Interim Provisions On The Prohibition Of Monopoly Agreements

In accordance with the undertaking programme, the company may, under the alleged monopoly agreement, request the suspension of the investigation and commit to take specific measures within the time allowed by the COMPETITION authorities of the PRC to eliminate the influence of the conduct. Article 55 of the AmL states that “this law does not apply to the conduct of companies in the exercise of intellectual property rights, in accordance with the provisions of the laws or administrative provisions relating to intellectual property rights; However, this law applies to the behaviour of companies that eliminate or restrict competition in the marketplace by abusing their intellectual property rights. On July 1, 2019, shortly after the publication of this euSPP decision, SAMR adopted the interim regulation prohibiting monopoly agreements (the “Monopoly Agreement Regulation”). The monopoly agreement provides that the agreements specifically listed in Article 14 of the AmL, i.e. agreements that set resale prices or limit the lowest resale prices, are in themselves considered illegal. Given that the PPU decision is now more in force and there is little evidence of the types of evidence deemed sufficient to rebut the presumption of illegality of PMR agreements, it is recommended that companies be very careful before imposing price requirements on their distributors or retailers. At the Chongqing AMR hearing, the companies and individuals concerned argued that the halting of production by certain members was a response to the implementation of the government`s policy against “off peak” production and the “environmental protection policy”, which must be considered as an exception under Article 15 of the Anti-Monopoly Act. However, Chongqing AMR rejected this argument on the grounds that there were no objective factors such as economic downturns during the implementation of the monopoly, nor could it achieve the objective of environmental protection. Chongqing AMR therefore came to the conclusion that the monopoly agreement reached by the companies and individuals concerned could not qualify for the exemption under Article 15 of the Anti-Monopoly Act. Published in November 2017, the Guide to The Pricing Behaviour of Companies Marketing Drugs in Active Substances and Products (“API Guide”) governs antitrust activities related to Pharmaceutical Active Ingredients (IPAs). According to the IPA guideline, the conclusion of one of the following horizontal monopoly price agreements is prohibited by the API`s competitors under the AML: as shown in Table 2 below, between 1 January 2019 and 31 December 2019, a total of 12 cases of monopoly agreement and seven cases of abuse were published , 5 more than in 2018, when 11 cases of monopoly and four cases of abuse were recorded.

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