12 June, 2014
On May 29, 2014, China’s National Development and Reform Commission (NDRC) announced that its investigation into the eyeglass industry found that some major manufacturers had restricted resale prices, and it therefore instructed local pricing departments in Beijing, Shanghai and Guangdong to impose total fines totaling more than RMB 19m (USD 3m) under the Anti-Monopoly Law. The conduct at issue involved sales contracts requesting distributors to sell products strictly at “suggested retail prices,” or forcing “buy three get one free” (for contact lenses) promotional activity throughout the year. Companies that voluntarily reported to the NDRC and provided important evidence were exempted from any fines. Companies that offered satisfactory cooperation with the investigation and undertook voluntary correction were fined 1 percent of sales revenue of the previous year’s sales. The harshest penalty—a fine of 2 percent of sales revenue for the previous year’s sales—was imposed on companies that undertook voluntary correction, but also could exercise power in controlling prices or did not provide satisfactory cooperation.
The NDRC’s announcement is available here.
For further information, please contact:
David Goldstein, Partner, Orrick
Douglas Lahnborg, Partner, Orrick
Philippe Rincazaux, Partner, Orrick
Howard M. Ullman, Orrick
Homegrown Competition & Antitrust Law Firms in China