Competition law dispute: Supreme court’s interpretation of a vertical cartel

Insight No.02/26                          February 2026

In brief

Article 11.1 of the Law on Competition of Mongolia states that business entities are prohibited from entering into the following types of agreements or arrangements (cartels) intended to restrict competition. The law regulates four types of anti-competitive agreements or arrangements (cartels), one of which is an agreement to fix the price of goods or products.

The law defines a cartel as an agreement between business entities but does not elaborate on the distinctions between horizontal and vertical forms. However, in its resolution dated 19 February 2020, the Supreme Court clarified the circumstances under which a cartel is considered horizontal.

Accordingly, this legal insight summarizes how the Supreme Court interpreted vertical cartels when resolving a competition law dispute.

Factual background

M LLC, a manufacturing company, entered into agreements with retail stores and supermarkets to set a uniform retail price for end consumers. The Authority for Fair Competition and Consumer Protection (“AFCCP”) determined that this constituted unlawful price‑fixing that restricted fair competition and imposed a penalty of MNT 1,209,682,136, calculated based on the legally prescribed fine of up to 6 percent of the previous year’s sales revenue.

M LLC did not accept the penalty and filed a complaint with the First Instance Court of Administrative Disputes seeking annulment of the penalty decision.

Court Decisions

The dispute was reviewed by three-level courts. The First Instance Court upheld the claim of M LLC, while the Appellate Court of Administrative Disputes and the Supreme Court concluded that M LLC had formed a cartel and violated the Law on Competition.