By Susan Ning, Li Rui and Hazel Yin

On January 5th, 2013, the Xi’an Intermediate People’s Court (the “Court”) ruled in favor of a consumer who sued Shanxi Broadcast & TV Network Intermediary (Group) Co., Ltd. (“Network”), the local cable service provider, for tie-in and imposing unreasonable sales conditions by tying basic cable services with digital channel services. The Court found that the Network’s practice of selling basic cable services on the condition that the subscribers also purchase digital channel services violated Article 17(5) of the Anti-Monopoly Law (“AML”) regarding tie-in sales and imposition of unreasonable trade conditions. In reaching this decision, the court reasoned that because the Network is a lawful monopoly in the local market for cable TV, its conditioning of the sale of basic cable service on the customer’s subscription for digital channels infringes upon the customer’s freedom of choice and diminishes consumer welfare.
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