On The Anti-monopoly Law Of Vertical Territorial Restriction

The promulgation and implementation of new Anti-monopoly Law symbolizes that the frame of our competition legal system has come into being. As an important kind of Vertical Restriction, Vertical Territorial Restriction (VTR) is far from enough and some similar notions and misleading parlances shall be clarified first. VTR is a conception better revealing the essence of this kind of Vertical Restriction.Through VTR, the supplier can improve the salesman's incentive to promote the goods, prevent a salesman from free-riding the other salesman's efforts and enhance the inter-band competition of the goods. But in some circumstances, VTR may also partition the market and undermine the competition. So careful analysis and study shall be conducted before determine the legitimacy of VTR.In short, some kind of VTR shall be forbidden in any cases, but most of VTR can be allowed as long as the parties concerned is not dominant in the market or the market is open for any potential competitor or the customer has alternative choices for the specific goods concerned.China's new Anti-monopoly Law mainly followed the European Community (EC) style, and some available provisions can be readily adopted in China. Hence, it is necessary to combine the concrete situation and problems to further our legal system's improvement.