Overview: Antitrust constraints on efforts to direct the advertising of resale prices
- A minimum advertised price (“MAP”) policy is a supplier’s policy that resellers not advertise prices below a price specified by the supplier.
- The typical objective: Keep advertised prices up in order to promote a value associated with the product’s brand image and to protect resellers who invest resources in promoting the product or provide customer service.
- MAP policy does not restrict the price at which resellers can sell the product.
- A Colgate policy allows a supplier to refuse to sell to a reseller but requires some fairly strict compliance steps and is subject to heightened antitrust scrutiny.
- Effect of having a MAP policy challenged and held unlawful is twofold – both a treble damage award for alleged injury plus potential for injunction. The consent decree on the CD manufacturers’ MAP policy included a bar on the companies from adopting any MAP policy for 7 years.