What is the purpose of resale price maintenance?
Resale price maintenance is a practice in which a manufacturer fixes the price for the resale of a brand product and the retailer is not allowed to sell it at a lower price. Manufacturers use resale price maintenance to more directly prevent inter-retailer price competition.
Is resale price maintenance legal in Australia?
The Australian Consumer Law (ACL) prevents suppliers from imposing minimum resale prices on their customers. The means suppliers aren’t allowed to dictate prices for their products when they’re sold on. This practice is called resale price maintenance, and it’s prohibited under the ACL.
Is resale price maintenance efficient?
Resale price maintenance prevents resellers from competing too fiercely on price, especially with regard to fungible goods. Otherwise, resellers worry it could drive down profits for themselves as well as for the manufacturer.
What is maximum resale price?
Maximum Resale Price means the maximum purchase price that may be paid by any purchaser of a Unit, other than the initial purchaser who acquires the Unit from Declarant, that is determined in accordance with the provisions of Article 6 of this Covenant.
What law protects against resale price maintenance?
Miles Medical Co.) that established the rule that resale-price maintenance was per se illegal under the Sherman Act. After its decision in the Dr. Miles case, the Supreme Court had gradually backed away from per se antitrust liability for other types of vertical agreements.
What is resale price law?
Resale Price Maintenance Agreements or (RPM) are arrangement where resellers agree that they will sell product or products at certain prices at or above price floor (minimum RPM) or at or below a price ceiling (maximum RPM).
Is it illegal to resell items for a higher price Australia?
Buying and reselling legitimately bought products is legal in Australia. Reselling businesses are on the rise. For resellers, the investment and financial risk is low.
Are suppliers allowed to stipulate fixed or minimum resale prices for resellers?
According to the California Attorney General, the state’s antitrust and unfair competition laws prohibit vertical price-fixing—namely, a supplier cannot require, or agree with, a reseller of the supplier’s products to resell at a minimum price (e.g., not below MSRP), or at a set price (MSRP).
Why is resale price maintenance regarded as an anti competitive activity?
RPM is likely to reduce intrabrand competition and thereby discourage retailers from carrying out competition-stimulating sales activities. It also renders readily identifiable a change in resale price set by a particular retailer, easily causing collusion.