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Retailers and the manufacturers Minimum Advertised Price (MAP)

Last Edit: 14/09/18

When it comes to retail and the relationship between manufacturers and retailers (distributors), some manufacturers create a policy for distributors that includes one of the following: Minimum Advertised Price (MAP), Suggested Retail Price (SRP) and Recommended Retail Price (RRP). A Minimum Advertised Price (MAP) policy is used in the United States of America but rarely so in the European Union or the United Kingdom. In the United States of America a fixed minimum retail price is illegal, because it runs counter to a free economy, but a Minimum Advertised Price (MAP) circumvents U.S. antitrust laws because it only applies to advertising. Manufacturers will usually defend a Minimum Advertised Price (MAP) policy on the grounds that it protects against brand erosion.

When it comes to the United Kingdom, enforcing a Minimum Advertised Price (MAP) -- sometimes referred to (in the UK) as a part of Resale Price Maintenance (RPM) -- can be more 'tricky' and appears to have a higher likelihood of being viewed as unlawful. The Competition and Markets Authority (CMA) is a government department in the United Kingdom, that aims to reduce anti-competitive activities, and uses the Competition Act 1998 -- an important source of competition law in the UK -- to combat any activities it deems as anti-competitive. The Competition and Markets Authority (CMA) has issued fines of over £1million to companies that imposed a minimum price to online sellers. On the 14/09/18, the UK's official Government website published the following webpage:

https://www.gov.uk/government/publications/resale-price-maintenance-advice-for-retailers/resale-price-maintenance-advice-for-retailers

This webpage stated "You may still be involved in an unlawful Resale Price Maintenance (RPM) agreement where a supplier: prevents or limits your ability to advertise lower prices online". This advice would suggest that a U.S. styled Minimum Advertised Price (MAP) policy could run afoul of UK trade laws. UK retailers generally use/publish a manufacturers Recommended Retail Price (RRP), which should -- according to the gov.uk webpage shown above -- allow retailers to "resell at a price it wants" with "no threats or financial incentives for sticking to the RRP".

In conclusion, a Resale Price Maintenance (RPM) policy -- an agreement between retailer and manufacturers/suppliers not to sell below a specified price -- generally runs afoul of both US and UK trade laws, but when it comes to a Minimum Advertised Price (MAP), it does not appear to currently run afoul of U.S. antitrust statutes, but it may do with the UK's Competition Act 1998.