Johnson & Johnson’s monopoly dispute
Johnson & Johnson has won its vertical price fixing dispute
11 July 2012
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Johnson & Johnson
vertical price fixing
In March 2008, Johnson & Johnson found
Rainbow Medical Equipment & Supplies, which had been
distributing J&J’s suturing products for 15
years under annually-renewed distribution agreements, was
selling the products below the minimum contracted price and
winning business outside its allocated region of Beijing.
J&J terminated Rainbow’s distribution rights
in July that year and ceased delivery in August 2008.
subsequently filed a lawsuit alleging that J&J engaged in
resale price maintenance, violating Article 14 of the
PRC Anti-monopoly Law (中华人民共和国反垄断法),
which prohibits setting a minimum price and claimed damages of
Rmb14.4 million ($2.3 million).
Price maintenance is just one type
of restriction placed on distributors. It is common in
manufacturer and distributor...
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