Distribution, Competition, and Antitrust / IP Law

Minimum Advertised Price Programs and the Internet

Minimum Advertised Price (MAP) programs should be directed at advertised prices, not actual prices.  That distinction is relatively straightforward in the case of brick-and-mortar retailers.  In that case, actual, in-store prices are not subject to the program, but prices advertised in magazines, or on television or radio, are.

Internet sales present a murkier picture.  It is not always easy to distinguish between advertised prices and actual prices on websites.  For example, what if a website receives advertising co-op money, but links to pages with discount pricing that do not receive co-op money?  Can the Internet retailer undercut MAP pricing on that other web page?

Similarly, is there a difference between “advertising” a price in a box at the top of a webpage, but “listing” a price in connection with an order at the bottom of a webpage?  Does it make a difference if the latter price is only visible after a customer indicates he or she wants to buy the item (i.e., after he or she fills the shopping cart)?

And what about online retailers who come up with creative ways to offer discounts, such as by e-mailing coupons to customers, or offering free shipping at a discount on a product not covered by a MAP policy?  In that case, can the manufacturer deny co-op funds?

There are no easy answers to these questions.  The law is sparse and unsettled.   Companies that sell on the Internet should thus be careful, and exercise appropriate judgment, about the structure of Internet MAP programs.

In an upcoming post, I will start to address some criticisms of MAP programs that are presented in this interesting piece.

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About Howard Ullman

Antitrust, competition, and IP law enthusiast.

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  1. […] a previous post, I linked to an article laying out a number of criticisms of Minimum Advertised Price (MAP) […]

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