Online Price Restraints Under U.S. Antitrust Law

This article is part of a Chronicle. See more from this Chronicle

Richard Steuer, May 15, 2015

In the United States, the application of the antitrust laws to electronic commerce has progressed incrementally over the years. At first, the conventional wisdom was that electronic commerce was too new a phenomenon to expect the antitrust laws to keep up, but electronic commerce has existed now for some three decades and that rationalization no longer rings true.

For the most part, the rules applicable to restraints limiting, or indirectly influencing, prices in electronic commerce reflect the rules that apply to such restraints in every type of commerce. To the extent there is still uncertainty, it usually reflects the difficulty of applying principles originally established in the bricks-and-mortar world to virtual resellers delivering a combination of tangible and intangible products…

Three significant questions have arisen in the United States with respect to restraining prices in electronic commerce generally:

  1. May a supplier use agency or consignment arrangements, particularly for intangible products that are not inventoried, to set online prices?
  2. May a supplier restrict the prices that resellers are permitted to display on their websites or otherwise offer in electronic commerce?
  3. May a supplier prohibit resellers from engaging in electronic commerce altogether, or from selling through certain online platforms such as auction sites or marketplaces?