Identifying an Appropriate Legal Framework for Minimum Resale Price Maintenance: Experiences from the EU and the U.S.

Antitrust legal frameworks around the world have long been hostile to minimum resale price maintenance (“RPM”). Contemporary U.S. antitrust law is more hospitable towards RPM arrangements than EU law is. Chinese courts and antitrust agencies have conflicting practices of minimum RPM enforcement. This paper evaluates the existing evidence, economic analysis, and legal framework – structured rule of reason versus hardcore restraint – regarding the effects of minimum RPM across different jurisdictions.  It then proposes a structured rule of reason analysis to minimum RPM based on two factors: (1) the market power of the supplier or the dealer; and (2) the consumer price increase plus the sale quantity decrease. When either of the two factors is shown, it could be presumed that the minimum RPM is anticompetitive.

By Li Zhu[1]

The antitrust legal frameworks throughout the world have long been hostile to minimum resale price maintenance (“RPM”). In the European Union (“EU”), minimum RPM has generally been treated as a hardcore restriction. Including minimum RPM in an agreement gives rise to the presumption that the agreement restricts competition and thus falls within Article 101(1) of Treaty on the Functioning of the European Union (“TFEU”).^[2] In the United States (“U.S.”), minimum RPM was treated as a per se violation for nearly 100 years. But recently, the U.S. legal framework applied to vertical restraints experienced a s