October 2013

Authored by Zhan Hao (zhanhao@anjielaw.com)      
 

On August 1 2013, Shanghai People’s High Court (the Court) handed down judgment on the first private antitrust action involving vertical agreements under the minimum resale price maintenance (RPM) clause of China’s Anti-monopoly Law (AML). The Court rescinded the judgment of the first instance court and ordered the US-headquartered health care giant Johnson & Johnson Medical (China) Ltd. and its Shanghai branch (collectively J&J) to pay their Beijing-based former distributor Rainbow Medical Equipment & Supply Co. (Rainbow) RMB 530,000.

This judicial decision was made against the backdrop that the recent high-profile luxury liquors case and baby formula case handled by antitrust implementing agencies of China have demonstrated a new trend of striking both horizontal and vertical monopolies, but the agencies used to invest much more efforts in investigating horizontal monopolies. The Court’s judgment marks the first official deliberation of the Chinese judicial bodies over vertical monopoly agreements. Meanwhile, the judgment has also helped to mitigate the lack of transparency of how to deal with vertical monopoly agreements by the government bodies, as the ruling has clarified the Court’s attitudes towards vertical monopolies, in particular vertical price agreements, and the analytical approach. In this sense, the judgment is of great importance.

Continue Reading Chinese Court’s Roadmap on Vertical Monopoly Analysis: Some Comments on the Final Judgment on Rainbow vs. Johnson & Johnson Case

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

One of the questions in China is whether an insurer should go to arbitration or litigation in subrogation cases.

1. The contradiction between bulks of insurance disputes and less efficient resolution channels

China is facing an increasing number of insurance disputes in respect of all business lines such as construction insurance, credit insurance, marine insurance, product liability insurance, car insurance, D&O liability insurance, environment protection insurance, investment-linked insurance, and life insurance. According to a speech of the Assistant Chief Justice of the PRC Supreme People’s Court, 14,465 insurance litigations were formally accepted by courts in 2005, and in 2010, the number of cases accepted reached 59,747 cases. Some legal experts have estimated that the number of insurance litigations in 2012 is around 1.5 times of that in 2010. Insurance disputes frequently arise from disagreements on the scope of clauses limiting or excluding coverage (“excluding clauses”), the obligation of the insurer to clearly explain the excluding clauses to the applicant, and the disclosure obligation of the applicant and insured.

The biggest proportion of insurance disputes belongs to automobile insurance disputes. Continue Reading To Go to Arbitration or Litigation in Subrogation Cases?

Authored by Michael Gu (michaelgu@anjielaw.com)

Late June of this year, it was reported that the National Development and Reform Commission (“NDRC”) had been conducting antitrust probes against several major baby formula brands, including both foreign and domestic brands such as Mead Johnson, Dumex, Wyeth, Abbotts, Friesland Campina, Biostime, and Beingmate, for suspected price monopoly behavior. Shortly after that, NDRC confirmed that the investigations were underway, which immediately attracted extensive attention. In response to the NDRC’s investigation, the baby formula manufacturers have, one after another, taken rectification steps, such as cutting formula prices directly or indirectly. At the beginning of August, NDRC closed their investigations into the manufacturers. According to the NDRC news release, six of the nine investigated brands were fined various amounts while the other three did not receive administrative penalties.Continue Reading Chinese Antitrust Agency Imposed Record Fines on Baby Formula Brands – An Analysis on the Application of the Leniency Program under the PRC Anti-Monopoly Law