Resale Price Agreement

Some producers also defend the maintenance of resale prices by saying that they guarantee fair returns for both manufacturers and resellers, and that governments have no right to infringe on the freedom to enter into contracts without good reason. While any proposed agreement to maintain the resale price must be evaluated on a case-by-case basis from one market to another, the following factors will determine whether a given price agreement likely existed under a cause analysis rule. In any event, the courts will now consider the impact of such agreements on the market. These agreements have been highly controversial over the years, particularly after the 2007 Supreme Court decision in Leegin. If you are considering a resale price maintenance contract or want to question it, we may be able to help. More information about resale price maintenance contracts can be found in a blog post on The Antitrust Attorney Blog. Resale price maintenance contracts or (RPM) are agreements wherers agree that they will sell products or products at prices determined above or above the price floor (minimum regime) or at a price cap (maximum regime). A characterization that a particular type of conduct in itself constitutes a breach of an agreement means that it falls within the rare category of agreements which, in the view of cartel and abuse of dominance legislation, in almost all cases have little or no competitive value. In practice, a plaintiff who, in itself, was suing in a cartel, has a much simpler path to victory. Such an applicant must not present anti-competitive prejudice (often including complex market and market power analyses) and the defendants are not in a position to respond with commercial or competitive justifications for their conduct.

The types of claims that are in themselves breaches of cartels are horizontal price fixings (i.e. price fixings between or between competitors), market distribution between competitors, bid manipulation, and certain forms of group boycott and engagement agreements. For many years, maintaining the resale price – known as rPM by connoisseurs – was on the list of the most prohibited antitrust practices, an in itself violation of the cartels.