China’s Top Court Issues List of Typical Anti-Monopoly Cases for 2025
Published 12 September 2025
Xia Yu
On 10 September 2025, the Supreme People’s Court of the People’s Republic of China (“SPC”) released five typical anti-monopoly cases for 2025. The final trials of these cases were made by the SPC. They focus primarily on civil anti-monopoly matters, covering the key issues such as identification of abuse of administrative power to eliminate or restrict competition in the transportation industry (Please see typical case 1 below), determination of trade association-organized monopolistic conduct (Please see typical case 2 below) and presumption and calculation of damages in horizontal monopoly agreements (Please see typical case 4 below) in the building materials industry, establishment of horizontal monopoly agreements and determination of fine ratios in the active pharmaceutical ingredients (API) industry (Please see typical case 3 below), and recognition of concluded and implemented horizontal monopoly agreements in the chemical industry (Please see typical case 5 below).
Typical case 1: Hangzhou Qingmou Co., Ltd. v. Mou Municipal Administrative Examination and Approval Bureau, Mou Municipal Big Data Center, and First-Instance Third Party Jiaomou Smart City Development Co., Ltd. for abuse of administrative power to eliminate or restrict competition, SPC (2023) SPC Zhi Xing Zhong No. 1011 – This case represents the first instance in which the SPC recognized an abuse of administrative power to eliminate or restrict competition, establishing key criteria for identifying such conduct.
Hangzhou Qingmou Co., Ltd. (“Qingmou”), a provider of internet bicycle rental services, brought an administrative lawsuit against Mou Municipal Administrative Examination and Approval Bureau (“MAEA Bureau”) and Mou Municipal Big Data Center (“Big Data Center”). Qingmou alleged that the defendants had unlawfully established and implemented a franchise scheme for shared electric bicycles in the city, constituting an abuse of administrative power to eliminate or restrict competition. Qingmou sought revocation of the challenged administrative act. The first-instance court dismissed Qingmou’s claims. Qingmou appealed.
The SPC, in the second instance, held that the MAEA Bureau and Big Data Center’s act of establishing and granting the franchise for shared electric bicycles to Jiaomou Smart City Development Co., Ltd. constituted an exercise of administrative power that restricted market transactions. The court found this act lacked both legal basis and reasonableness and had the effect of eliminating or restricting competition, thus violating the prohibition against abuse of administrative power under Anti-monopoly Law of the People’s Republic of China (“Anti-Monopoly Law”). As the MAEA Bureau had exceeded its authority in establishing the franchise without legal basis and given insufficient evidence to show that revoking the act would harm national or public interests, the SPC ruled that the challenged administrative act should be revoked. It accordingly reversed the first-instance judgment and revoked the administrative act.
Typical case 2: Mou Provincial Cement Association v. Mou Provincial Administration for Market Regulation, State Administration for Market Regulation, an anti-monopoly administrative penalty and administrative reconsideration case, SPC (2024) SPC Zhi Xing Zhong No. 148, Beijing Intellectual Property Court (2023) Jing 73 Xing Chu No. 6605 – This case establishes that where a trade association plays a decisive or leading role in facilitating the formation or implementation of a monopoly agreement through organizing, convening, leading, planning, manipulating, directing, or initiating such conduct, it shall be deemed a violation of the Anti-Monopoly Law’s prohibition against trade associations organizing monopolistic conduct by operators within their industry.
In May 2019, Mou Provincial Administration for Market Regulation (“PAMR”) received a report alleging that Mou Provincial Cement Association (“Cement Association”) had organized coordinated price increases among cement producers. After investigation, the PAMR issued an administrative penalty decision on 28 June 2022, finding that the Cement Association had facilitated and coordinated multiple monopoly agreements among 13 cement enterprises in the relevant region to uniformly raise cement prices. The association was ordered to cease the violations and fined RMB500,000 (equivalent to US$70,200). The association applied for administrative reconsideration. The State Administration for Market Regulation of the People’s Republic of China (“SAMR”) upheld the penalty. The association then filed an administrative lawsuit seeking to annul both decisions. The first-instance court dismissed the claim. The association appealed.
The SPC held that the Cement Association had established communication platforms via WeChat groups, meetings, and industry conferences to organize and promote discussions among major local cement producers regarding peak-shifting production, market conditions, and pricing. These actions fostered a consensus to avoid price competition and maintain price levels. The involved cement producers largely adjusted prices uniformly according to the timing and magnitude agreed upon in these communications. The SPC ruled that the Cement Association actively planned, organized, coordinated, and promoted the formation and implementation of the horizontal monopoly agreement with the goal of “peak-shifting production and maintaining cement prices”, playing a dominant role in the process. Thus, its conduct violated the Anti-Monopoly Law’s prohibition on trade associations organizing monopolistic behavior. The penalty decision and reconsideration ruling were found to be fully substantiated, with the fine falling within the statutory range and proportionate to the nature, duration, and social harm of the violations, consistent with the principle of proportionality between punishment and offense. The appeal was dismissed and the original judgments affirmed.
Typical case 3: Huangmou Chemical Pharmaceutical Co., Ltd. v. Mou Provincial Administration for Market Regulation, SAMR, an anti-monopoly administrative penalty and administrative reconsideration case, SPC (2023) SPC Zhi Xing Zhong No. 30, Nanjing Intermediate People’s Court of Jiangsu Province (2021) Su 01 Xing Chu No. 753 – This case clarifies the definition of the relevant product market for APIs, elaborates on the methodology for determining whether API operators have concluded and implemented horizontal monopoly agreements, and outlines the factors considered in determining the proportion of fines imposed.
Huangmou Chemical Pharmaceutical Co., Ltd. (“Huangmou”), Suzhou Youmou Technology Co., Ltd. (“Youmou”), and Jiangsu Jiamou Pharmaceutical Co., Ltd. (“Jiamou”) were the only three companies producing camphor API in China at the time of the alleged monopolistic conduct. Huangmou and Youmou produced synthetic camphor, while Jiamou produced natural camphor. Following a report, Mou Provincial Administration for Market Regulation (“PAMR”) investigated the three companies and related entities. On 31 May 2021, it issued an administrative penalty decision, determining that the three companies had concluded and implemented a horizontal monopoly agreement. Huangmou was ordered to cease the violations, disgorge illicit gains, and pay a fine equivalent to 5% of its previous year’s sales. Huangmou applied for administrative reconsideration. The SAMR upheld the penalty. Huangmou then filed an administrative lawsuit seeking to annul both decisions. The first-instance court dismissed the claim. Huangmou appealed.
The SPC held that natural camphor and synthetic camphor were substantially identical in terms of usage, quality testing, and sales channels, and were fully substitutable for downstream pharmaceutical manufacturers, indicating strong demand-side substitutability. The three companies were thus competitors in the domestic camphor API market. After Youmou ceased camphor API production, it commissioned Huangmou to produce industrial-grade synthetic camphor under an agreement whereby Youmou would assist Huangmou in expanding its market share for camphor API. The terms of industrial-grade camphor processing were linked to the market price of camphor API. This arrangement constituted a horizontal monopoly agreement to divide sales markets and fix prices. Additionally, the three companies coordinated prices through meetings, WeChat, and phone calls, using negotiated prices as the basis for quotations to downstream pharmaceutical manufacturers, thereby facilitating the implementation of fixed or manipulated prices. Huangmou and Youmou’s market division and price-fixing overlapped with the price coordination among all three companies, amplifying the anti-competitive effects by eliminating price competition and severely harming downstream pharmaceutical producers and end consumers. Huangmou benefited significantly from the conduct and repeatedly delayed investigations and provided false statements during the inquiry. The 5% fine imposed by the PAMR fell within the statutory range and was proportionate to the nature, duration, and harm of the violations, as well as Huangmou’s cooperation with the investigation, consistent with the principle of proportionality. The penalty and reconsideration decisions were upheld, and the appeal was dismissed.
Typical case 4: Moudi Fifth Construction Engineering Group Co., Ltd. v. Jianmou Concrete Co., Ltd., a horizontal monopoly agreement dispute case, SPC (2024) SPC Zhi Min Zhong No. 456, Chongqing First Intermediate People’s Court (2023) Yu 01 Min Chu No. 303 – This case clarifies the presumption of loss for operators who entered into contracts with implementers of a horizontal monopoly agreement during its effective period, and addresses the burden of proof and legal consequences when the implementers claim that price increases were due to non-monopoly factors. It reduces the evidentiary burden on plaintiffs in horizontal monopoly agreement disputes.
In March 2017, Moudi Fifth Construction Engineering Group Co., Ltd. (“Construction Group”) and Jianmou Concrete Co., Ltd. (“Jianmou”) entered a commercial concrete sales contract specifying the unit price. In September 2018, the parties signed a supplementary agreement increasing the price by RMB90 (equivalent to US$12.6) per cubic meter based on the original contract price. From the execution of the supplementary agreement until April 2020, Jianmou supplied the Construction Group with 5,192.5 cubic meters of commercial concrete. In June 2021, the local Market Regulation Administration issued an administrative penalty decision, determining that Jianmou and Jiangmou Building Materials Co., Ltd. (“Jiangmou”) had concluded and implemented a horizontal monopoly agreement to fix prices and divide sales markets for commercial concrete from April 2014 to March 2019. During this period, these two companies were the only actual producers and suppliers of commercial concrete in the local market. In April 2023, the Construction Group filed a lawsuit claiming that Jianmou’s implementation of the horizontal monopoly agreement had caused it losses and sought compensation. The first-instance court ordered Jianmou to compensate the Construction Group RMB 467,325 (equivalent to US$65,612). Jianmou appealed.
The SPC held that the sales contract and supplementary agreement between the Construction Group and Jianmou were concluded and performed during the implementation of the horizontal monopoly agreement with Jiangmou, rather than under normal and fair market competition conditions. The price increase borne by the Construction Group was a direct result of Jianmou’s monopolistic conduct, and it was reasonable to presume that the Construction Group suffered losses due to the monopoly agreement. Regarding the amount of compensation, since neither the market competitive price for commercial concrete in the relevant market nor the price of substitute goods was available, and there was no evidence of freely negotiated market prices by Jianmou before or after the monopoly period, the prices in the contract and supplementary agreement were deemed “fixed prices” under the monopoly agreement. The first-instance court’s calculation of losses—based on the price difference of RMB 90 (equivalent to US$12.6) per cubic meter multiplied by the total volume of 5,192.5 cubic meters—was appropriate. Jianmou claimed that the price increase was wholly or partially due to non-monopoly factors such as rising raw material costs but failed to provide evidence to prove the existence of such factors or to distinguish between the effects of monopoly and non-monopoly factors on the transaction price. Without such evidence, Jianmou bore the adverse consequences of insufficient proof. The first-instance court’s method of calculating losses based on the price increase was upheld. The appeal was dismissed, and the original judgment was affirmed.
Typical case 5: Hubei Sanmou New Materials Co., Ltd. v. Hubei Xinmou Chemical Co., Ltd., a horizontal monopoly agreement dispute case, SPC (2024) SPC Zhi Min Zhong No. 350, Wuhan Intermediate People’s Court of Hubei Province (2023) E 01 Zhi Min Chu No. 335 – This dispute arose between an upstream manufacturer and a downstream intermediary distributor. Through the arrangement of a non-compete clause, the parties effectively divided markets for downstream customers, demonstrating significant anti-competitive effects. The SPC accordingly determined that the non-compete clause constituted a horizontal monopoly agreement.
In November 2021, Hubei Sanmou New Materials Co., Ltd. (“Sanmou”) and Hubei Xinmou Chemical Co., Ltd. (“Xinmou”) entered into a sales contract whereby Xinmou supplied formaldehyde to Sanmou. Article 8 of the contract is a non-compete clause, stipulating that “the supplier shall maintain confidentiality regarding the customer enterprises of the purchaser and shall not engage in cross-regional sales. If the supplier or its agent inadvertently enters a business relationship with a downstream enterprise of the purchaser, the supplier must cease supply within seven working days…” After the execution of the sales contract, Xinmou entered into a procurement agreement and framework contract with an energy conservation company (a customer of Sanmou) to supply formaldehyde. Sanmou alleged that Xinmou utilized its delivery access to Sanmou’s customers to conduct direct transactions in violation of the non-compete clause and filed a lawsuit seeking RMB 500,000 (equivalent to US$70,200) in management fees from Xinmou. The first-instance court held that the non-compete clause was a clause protecting customer information, not a market-division or competition-restricting monopoly clause, and was neither unfair nor invalid. The facts did not sufficiently prove that Xinmou had utilized Sanmou’s customer information, and thus Xinmou did not breach the contract. Sanmou’s claims were dismissed. Sanmou appealed.
The SPC found that beyond the supplier-distributor relationship, Xinmou and Sanmou were competitors in the formaldehyde sales market in a specific region of Hubei Province. The non-compete clause effectively divided the market into two segments: one comprising Sanmou’s downstream end-users, from which Xinmou was excluded, and another consisting of enterprises not Sanmou’s customers, where Xinmou could operate freely. This arrangement constituted a horizontal monopoly agreement to divide the regional formaldehyde sales market, unlawfully restricting Xinmou’s legitimate business rights and depriving Sanmou’s downstream customers of transactional freedom. Sanmou’s claim for breach of contract relied exclusively on the non-compete clause, which was deemed invalid. Therefore, Sanmou’s claim lacked contractual basis. Although the first-instance court’s reasoning regarding non-breach was flawed, its conclusion was correct. The appeal was dismissed, and the original judgment was affirmed.
Typical case 1: Hangzhou Qingmou Co., Ltd. v. Mou Municipal Administrative Examination and Approval Bureau, Mou Municipal Big Data Center, and First-Instance Third Party Jiaomou Smart City Development Co., Ltd. for abuse of administrative power to eliminate or restrict competition, SPC (2023) SPC Zhi Xing Zhong No. 1011 – This case represents the first instance in which the SPC recognized an abuse of administrative power to eliminate or restrict competition, establishing key criteria for identifying such conduct.
Hangzhou Qingmou Co., Ltd. (“Qingmou”), a provider of internet bicycle rental services, brought an administrative lawsuit against Mou Municipal Administrative Examination and Approval Bureau (“MAEA Bureau”) and Mou Municipal Big Data Center (“Big Data Center”). Qingmou alleged that the defendants had unlawfully established and implemented a franchise scheme for shared electric bicycles in the city, constituting an abuse of administrative power to eliminate or restrict competition. Qingmou sought revocation of the challenged administrative act. The first-instance court dismissed Qingmou’s claims. Qingmou appealed.
The SPC, in the second instance, held that the MAEA Bureau and Big Data Center’s act of establishing and granting the franchise for shared electric bicycles to Jiaomou Smart City Development Co., Ltd. constituted an exercise of administrative power that restricted market transactions. The court found this act lacked both legal basis and reasonableness and had the effect of eliminating or restricting competition, thus violating the prohibition against abuse of administrative power under Anti-monopoly Law of the People’s Republic of China (“Anti-Monopoly Law”). As the MAEA Bureau had exceeded its authority in establishing the franchise without legal basis and given insufficient evidence to show that revoking the act would harm national or public interests, the SPC ruled that the challenged administrative act should be revoked. It accordingly reversed the first-instance judgment and revoked the administrative act.
Typical case 2: Mou Provincial Cement Association v. Mou Provincial Administration for Market Regulation, State Administration for Market Regulation, an anti-monopoly administrative penalty and administrative reconsideration case, SPC (2024) SPC Zhi Xing Zhong No. 148, Beijing Intellectual Property Court (2023) Jing 73 Xing Chu No. 6605 – This case establishes that where a trade association plays a decisive or leading role in facilitating the formation or implementation of a monopoly agreement through organizing, convening, leading, planning, manipulating, directing, or initiating such conduct, it shall be deemed a violation of the Anti-Monopoly Law’s prohibition against trade associations organizing monopolistic conduct by operators within their industry.
In May 2019, Mou Provincial Administration for Market Regulation (“PAMR”) received a report alleging that Mou Provincial Cement Association (“Cement Association”) had organized coordinated price increases among cement producers. After investigation, the PAMR issued an administrative penalty decision on 28 June 2022, finding that the Cement Association had facilitated and coordinated multiple monopoly agreements among 13 cement enterprises in the relevant region to uniformly raise cement prices. The association was ordered to cease the violations and fined RMB500,000 (equivalent to US$70,200). The association applied for administrative reconsideration. The State Administration for Market Regulation of the People’s Republic of China (“SAMR”) upheld the penalty. The association then filed an administrative lawsuit seeking to annul both decisions. The first-instance court dismissed the claim. The association appealed.
The SPC held that the Cement Association had established communication platforms via WeChat groups, meetings, and industry conferences to organize and promote discussions among major local cement producers regarding peak-shifting production, market conditions, and pricing. These actions fostered a consensus to avoid price competition and maintain price levels. The involved cement producers largely adjusted prices uniformly according to the timing and magnitude agreed upon in these communications. The SPC ruled that the Cement Association actively planned, organized, coordinated, and promoted the formation and implementation of the horizontal monopoly agreement with the goal of “peak-shifting production and maintaining cement prices”, playing a dominant role in the process. Thus, its conduct violated the Anti-Monopoly Law’s prohibition on trade associations organizing monopolistic behavior. The penalty decision and reconsideration ruling were found to be fully substantiated, with the fine falling within the statutory range and proportionate to the nature, duration, and social harm of the violations, consistent with the principle of proportionality between punishment and offense. The appeal was dismissed and the original judgments affirmed.
Typical case 3: Huangmou Chemical Pharmaceutical Co., Ltd. v. Mou Provincial Administration for Market Regulation, SAMR, an anti-monopoly administrative penalty and administrative reconsideration case, SPC (2023) SPC Zhi Xing Zhong No. 30, Nanjing Intermediate People’s Court of Jiangsu Province (2021) Su 01 Xing Chu No. 753 – This case clarifies the definition of the relevant product market for APIs, elaborates on the methodology for determining whether API operators have concluded and implemented horizontal monopoly agreements, and outlines the factors considered in determining the proportion of fines imposed.
Huangmou Chemical Pharmaceutical Co., Ltd. (“Huangmou”), Suzhou Youmou Technology Co., Ltd. (“Youmou”), and Jiangsu Jiamou Pharmaceutical Co., Ltd. (“Jiamou”) were the only three companies producing camphor API in China at the time of the alleged monopolistic conduct. Huangmou and Youmou produced synthetic camphor, while Jiamou produced natural camphor. Following a report, Mou Provincial Administration for Market Regulation (“PAMR”) investigated the three companies and related entities. On 31 May 2021, it issued an administrative penalty decision, determining that the three companies had concluded and implemented a horizontal monopoly agreement. Huangmou was ordered to cease the violations, disgorge illicit gains, and pay a fine equivalent to 5% of its previous year’s sales. Huangmou applied for administrative reconsideration. The SAMR upheld the penalty. Huangmou then filed an administrative lawsuit seeking to annul both decisions. The first-instance court dismissed the claim. Huangmou appealed.
The SPC held that natural camphor and synthetic camphor were substantially identical in terms of usage, quality testing, and sales channels, and were fully substitutable for downstream pharmaceutical manufacturers, indicating strong demand-side substitutability. The three companies were thus competitors in the domestic camphor API market. After Youmou ceased camphor API production, it commissioned Huangmou to produce industrial-grade synthetic camphor under an agreement whereby Youmou would assist Huangmou in expanding its market share for camphor API. The terms of industrial-grade camphor processing were linked to the market price of camphor API. This arrangement constituted a horizontal monopoly agreement to divide sales markets and fix prices. Additionally, the three companies coordinated prices through meetings, WeChat, and phone calls, using negotiated prices as the basis for quotations to downstream pharmaceutical manufacturers, thereby facilitating the implementation of fixed or manipulated prices. Huangmou and Youmou’s market division and price-fixing overlapped with the price coordination among all three companies, amplifying the anti-competitive effects by eliminating price competition and severely harming downstream pharmaceutical producers and end consumers. Huangmou benefited significantly from the conduct and repeatedly delayed investigations and provided false statements during the inquiry. The 5% fine imposed by the PAMR fell within the statutory range and was proportionate to the nature, duration, and harm of the violations, as well as Huangmou’s cooperation with the investigation, consistent with the principle of proportionality. The penalty and reconsideration decisions were upheld, and the appeal was dismissed.
Typical case 4: Moudi Fifth Construction Engineering Group Co., Ltd. v. Jianmou Concrete Co., Ltd., a horizontal monopoly agreement dispute case, SPC (2024) SPC Zhi Min Zhong No. 456, Chongqing First Intermediate People’s Court (2023) Yu 01 Min Chu No. 303 – This case clarifies the presumption of loss for operators who entered into contracts with implementers of a horizontal monopoly agreement during its effective period, and addresses the burden of proof and legal consequences when the implementers claim that price increases were due to non-monopoly factors. It reduces the evidentiary burden on plaintiffs in horizontal monopoly agreement disputes.
In March 2017, Moudi Fifth Construction Engineering Group Co., Ltd. (“Construction Group”) and Jianmou Concrete Co., Ltd. (“Jianmou”) entered a commercial concrete sales contract specifying the unit price. In September 2018, the parties signed a supplementary agreement increasing the price by RMB90 (equivalent to US$12.6) per cubic meter based on the original contract price. From the execution of the supplementary agreement until April 2020, Jianmou supplied the Construction Group with 5,192.5 cubic meters of commercial concrete. In June 2021, the local Market Regulation Administration issued an administrative penalty decision, determining that Jianmou and Jiangmou Building Materials Co., Ltd. (“Jiangmou”) had concluded and implemented a horizontal monopoly agreement to fix prices and divide sales markets for commercial concrete from April 2014 to March 2019. During this period, these two companies were the only actual producers and suppliers of commercial concrete in the local market. In April 2023, the Construction Group filed a lawsuit claiming that Jianmou’s implementation of the horizontal monopoly agreement had caused it losses and sought compensation. The first-instance court ordered Jianmou to compensate the Construction Group RMB 467,325 (equivalent to US$65,612). Jianmou appealed.
The SPC held that the sales contract and supplementary agreement between the Construction Group and Jianmou were concluded and performed during the implementation of the horizontal monopoly agreement with Jiangmou, rather than under normal and fair market competition conditions. The price increase borne by the Construction Group was a direct result of Jianmou’s monopolistic conduct, and it was reasonable to presume that the Construction Group suffered losses due to the monopoly agreement. Regarding the amount of compensation, since neither the market competitive price for commercial concrete in the relevant market nor the price of substitute goods was available, and there was no evidence of freely negotiated market prices by Jianmou before or after the monopoly period, the prices in the contract and supplementary agreement were deemed “fixed prices” under the monopoly agreement. The first-instance court’s calculation of losses—based on the price difference of RMB 90 (equivalent to US$12.6) per cubic meter multiplied by the total volume of 5,192.5 cubic meters—was appropriate. Jianmou claimed that the price increase was wholly or partially due to non-monopoly factors such as rising raw material costs but failed to provide evidence to prove the existence of such factors or to distinguish between the effects of monopoly and non-monopoly factors on the transaction price. Without such evidence, Jianmou bore the adverse consequences of insufficient proof. The first-instance court’s method of calculating losses based on the price increase was upheld. The appeal was dismissed, and the original judgment was affirmed.
Typical case 5: Hubei Sanmou New Materials Co., Ltd. v. Hubei Xinmou Chemical Co., Ltd., a horizontal monopoly agreement dispute case, SPC (2024) SPC Zhi Min Zhong No. 350, Wuhan Intermediate People’s Court of Hubei Province (2023) E 01 Zhi Min Chu No. 335 – This dispute arose between an upstream manufacturer and a downstream intermediary distributor. Through the arrangement of a non-compete clause, the parties effectively divided markets for downstream customers, demonstrating significant anti-competitive effects. The SPC accordingly determined that the non-compete clause constituted a horizontal monopoly agreement.
In November 2021, Hubei Sanmou New Materials Co., Ltd. (“Sanmou”) and Hubei Xinmou Chemical Co., Ltd. (“Xinmou”) entered into a sales contract whereby Xinmou supplied formaldehyde to Sanmou. Article 8 of the contract is a non-compete clause, stipulating that “the supplier shall maintain confidentiality regarding the customer enterprises of the purchaser and shall not engage in cross-regional sales. If the supplier or its agent inadvertently enters a business relationship with a downstream enterprise of the purchaser, the supplier must cease supply within seven working days…” After the execution of the sales contract, Xinmou entered into a procurement agreement and framework contract with an energy conservation company (a customer of Sanmou) to supply formaldehyde. Sanmou alleged that Xinmou utilized its delivery access to Sanmou’s customers to conduct direct transactions in violation of the non-compete clause and filed a lawsuit seeking RMB 500,000 (equivalent to US$70,200) in management fees from Xinmou. The first-instance court held that the non-compete clause was a clause protecting customer information, not a market-division or competition-restricting monopoly clause, and was neither unfair nor invalid. The facts did not sufficiently prove that Xinmou had utilized Sanmou’s customer information, and thus Xinmou did not breach the contract. Sanmou’s claims were dismissed. Sanmou appealed.
The SPC found that beyond the supplier-distributor relationship, Xinmou and Sanmou were competitors in the formaldehyde sales market in a specific region of Hubei Province. The non-compete clause effectively divided the market into two segments: one comprising Sanmou’s downstream end-users, from which Xinmou was excluded, and another consisting of enterprises not Sanmou’s customers, where Xinmou could operate freely. This arrangement constituted a horizontal monopoly agreement to divide the regional formaldehyde sales market, unlawfully restricting Xinmou’s legitimate business rights and depriving Sanmou’s downstream customers of transactional freedom. Sanmou’s claim for breach of contract relied exclusively on the non-compete clause, which was deemed invalid. Therefore, Sanmou’s claim lacked contractual basis. Although the first-instance court’s reasoning regarding non-breach was flawed, its conclusion was correct. The appeal was dismissed, and the original judgment was affirmed.