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
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: Suggested Citation