The Law and Economics of Resale Price Maintenance

The Law and Economics of Resale Price Maintenance Review of Industrial Organization 13: 57–84, 1998. 1998 Kluwer Academic Publishers. Printed in the Netherlands. The Law and Economics of Resale Price Maintenance FRANK MATHEWSON and RALPH WINTER Institute for Policy Analysis, and Department of Economics, University of Toronto, Toronto, ON, Canada M5S 3G6 I. Introduction This paper reviews the economics of resale price maintenance and critiques select- ed Canadian cases since the passage of the Competition Act in 1986. Resale price maintenance (RPM) represents an area of active research in economics and contin- ued controversy in competition law. In some respects, the US law has evolved to a more liberal treatment of contractual restrictions such as RPM, reflecting in part new learning on the explanations and effects of these restrictions. In Canada, the number of RPM cases brought by the Canadian Competition Bureau (the Bureau) has declined from the period 1980–1985, although the real value of the correspond- ing fines for those found guilty of the practice has increased: in 1980–85, there were 58 cases as compared to the period 1990–95 when there were 12 cases; the corre- sponding fines increased from $37,480 to $108,080. Some scholars have called for per se legality of vertical restraints but the Review of Industrial Organization Springer Journals

The Law and Economics of Resale Price Maintenance

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Kluwer Academic Publishers
Copyright © 1998 by Kluwer Academic Publishers
Economics; Industrial Organization; Microeconomics
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