MAP policies and the law: what to ask your counsel

We are not lawyers and none of this is legal advice. It is the short version to read before the meeting, so the meeting is about your policy instead of about definitions.

Two terms do most of the work. A MAP policy sets the lowest price a reseller may advertise. Resale price maintenance is an agreement about the price a reseller may sell at. They are different things, and US antitrust law has treated them differently.

The two cases your counsel will name

United States v. Colgate and Co., 250 U.S. 300 (1919) is where the unilateral part comes from. Suppose a manufacturer announces in advance the terms on which it will do business. If it then declines to go on supplying someone who does not meet them, that has been treated differently from an agreement on price.

Leegin Creative Leather Products v. PSKS, 551 U.S. 877 (2007) is the resale price maintenance case. It replaced a rule that treated minimum resale price agreements as automatically unlawful under federal law with analysis under the rule of reason. Several states are stricter than federal law, so where your resellers advertise matters.

Neither case is a licence. They are the reason the document is written as a policy you issue, applied through a decision you make about supply.

What that means for how you behave week to week

Issue the policy. Do not negotiate it. A policy your resellers signed as a term they agreed to starts to look like an agreement about price. That is the analysis the structure was meant to stay clear of.

Do not ask a reseller to confirm they will comply, and do not make their promise the condition of carrying on supply. Announce, then decide.

Do not carry messages about pricing between resellers. If one reports another, act on the listing and leave the conversation alone.

Stay out of the selling price. Your policy covers advertising. A reseller who advertises at the floor and sells lower over the phone is doing the thing the policy deliberately leaves alone.

Write the consequence down before you apply it, and apply it the same way to everyone. Selective enforcement is an antitrust argument and a commercial one at the same time, and your largest dealer will make it first.

Questions worth bringing to the meeting

Does our policy language describe advertising all the way through, without drifting into the selling price?

Which states do our resellers advertise into, and does any of them change the answer?

Does anything we send resellers ask for agreement or acknowledgement in a way that could be read as a contract term?

Who signs off on ending supply, and is that decision documented the same way every time?

If we sell into other countries, whose competition law applies there?

Your counsel will give you better answers than we can. What we do is enforce the policy they write, as it is written, which is our MAP monitoring and enforcement service.