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Resale Price Maintenance & Minimum Advertised Price (“MAP”) Policies: Where to Draw the Line to Maximize Growth

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.
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