the firstjudicial case of this kind in China. It includes four controversial issues. Thefirst one is whether the party involved in signing the monopoly agreementhas the lawsuit qualification or not; the second one is whether theelimination and restriction of competitive effect is a component of themonopoly agreement or not; the third one is how to distribute the burden ofproof; the fourth one is how to identify the compensation for a loss.The thirteenth and fourteenth articles in the Anti-Monopoly Law of thePeople’s Republic of China (the Anti-Monopoly Law) list the prohibitedhorizontal monopoly agreement and vertical monopoly agreement. But thereis a lack of a specific definition of the monopoly agreement. Moreover, theProvisions of the Supreme People’s Court on Several Issues concerning theApplication of Law in the Trial of Civil Dispute Cases Arising fromMonopolistic Conduct promulgated in2012fails to demonstrate the verticalmonopolistic conduct, though it makes some regulations on the burden ofproof of the horizontal monopolistic conduct.Therefore, to perfect the Anti-Monopoly Law by specifying thecomponents of the monopoly agreement and burden of proof as well ascompensation for a loss is the inevitable course to resolve such lawsuits,stimulate the competitive mechanism of the market-oriented economy, andeventually safeguard social fairness and justice.