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Vertical Agreements China

Have decisions or guidelines on vertical restrictions been made in any way in the treatment of different types of online sales channels? In particular, have there been developments with respect to “platform bans”? The anti-Monopoly Bureau, as part of the SAMR, conducts antitrust investigations into vertical agreements and dominant corporate behavior. In particular, the division is responsible for reviewing the Monopoly Agreement for Vertical Contract Investigations and the Abusive Behavioural Investigations Division is responsible for investigating abuses of dominance. As a general rule, the Agreements Act and competition rules contained in other laws or regulations do not require enforcement authorities to take market share into account in assessing the legality of individual restrictions. Thus, section 14 of the Agreements Act prohibits the maintenance of the resale price and the setting of minimum resale prices without affecting market share. In addition, the availability of exemptions for agreements with vertical restrictions under Article 15 covers, among other things, economic factors such as improved product quality, cost reduction and efficiency gains, and requires that agreements not significantly restrict competition in the market in question. Again, market share is not one of these factors. The draft provisions on monopoly agreements specify the application of prohibitions and exemptions under Sections 14 and 15 for MPRs and sets market thresholds (“safe haven”) for presumed exceptions. If each company in a vertical agreement has no more than 25% market share in the relevant market and the agreement does not contain a regime, unless it is proven to prevent or restrict competition, the agreement is deemed to be in accordance with Article 15 standards and is therefore exempt from the prohibition of Article 14. 2.15 Have the enforcement authorities adopted formal guidelines for vertical agreements? 4.1 Please describe and comment on anything in your jurisdiction (or not covered above) with respect to vertical agreements and dominant companies.

If, in a vertical agreement, the company has a market share of 25% or more, it is likely that the vertical restriction will have a negative effect on competition. More importantly, vertical moderation could be considered abusive behaviour if the company has a market share of more than 50%. What is the test to determine whether a vertical restriction is subject to cartel and abuse legislation in your jurisdiction? Has the Vertical Restrictions Jurisdiction Act been applied extraterritorially? Has it been applied in a purely internet context and, if so, what factors were deemed relevant in the jurisdictional review? Is there a category exemption or a safe haven that gives businesses certainty of the legality of vertical restrictions under certain conditions? If so, please explain how this category or safe port exemption works.