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Deciphering the Boundaries of MAP Pricing and the Concept of Advertised Prices

Deciphering the Boundaries of MAP Pricing and the Concept of Advertised Prices

The concept of Minimum Advertised Price (MAP) is rapidly gaining traction within the eCommerce community, impacting both sellers and buyers alike. While it appears simple at first glance, MAP entails more complexity than meets the eye. Many brands grapple with questions such as “Where does an ‘advertised price’ end?” or “When does it become ‘the price’?” as they delve into online brand protection strategies.

 

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Now, let’s address both the good news and the bad news. Beginning with the bad news, the answer to these questions is not straightforward—it varies. Each scenario presents unique circumstances, and given that this area of law is relatively recent, it’s advisable to seek advice from an attorney who can offer tailored guidance to suit your specific requirements.

 

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But here’s the positive news: there are useful guidelines available to help you craft your MAP policy and pricing enforcement strategy when engaging with your authorized resellers.

To start, let’s clarify what constitutes an advertised price. According to the New York City Consumer Affairs Bureau (NYCCAB), it refers to “the price of a stock keeping unit [SKU] which a retail store has disseminated through promotional methods such as in-store signage, newspapers, circulars, television, or radio advertisements.” While this definition may appear succinct, there’s considerable nuance to explore within it.

 

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To grasp the beginning point of an advertised price, attention must be given to the term “disseminated” within the definition. As per the Oxford dictionary, disseminate means to widely spread something. Therefore, any pricing information extensively spread by a reseller would be deemed as advertised. This correlates with the examples provided in the NYCCAB definition, including newspapers, television ads, and radio ads.

 

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Determining where an advertised price ends can be less straightforward. Considerations must be made for various methods of dissemination. Let’s explore where an advertised price stops:

In-store Flyer: Flyers intended for widespread distribution, printed in large quantities to reach numerous individuals, would be considered print advertisements. Prices listed in such flyers would fall under advertised prices subject to MAP policies.

Markdowns: These can be more complex. Consider a couple of common scenarios:

Storewide Markdown: If markdowns are not explicitly advertised with signs and are solely represented on each shelf or price tag, they wouldn’t be considered advertisements subject to MAP policies. However, if signage is prominently displayed throughout the store, indicating markdowns, they would qualify as advertised prices subject to MAP policies.

Rack-by-Rack or Departmental Markdown: This requires case-by-case assessment. If widespread signage promotes the markdown, indicating the store’s intent to inform as many people as possible, it would be considered an advertised price subject to MAP policies. Otherwise, if there is no signage beyond the single rack or shelf, the markdown would be considered “the price” and not subject to MAP policies.

PA Announcements: These serve as a combination of radio announcements and in-store flyers, intended to disseminate information widely. Prices mentioned in such announcements would be subject to MAP policies.

Price Tags and Product Shelves: Simply displaying prices on shelves or hang tags does not constitute advertising. This serves an informative purpose rather than promotional and is not intended for widespread dissemination. Therefore, these prices would not be subject to MAP policies.

Online Shopping Cart: This is a debated topic. While some argue that MAP policies can extend to prices in online shopping carts, others suggest that the Federal Trade Commission (FTC) views in-cart prices as outside advertising realms. Brands should implement provisions they deem necessary and be prepared to address challenges that may arise.

Online Ads: Banners, Sponsored Product Ads on platforms like Amazon, and email blasts are clear advertisements subject to MAP policies. Prices displayed in such ads would fall under MAP regulations.