Minimum Resale Price Maintenance Prohibition Under the Ethiopian Competition Law: Law and Economic Analysis

Jimma University Journal of Law [Vol. 8, 2017]

38 Pages Posted: 15 May 2017

Date Written: May 7, 2017

Abstract

Minimum resale price maintenance (MRPM) is a device employed by a manufacturer to control its products after they are sold to retailers. MRPM occurs when a manufacturing firm replaces vertical integration by market exchange to enhance efficiency. Since 1991, Ethiopia has experienced free market economy and enacted competition laws to regulate anti-competitive practices to maximize economic efficiency and social welfare. Previous competition law assessed MRPM under rule of reason to examine economic efficiency; however, the current competition law swerves out of this path and puts MRPM under per se illegal. This Article is a modest contribution to the law and economics analysis and argues that rule of reason approach of MRPM should be adopted rather than making it per se illegal.

Keywords: Vertical restraint, MRPM, free-riding, efficiency, rule of reason, per se illegal, externality, surplus, experience and credence goods, Ethiopia

JEL Classification: K21, L4, L42

Suggested Citation

Dargie, Alekaw Assefa, Minimum Resale Price Maintenance Prohibition Under the Ethiopian Competition Law: Law and Economic Analysis (May 7, 2017). Jimma University Journal of Law [Vol. 8, 2017]. Available at SSRN: https://ssrn.com/abstract=2968283

Alekaw Assefa Dargie (Contact Author)

Dire Dawa University ( email )

Dire Dawa
Ethiopia

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