antitrust pitfalls for manufacturer-imposed...
TRANSCRIPT
Antitrust Pitfalls for
Manufacturer-Imposed Requirements Structuring RPM Provisions and Overcoming Antitrust Risk in Territory and Customer Restrictions
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
TUESDAY, APRIL 16, 2013
Presenting a live 90-minute webinar with interactive Q&A
Logan M. Breed, Partner, Hogan Lovells, Washington, D.C.
James M. Burns, Member, Dickinson Wright, Washington, D.C.
Adrian Emch, Partner, Hogan Lovells International, Beijing, China
Sound Quality
If you are listening via your computer speakers, please note that the quality of
your sound will vary depending on the speed and quality of your internet
connection.
If the sound quality is not satisfactory and you are listening via your computer
speakers, you may listen via the phone: dial 1-866-819-0113 and enter your PIN
when prompted. Otherwise, please send us a chat or e-mail
[email protected] immediately so we can address the problem.
If you dialed in and have any difficulties during the call, press *0 for assistance.
Viewing Quality
To maximize your screen, press the F11 key on your keyboard. To exit full screen,
press the F11 key again.
For CLE purposes, please let us know how many people are listening at your
location by completing each of the following steps:
• In the chat box, type (1) your company name and (2) the number of
attendees at your location
• Click the word balloon button to send
FOR LIVE EVENT ONLY
Resale Price Maintenance:
Federal and State Overview
James M. Burns, Esq.
1875 I Street, N.W., Suite 1200
Washington, DC 20006
(202) 659-6945
Wikipedia:
Resale price maintenance (RPM) is the practice whereby a
manufacturer and its distributors agree that the distributors will sell the
manufacturer's product at or above a price floor (minimum resale price
maintenance) or at or below a price ceiling (maximum resale price
maintenance). If a reseller refuses to comply with such an agreement,
the manufacturer may stop doing business with it.
What is RPM?
- 5 -
1911 In Dr. Miles Medical Co. v. John D. Park and Sons, 220 U.S. 373 (1911), the United States
Supreme Court held that a minimum resale price maintenance agreement violated Section
1 of the Sherman Act. Subsequent decisions characterized Dr. Miles as holding that
minimum resale price maintenance is unlawful per se - that is, without regard to its impact
on the marketplace or consumers – and per se treatment was extended to maximum resale
price maintenance in Albrecht v. Herald Co. 390 US 145 (1968).
2007 In Leegin Creative Leather Products v. PSKS, 551 U.S. 877 (2007), the United States
Supreme Court overruled Dr. Miles, holding that minimum resale price maintenance would
no longer be subject to per se condemnation (per se treatment of maximum resale price
maintenance had previously been overturned in State Oil Co. v. Khan, 522 US 3 (1997)). In
reaching this result, the Court noted that, in some circumstances, vertically imposed RPM
can be procompetitive, not anticompetitive.
Federal Law
- 6 -
Potential Procompetitive Effects of RPM identified by the Court:
1. Eliminates intrabrand competition, which can encourage
retailers to invest in services or promotional efforts designed
to aid the manufacturer in competing against rival
manufacturers;
2. Prevents “free riding” by retailers not providing customer
service so that retailers compete on service, to the benefit of
consumers; and
3. Increasing interbrand competition by facilitating market
entry of new firms and brands.
Why the change?
- 7 -
In the aftermath of the Leegin decision . . .
The rule of reason has rendered federal challenges to RPM largely
unsuccessful • Jacobs v.Tempur-Pedic Int’l, Inc. 626 F.3d 1327 (11th Cir. 2010) (Affirming dismissal for
failure to allege proper relevant market).
• Vaughn Medical Equip. Repair Service, LLC v. Jordan Reese Supply Co., 2010 WL 3488244
(E.D.La. 8/26/10) (RPM claim dismissed for failure to allege relevant market).
• Rick-Mik Enters. v. Equilon Enters., 532 F.3d 963 (9th Cir. 2008) (claim “failed for
vagueness” under Twombly).
The “Colgate Doctrine” also remains a complete defense to any RPM
challenge, further reducing plaintiff success in federal court • Valuepest.com of Charlotte, Inc. v. Bayer Corp., 561 F.3d 282 (4th Cir. 2009) (Genuine
agency arrangement not subject to challenge based upon absence of agreement between
two independent entities).
- 8 -
Post – Leegin Cases in Federal Court, cont’d
Market Power – the cases that have proceeded past motions practice have
typically required a showing of market power on the part of the manufacturer:
• Toledo Mack Truck Sales & Services, Inc. v. Mack Trucks, Inc. 530 F.3d. 204 (3d Cir. 2008)
• McDonough v. Toys “R” Us, Inc. 2009 WL 2055168 (E.D. Pa. 2009)
• BabyAge. com, Inc. v. Toys “R” Us, Inc., 558 F. Supp. 2d 575 (E.D. Pa. 2008)
However, no reported post-Leegin decision to date has held that an RPM
agreement violates Sherman One under the rule of reason
-- Jury verdict for defendant in Toledo Mack Truck, affirmed on appeal.
Recent Cases – Turik v. Expedia. One of over 30 challenges to online travel company
“best price guarantee” provisions between hotels and OTCs that have now been
consolidated into an MDL proceeding in Dallas.
- 9 -
What about Dual Distribution Arrangements?
Per se or Rule of Reason?
Many manufacturers sell both to resellers and to consumers -
Leegin did.
Does dual distribution transform rule of reason analysis into per se
condemnation? Probably not.
Spahr v. Leegin 2008 US Dist. LEXIS 90079 (E.D. Tenn. 2008)
(applying rule of reason to dual distribution arrangement).
PSKS v. Leegin, 615 F.3d. 413 (5th Cir. 2010) (Leegin on remand;
in dicta).
- 10 -
FTC Activity regarding RPM
2008 Nine West Review: Leegin factors should be used to determine
“when RPM might be subjected to a closer analytical scrutiny”
-- Nine West allowed to resume RPM because of its “modest market
share.” In re NineWest, FTC Docket No. C-3937.
In 2009 the FTC held an RPM Workshop, which was intended “to
explore []how to best distinguish between uses of RPM that benefit
consumers and those that do not.” Unfortunately, no findings or
recommendations were ever issued after the workshop.
- 11 -
United States v. Apple, 12-CV-2826 (S.D. N.Y. 2012)
The “Ebooks” case
In April of 2012 the DOJ filed an action against Apple and five large
publishers alleging they had restrained competition in the sale of electronic
books.
While involving the resale price of ebooks, the DOJ’s claim included the
allegation that the publishers had entered into a horizontal agreement as
well, making the claim materially different than a traditional manufacturer-
imposed RPM agreement.
All publishers have since settled, leaving only Apple as a defendant.
DOJ Activity Regarding RPM
- 12 -
Federal Legislative Efforts
Discount Pricing Consumer Protection Act of 2011 would have trumped
Leegin by adding a sentence to Sherman One stating:
‘‘Any contract, combination, conspiracy or agreement setting a minimum price
below which a product or service cannot be sold by a retailer, wholesaler, or
distributor shall violate this Act.’’
41 State A.G.s wrote to Congress expressing their support of Leegin
repeal, but the legislation failed to be enacted.
New legislation has NOT been introduced this Congress, but Assistant AG
William Baer endorsed Leegin repeal in his confirmation hearing last July,
providing additional support ; on the other hand, new FTC Commissioner
Wright has strongly supported Leegin . . .
- 13 -
State Authority
“Congress intended the federal antitrust
laws to supplement, not displace, state
antitrust remedies. . . and on several prior
occasions, the Court has recognized that the
federal antitrust laws do not pre-empt state
law.” - California v. ARC America Corp., 490 U.S. 93
(1989)
- 15 -
State Court RPM Actions After Leegin
• Early post-Leegin enforcement action by New York, Illinois and
Michigan
• More recent enforcement actions by the California and New York
Attorneys General
• Kansas Steals the Show With O’Brien v. Leegin
- 16 -
In 2008, New York, Illinois and Michigan
challenged office furniture Herman
Miller’s use of RPM; New York v.
Herman Miller, 08-cv-02977 (S.D. N.Y.)
- Complaint alleges Herman Miller coerced
retailers not to discount furniture below suggested
retail price. While the complaint does not expressly
allege per se violations, no attempt to plead a rule
of reason violation is evident in the pleadings (no
allegations about market share, etc.)
Who Cares about Leegin?
We have a State Antitrust Statute to Enforce
- 17 -
Consent Decree quickly accepted by Herman
Miller, only four days after the filing of the
complaint, precluding detailed analysis into
the legal merits of the claims.
Herman Miller agrees to refrain from enforcing its
suggested retail prices and fined $750,000.
Herman Miller Action, cont’d
- 18 -
California:
People v. DermaQuest
• California AG Jerry Brown files complaint on
Feb. 5, 2010, alleging that “DermaQuest has
engaged in vertical price fixing in per se violation
of the Cartwright Act.”
• The DermaQuest agreements provide:
– “Distributor may not resell product in a
price structure that yields a product price
below Dermaquest's Suggested Retail
Price (DSRP)”
– “Reseller may not resell product . . . at
resale below . . . DSRP”
- 19 -
DermaQuest Consent Decree
• Enjoined DermaQuest from
– Entering agreements that bind
distributors “not to sell . . . below a
common standard figure or fixed value”
• Required DermaQuest to send written notice of
the discontinuation of its pricing policies to its
distributors
• Required DermaQuest to pay $70,000 in civil
penalties, plus $50,000 in costs
- 20 -
California: Bioelements Case
• California AG Brown follows up DermaQuest
with People v. Bioelements, Inc., File No.
10011659 (Cal. Super. Ct., Riverside
County, filed Dec. 30, 2010)
• Allegation that Bioelement’s agreements with
distributors and resellers “constitute vertical
price-fixing in per se violation of the
Cartwright Act’” and “unfair competition”
under the California Unfair Competition Law
- 21 -
Bioelements, cont’d
• While initiated under California Attorney General Brown, the Bioelements action was concluded by a Consent Judgment in Jan. 2011 that was approved by Attorney General Kamala Harris
• Despite a change in administration, the Bioelements consent terms mirror those in Dermaquest
• Agreement to permanently refrain from fixing resale prices for its merchandise
• Agreement to inform distributors and retailers that the existing contract provision is void and that Bioelements would not try to enforce it
• Bioelements required to pay $15,000 in civil penalties and $36,000 for
the State’s attorney fees
- 22 -
New York: People v. Tempur-Pedic Int’l
• In 2010, the NY Attorney General brought an action contending
that a contractual prohibition on discounting contained in
Tempur-Pedic’s “Retail Partner Obligations and Advertising
Policies” agreement violated NY General Business Law §369-a,
which provides:
• “Any contract provision that purports to restrain a vendee of a
commodity from reselling such commodity at less than the price
stipulated by the vendor or producer shall not be enforceable at
law.”
• The action sought to enjoin Tempur-Pedic from enforcing its “anti-
discounting policy” and restitution to consumers
- 23 -
New York v. Tempur-Pedic
• People v. Tempur-Pedic International Inc. 30 Misc. 3d
986, 916 N.Y.S. 2d 900 (2011); aff’d 95 A.D. 3d 539, 944
N.Y.S. 2d 518 (2012)
• Section 369-a makes RPM agreements unenforceable, but not
actionable
─ “there is nothing in the text to declare those contract
provisions to be illegal or unlawful; rather the statute
provides that such provisions are simply unenforceable in
the courts of this state”
• The court further held that the only “agreement” between the
parties applied to advertised prices, not prices themselves
– “Advertising agreements cannot be the subject of a vertical
RPM claim, because they do not restrain resale prices, but
merely restrict advertising”
- 24 -
Kansas: O’Brien v. Leegin Creative Leather Products
• Same basic facts as in the Leegin federal case heard by the U.S. Supreme
Court
• A challenge to Leegin’s retailer agreement, which
required that a retailer "[s]ell Brighton products for
the suggested price every day, 365 days a year.“
• At the trial court level, the court held that the rule of reason applied to the
conduct
- 25 -
Kansas Supreme Court Rejects Leegin
• Kansas antitrust statute does not mention “reasonableness” or the rule of
reason in proscribing anticompetitive conduct
• The plain language of the Kansas Antitrust Act prohibits all arrangements,
contracts, agreements, trusts or combinations . . . designed, or which tend
to advance, reduce or control, the price or the cost to the producer or to the
consumer of any such products or articles”
• Rejects deference to federal cases
─ “federal precedents interpreting . . . federal statutes have little or no
precedential weight when the task is interpretation and application of a
clear and dissimilar Kansas statute”
• Holds that Leegin’s conduct is per se unlawful under Kansas law
- 26 -
What Do the State Court RPM Cases Seem to Suggest?
• The likelihood of plaintiff success varies considerably by state, with those
states that have a history of challenging RPM agreements in the past and/or
those that do not strictly apply federal precedent presenting the greatest risk
• Actions by State Attorneys General probably create heightened risk,
although the legal principles are likely to be the same
• Challenges are almost always going to be to minimum RPM agreements;
challenges to “maximum RPM,” though still possible under some state laws,
are not being brought
• The Colgate Doctrine remains the best defense to RPM claims
- 27 -
Maryland Leegin Repeal
Maryland Commercial Law Code Section 11-204(b)
“A contract, combination or conspiracy that establishes a
minimum price below which a retailer, wholesaler or
distributor may not sell a commodity or service is an
unreasonable restraint of trade.” - 29 -
Pennsylvania Legislation
Senate Bill 848, introduced last month, would prohibit
“Contracts, combinations or conspiracies to establish a
minimum price below which a retailer, wholesaler or
distributor may not sell a commodity or service.”
- 30 -
Kansas Legislation
SB 124, an extensive revision of the Kansas Antitrust Act, was passed in
different forms by the Kansas Senate and House. Each version includes a
“reasonableness” component to permit rule of reason treatment for RPM. The
bill was subsequently harmonized in conference committee and passed. It
now awaits the Governor’s signature. - 31 -
States Likely to Present the
Greatest Legal Risk under
State Antitrust Law
Maryland (unlawful by statute)
Kansas (unlawful by Kansas Supreme Court decision – at least for the moment)
North Carolina (State AG pronouncement that RPM remains per se unlawful)
Alabama, California, Connecticut, Mississippi, Montana, Nevada, New Hampshire,
Ohio, South Carolina, Texas and West Virginia - 32 -
April 16, 2013
Vertical Non-Price Restraints Logan Breed, Partner Hogan Lovells 202.637.6407 [email protected]
www.hoganlovells.com
Overview
• Vertical non-price restraints generally subject to rule
of reason treatment
• Several common types
– Territorial and customer restrictions
– Exclusive distributorships
– Location clauses and areas of primary responsibility
– Minimum Advertised Price (MAP) policies
– Dual distribution
34
www.hoganlovells.com
Standard for Vertical Non-Price Restrictions
• Vertical non-price restraints frequently increase overall competition by promoting interbrand competition more than they reduce intrabrand competition
• Theory predicts that a vertical non-price restraint can affect consumer welfare only if the supplier has market power, i.e., if the supplier can price above marginal cost – Some courts have accepted this theoretical claim and
have held that a vertical non-price restriction is reasonable, and thus legal, if the supplier has no market power
35
www.hoganlovells.com
Standard for Vertical Non-Price Restrictions
• Procompetitive justifications:
– May enable distributors to strengthen their organizations
and compete more effectively with distributors of
competitive products
– May lower distribution costs by enabling each distributor
to make the investment in its distributorship necessary to
obtain economies of scale
– May lead to improved product quality, service and safety
by fostering close, long-term relationships between
suppliers and distributors
– May facilitate entry of a new producer by enabling
distributors to recover initial market development costs
36
www.hoganlovells.com
Standard for Vertical Non-Price Restrictions
• Potential anticompetitive effects:
– May eliminate or unnecessarily reduce intrabrand
competition
– May allow the prices of other brands to rise, thereby
reducing interbrand competition
– May facilitate collusion among competitors
37
www.hoganlovells.com
Territorial and Customer Restrictions
• Dealer is restricted with respect to the territory in
which, or the customers to whom, it may sell
• Relevant factors in rule of reason analysis include:
– the purpose of the restriction
– the effects on inter- and intrabrand competition
– the manufacturer’s market share
– any offsetting procompetitive benefits of the restraint
– whether there is a less-restrictive means to accomplish
the procompetitive benefit
38
www.hoganlovells.com
Exclusive Distributorships
• Provides dealer with the right to be the exclusive
outlet for supplier’s product in a given geographic
area
• They are evaluated under the rule of reason and are
“presumptively legal.”
– Republic Tobacco Co. v. North Atlantic Trading Co., 381
F.3d 717, 736 (7th Cir. 2004)
39
www.hoganlovells.com
Exclusive Distributorships
• Relevant factors include whether:
– the dealer or manufacturer has market power
– the geographic scope is unreasonably broad
– the duration is excessive
– the distributor has exclusive appointments from other suppliers
– the exclusive dealer is given “veto” power over new dealers
– the supplier and exclusive dealer are in substantial competition
resulting in a horizontal allocation of markets
– there is a product shortage or a shortage of alternative sources
of supply
– the arrangement is part of a broader restrictive scheme
– the product is patented
40
www.hoganlovells.com
Location Clauses & Areas of Primary
Responsibility
• Location clauses restrict the dealer to selling the supplier’s products from a designated location
• “Area of primary responsibility” clauses provide that each dealer must sell the supplier’s products primarily (but not necessarily entirely) within a specified geographic area – In some cases, if the dealer fulfills its sales obligations (in
quotas or dollar terms) in the primary region, it may sell products outside the primary region
• Generally upheld under rule of reason – They might limit, but will not necessarily eliminate, intrabrand
competition; thus, there is less cause to find these less restrictive agreements unreasonable restraints of trade
41
www.hoganlovells.com
MAP Policies
• Under a MAP program, the manufacturer warns a
dealer not to advertise the product below a specified
price, but the dealer remains free to charge any
price it wants once a customer walks in the door
– Suppliers sometimes enforce a minimum advertised price
by refusing to share the cost of cooperative advertising
with dealers who advertise at some lower price
– Suppliers sometimes enforce by terminating dealers who
violate the policy
42
www.hoganlovells.com
MAP Policies
• Not subject to Sherman Act § 1 if unilateral
• Subject to rule of reason if there is an agreement
• Factors include – the manufacturer’s justification for the advertising policy
– the manufacturer’s market share and market power with regards to each product to which the advertising program is applied
– the importance of price advertising to competition in the sale of such products
– the ability of dealers to convey price information to consumers by other means
• Internet MAP is perhaps the most difficult to assess
43
www.hoganlovells.com
MAP Policies – Federal Enforcement
• FTC Guides for Advertising Allowances
– Manufacturer’s decision to condition availability of cooperative
advertising funds on the dealer’s use of the suggested retail
price in advertisements paid for through the cooperative
advertising funds should be analyzed under the rule of reason
and deemed illegal only where it is shown to injure competition
• FTC consent orders with recorded music companies
– FTC alleged the agreements were implemented with the
anticompetitive intent to limit retail price competition and to
stabilize the retail prices in this industry
– By defining “advertising” broadly enough to include all in-store
displays and signs, the policies effectively precluded retailers
from communicating prices below MAP to their customers
44
www.hoganlovells.com
MAP Policies – State Enforcement
• MAP is an enforcement priority for NAAG, which
regards minimum advertised price co-op advertising
programs as per se illegal
– Some state Attorneys General will challenge if MAP is
used to support an RPM policy
– Herman Miller involved MAP
45
www.hoganlovells.com
MAP Policies – Best Practices
• Ensure that cooperative advertising programs do not restrict the price actually charged by dealers to their customers
• Do not impose excessive penalties for minor or isolated violations
• Limit the definition of “advertising” so cooperative advertising programs do not prevent in-store promotion of discounted prices
• Ensure cooperative advertising programs do not prevent dealers from advertising discounted prices in advertising not paid for by the manufacturer
• Do not provide cooperative advertising contributions that exceed retailers’ actual promotional costs
46
www.hoganlovells.com
Dual Distribution Arrangements
• A dual distribution system exists where a supplier markets its products both through its own outlets and through independent dealers
• The difficult issue with these agreements is how to characterize them – Is the agreement a horizontal agreement between competitors
because the supplier’s own outlets compete with the independent dealers? Or is the agreement a vertical agreement between a supplier and a dealer?
• The trend is to consider these restraints to be vertical agreements and therefore subject to the rule of reason – Some courts simply apply the rule of reason in analyzing these
arrangements without characterizing the restraints as vertical or horizontal
47
www.hoganlovells.com
Antitrust regimes in Asia
• Many new competition laws around the world in the past decade, including in Asia – many antitrust regimes follow EU law
• In Asia, some are established regimes – eg, Japan or Korea
• Others are more recent – Singapore (2004) China (2008), India (2002+), Malaysia
(2012) and Hong Kong (2013/4)
• Antitrust rules also exist in smaller jurisdictions
50
www.hoganlovells.com
Antitrust regime in Malaysia
• Competition Act – enacted in June 2010
– effective from January 2012
• Other pre-existing statutes with antitrust
provisions – Communications and Multimedia Act 1998
– Energy Commission Act 2001
• Malaysian Competition Commission (MyCC)
is enforcement body
51
www.hoganlovells.com
Antitrust regime in Singapore
• Competition Act enacted in October 2004, and
effective from January 2005
• Competition Commission of Singapore is main
enforcement body – Ministry of Trade and Industry, with some powers
– Sectoral regulators with antitrust oversight, such as MDA
• Variety of regulations, guidelines and case
decisions on authority website
52
www.hoganlovells.com
Antitrust regime in Taiwan
• Fair Trade Act enacted in 1991 – effective from February 1992
– amended five times, eg, in 2011 adoption of leniency
program
• Combination of antitrust and unfair competition law
• Taiwanese Fair Trade Commission is main enforcer
53
www.hoganlovells.com
Antitrust regime in Hong Kong
• Competition Ordinance – passed in June 2012
– staggered effectiveness, likely to be completed in 2014
• Competition Commission and Tribunal being set up
• Guidance to be issued after bodies are operational
• Parallel jurisdiction for media sectoral regulator
54
www.hoganlovells.com
Antitrust regime in China
• AML enacted in 2007, effective from August 2008
• Prior to AML – and now in parallel – other statutes have antitrust provisions – in particular, Anti-Unfair Competition Law and Price Law
• Three enforcement agencies, with different structures and priorities – all of them issued AML implementing rules
• NDRC in charge of enforcement against RPM
55
www.hoganlovells.com
RPM in Malaysia
• Competition Act 2010 explicitly mentions 'vertical
agreements' as potentially anti-competitive
– if object or effect is to significantly restrict competition
• MyCC guidelines specifically list fixed and minimum
price RPM – but not clear if per se offense
– "In general, the MyCC will take a strong stance against
minimum RPM and find it anti-competitive"
– not certain whether 25% safe harbor applies to RPM
– possibly, MyCC may challenge maximum and recommended
RPM
57
www.hoganlovells.com
RPM in Malaysia
• In theory, RPM could be justified for pro-
competitive effects
• In February 2013, MyCC rejects Nestlé
application for exemption of scheme with RPM
clause
58
www.hoganlovells.com
RPM in Singapore
• Vertical restraints including RPM are
generally excluded from the application of
the Competition Act
• But Ministry of Trade and Industry may
order that vertical agreement be subject
to competition law if anti-competitive
outweighs pro-competitive effect
• Applicable to RPM
59
www.hoganlovells.com
RPM in Taiwan
• RPM in principle per se unlawful under Fair Trade Act – no distinction between minimum, maximum and range of
resale prices
• Recent fines for RPM in leisure sector
• TFTC reportedly submitted proposal to legislator to
move RPM to 'rule of reason' analysis
60
www.hoganlovells.com
RPM in Hong Kong
• 'First conduct rule' focused on cartel-like
agreements
• Vertical agreements are subject to
'warning notice' system
– direct prosecution by Competition Commission
not possible
– only upon non-compliance or repetition
61
www.hoganlovells.com
RPM in China
• Fixing resale prices is prohibited
• Recommended and maximum resale prices not addressed in law
• RPM may be exempted based on non-exhaustive list of justifications
• In short, RPM seems subject to 'rule of reason' analysis
63
www.hoganlovells.com
RPM in China (2)
• Johnson & Johnson case in 2012 indicates
difficulties for plaintiffs to challenge RPM
• Shanghai court requires plaintiffs to prove that RPM
practice actually harms competition
• Analysis of anti-competitive effects should include
– examination of market shares
– level of competition in upstream and downstream markets
– RPM's impact on supply quantity and price
64
www.hoganlovells.com
RPM in China (3)
• NDRC local offices fine Maotai and Wuliangye RMB
247 / 202 million (around USD 40 / 32 million)
– combined, new record for antitrust violation in China
• Wuliangye's RPM policy held to be illegal – intra-brand price competition eliminated
– inter-brand competition restricted ('bad example')
– consumer interests harmed, due to strong market position
and low degree of substitutability
• Difficult to interpret, but case shows risks
65
www.hoganlovells.com 74
For any questions, please contact:
Adrian Emch
Tel: +86 10 6582 9510
Email: [email protected]
www.hoganlovells.com
Hogan Lovells has offices in:
Abu Dhabi
Alicante
Amsterdam
Baltimore
Beijing
Berlin
Brussels
Budapest*
Caracas
Colorado Springs
Denver
Dubai
Dusseldorf
Frankfurt
Hamburg
Hanoi
Ho Chi Minh City
Hong Kong
Houston
Jakarta*
Jeddah*
London
Los Angeles
Madrid
Miami
Milan
Moscow
Munich
New York
Northern Virginia
Paris
Philadelphia
Prague
Riyadh*
Rome
San Francisco
Shanghai
Silicon Valley
Singapore
Tokyo
Ulaanbaatar
Warsaw
Washington DC
Zagreb*
"Hogan Lovells" or the "firm" is an international legal practice that includes Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses.
The word "partner" is used to describe a partner or member of Hogan Lovells International LLP, Hogan Lovells US LLP or any of their affiliated entities or any employee or consultant with equivalent standing. Certain individuals, who are
designated as partners, but who are not members of Hogan Lovells International LLP, do not hold qualifications equivalent to members.
For more information about Hogan Lovells, the partners and their qualifications, see www.hoganlovells.com.
Where case studies are included, results achieved do not guarantee similar outcomes for other clients. Attorney Advertising.
© Hogan Lovells 2012. All rights reserved.
*Associated offices