Can Consumers Get Civil Compensation through an Antitrust Litigation Pursuant to an Antitrust Enforcement Decision in China？
——Tian Junwei v. Abbott, a Litigation after NDRC Infant Formula RPM Decision
1.1. NDRC’s Decision and Fine against Abbott on its RPM of Infant Formula
In 2013, the National Development and Reform Commission (“NDRC”) carried out a Retail Price Maintenance (“RPM”) antitrust investigation against several infant formula suppliers, including Abbott Trading (Shanghai) Co., Ltd. (“Abbott”).
On September 22th, 2013, NDRC made an administrative penalty decision (NDRCPS  No.4) which determined that “Abbott violated item 1 of Article 14 of Anti-monopoly Law (“AML”) by fixing the resale price of infant formula to a third party by means of contract, performance review, price control and rebate etc.” The NDRC found that the RPM of Abbott “had eliminated and restricted competition, harmed consumer interests and public interests and Abbott failed to prove its practices are in compliance with exemptions under Article 15 of the AML. Abbott should be fined in accordance with the law.” As stated in its administrative penalty decision, NDRC imposed a fine of 3% of the previous year’s sales volume of Abbott, totaling RMB 77.34 million. 
During the investigation, Abbott admitted its RPM of infant formula had violated the AML.
1.2. Tian Junwei sued Abbott on the basis of NDRC’s Administrative Penalty Decision
On February 7th, 2013, Tian Junwei bought a case of infant formula in a store of Beijing Carrefour (“Carrefour”) for RMB 261. On June 9th, 2013, during the NDRC antitrust investigation, Abbott told a National Daily Business journalist that Abbott would reduce the price of its main products between 4% and 12%.
On December 16th, 2013, after NDRC issued the administrative penalty decision against Abbott, Tian Junwei brought an antitrust litigation to Beijing Intellectual Property Court against Abbott and Carrefour. Tian Junwei alleged that Abbott, together with Carrefour, had harmed his interests as a consumer by forcing him to accept higher price of Abbott’s infant formula through RPM. Tian Junwei asked for a compensation of RMB 10.44, which equals 4% of RMB 261, the price of the infant formula Tian bought from Carrefour. Tian Junwei also asked for RMB 3,000 to cover the reasonable costs of activities related to the defense of his rights.
2. The Court Rejected all Claims of the Plaintiff
Beijing Intellectual Property Court held that the plaintiff shall bear the burden to prove the following:
The existence of a monopoly agreement of RPM;
The above-mentioned agreement had the effect of restricting competition; and
The loss of plaintiff and causation between the loss and the monopoly agreement.
2.1. The Plaintiff Failed to Prove the Existence of a RPM Agreement
As stated in the administrative penalty decision, NDRC had determined that Abbott had conducted a vertical agreement aimed at fixing the resale price of infant formula to a third party with its downstream distributors, and the agreement had the effect of eliminating and restricting competition in the market.
According to Article 114 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the PRC, “the matters recorded in the documents which are formulated by a State authority or other organization with social management functions according to law within their scope of functions shall be presumed to be true, except as otherwise overthrown by sufficient contrary evidence.”
The Court presumed the matters recorded in the NDRC’s Administrative Penalty Decision were true. However, the Court held that since the administrative penalty decision didn’t reveal all the evidence NDRC acquired in the investigation, and the penalty was only imposed on the upstream undertakings, not on the downstream distributors, it could not reach a conclusion that there existed an RPM agreement between Abbott and Carrefour. This is despite the 2013 Contract and its Annexes - signed and provided by Abbott and Carrefour – listing the infant formula-in-suit in the relevant Annex with a recommended price is RMB 251.
However, the Court found that both NDRC’s Administrative Penalty Decision and the Contract and its Annexes cannot prove the following facts:
There was RPM in the Contract and its Annexes;
Although there was a recommended resale price of RMB 251, there is no evidence to show it was binding. Indeed, the actual resale price of the infant formula is RMB 261.
Abbott alleged that NDRC didn’t examine the contract between Abbott and Carrefour when it made the administrative penalty decision.
In accordance to the above, the Court held that the current evidence cannot prove there was a RPM agreement between Abbott and Carrefour.
2.2. The Plaintiff Failed to Prove the Causation between the Loss and the Monopoly Agreement
The court held that although NDRC had determined Abbott had implemented RPM, and such practices had the effect of eliminating and restricting competition, Tian Junwei still bore the burden to prove causation between his loss and the monopoly agreement.
Abbott alleged that lowering the price during the NDRC investigation was an independent business decision unrelated to the investigation. There was no link between the pricing of Abbott and the investigation of NDRC. Since Tian Junwei failed to prove the causation between his loss and the monopoly agreement, the court held that it cannot conclude that the loss was caused by Abbott’s monopolistic practices.
The Beijing Intellectual Property Court thus rejected all claims of the plaintiff. Tian Junwei has appealed to the Beijing Higher People’s Court, and the case is pending.
3.1. The Burden of Proof is High for Plaintiff
In this case, the Court confirmed the validity of NDRC’s administrative penalty decision. The Court held that if there is no evidence to the contrary, the court should presume that the matters recorded in the administrative penalty decision are true. However, due the relatively limited information about the NDRC decision in the public realm, the Court did not determine the Contract between Abbott and Carrefour constituted a RPM agreement based on the NDRC’s administrative penalty decision, and Abbott’s admission. As such, the plaintiff had to provide a prima facie case from ground zero.
Article 64 of the Civil Procedure Law provides, “a people's court shall investigate and collect evidence, where the evidence is unable to be collected by a party concerned and the agent ad litem thereof themselves for reasons beyond their control.”
Article 94 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law further provides, “the evidence mentioned in Article 64 of the Civil Procedure Law includes: (1) evidence that is kept by the relevant national departments and the party concerned and the agent ad litem thereof have no right to consult or take possession of…
In this case, the plaintiff has the right to file an application to ask the Court to investigate and collect evidence from NDRC that is unable to be collected by itself, and did not do so. However, technically speaking, there is a substantial possibility that NDRC did not collect all the agreements between Abbott and its downstream distributors. Thus, even if such an application were made the most likely result is that the plaintiff will not be able to get sufficient expected evidence through such application.
Due to the asymmetry of information obtained by the plaintiff and the defendant, plaintiffs in antitrust litigations always have great difficulties in collecting evidence. In our view, in order to relieve the high burden of proof of the plaintiff in an antitrust litigation and encourage the development of antitrust civil litigation, the Court should determine that the plaintiff satisfied its burden of proof, as long as the anti-monopoly enforcement authority has determined the monopolistic practice of the defendant violate the AML, and the defendant has already admitted its violation during the investigation. In our view, the burden of proof should thus be shifted to the defendant.
3.2. Indirect Purchaser can get Compensation in an Antitrust Litigation
However, the Court did hold that Tian Junwei, as an indirect purchaser, has the right to bring an antitrust litigation to the court.
The court held that taking the purpose of the AML into consideration, and since the qualification to litigate of an indirect purchaser hasn’t been removed by either the AML or the AML Judicial Interpretation, an indirect purchaser has the right to ask for compensation from the undertakings who have implemented monopolistic conduct through an antitrust civil litigation.
Tian Junwei v. Abbott is a case in which the plaintiff brought an antitrust civil litigation to the court pursuant to an administrative penalty decision made by an anti-monopoly enforcement authority. Although the plaintiff failed in the first trial, we expect the Beijing Higher People’s Court could be more aggressive in the second trial. Whatever the outcome could be, Tian Junwei v. Abbott will be an important test water litigation in the development of antitrust private litigation in China.