Resale Price Maintenance in the EU: In Statu Quo Ante Bellum ?

Abstract:     
Resale price maintenance -a manufacturer requiring its dealers to sell its products at or above a given price- is a subject of much discussion among antitrust scholars. In the United States, minimum RPM was subject to a strict prohibition until in 2007 the Supreme Court in the Leegin case replaced the longstanding per se rule of Dr Miles (1911) by a “rule of reason” approach whose precise implications have yet to be defined.

There is a widespread perception - ultimately incorrect - that minimum RPM constitutes a per se offence in Europe under Article 81 EC. Consequently, the Leegin decision raised expectations that the EU might also modify its approach on occasion of its ongoing review of vertical restraints. Yet, the European Commission's proposed Regulation and Guidelines, introduced for public comments on 28 July 2009, exhibit a fundamental continuity with the texts currently in force. This continuity was foreseeable with the proper understanding of the scope and nature of the rule against RPM in Europe.

The first part of this article briefly summarizes and criticises, in a non-technical manner, some of the favourable and unfavourable views on RPM in the literature. The second part looks at the treatment of RPM under European competition law, and more specifically under the Verticals block exemption regulation.

This paper was prepared for the 36th Annual Conference on International Antitrust Law and Policy (September 24 & 25, 2009) organised by the Fordham Competition Law Institute (FCLI), and will be published in the annual volume with the proceedings of the conference edited by Barry E. Hawk.

Number of Pages in PDF File: 33

Keywords: antitrust, resale price maintenance, RPM, free riding, Leegin, per se, rule of reason

JEL Classification: D3, D4, K21, L42, L40, L21

working papers series