The concept of Minimum Advertised Price (MAP) is gaining popularity within the eCommerce community, encompassing both sellers and buyers. While it may seem straightforward, there’s more complexity to it than meets the eye. Many brands often ask questions like “Where does an ‘advertised price’ end?” or “When does it transition into ‘the price’?” when exploring online brand protection strategies.
Now, let’s address the good news and the bad news. Starting with the bad news, the answer to these questions is not straightforward—it depends. Each situation has unique circumstances, and since this area of law is relatively new, it’s best to consult an attorney who can provide guidance tailored to your specific needs.
But here’s the good news: There are helpful guidelines that can assist you in developing your MAP policy and pricing enforcement approach when communicating with your approved resellers.
To begin with, let’s define what an advertised price is. According to the New York City Consumer Affairs Bureaus (NYCCAB), it refers to “the price of a stock keeping unit [SKU] which a retail store has caused to be disseminated by means of promotional methods such as an in-store sign, newspaper, circular, television, or radio advertising.” Although this definition may seem concise, there’s much to unpack within it.
To understand where an advertised price starts, we need to focus on the term “disseminated” from the definition. According to the Oxford dictionary, disseminate means to spread something widely. Consequently, any pricing information that a reseller spreads extensively would be considered advertised. This aligns with the examples mentioned in the NYCCAB definition, such as newspapers, television ads, and radio ads.
However, some methods are less clear-cut. What about a weekly flyer at the front of the store? What about announcements over the PA system? And what about the price tag itself?
Now let’s explore where an advertised price stops:
In-store Flyer: These flyers, designed for wide distribution, are undoubtedly disseminated materials. If they are printed in large quantities with the intention of reaching as many people as possible, they would likely be considered print advertisements. Prices listed in such flyers would be advertised prices subject to MAP policies.
Markdowns: Determining the status of markdowns can be more complicated due to their various forms. Let’s consider a couple of common scenarios:
Storewide Markdown: If there are no signs explicitly advertising the markdown, and the markdown is solely represented on each shelf or individual price tag, it wouldn’t be considered an advertisement and wouldn’t be subject to a MAP policy. However, this situation is rarely the case. If the store displays signage (e.g., in the front window, upon entry, or throughout the store in bright colors), it would qualify as an advertised price subject to a MAP policy.
Rack-by-Rack or Departmental Markdown: This scenario requires a case-by-case assessment. The explanation provided above still applies: If there is widespread signage promoting the markdown, indicating the store’s intent to inform as many people as possible, it would qualify as an advertised price subject to a MAP policy. On the other hand, if there is no flyer or signage beyond the single rack or shelf, the markdown would simply be considered “the price” and would not be subject to a MAP policy.
PA Announcements: This is a straightforward case. When an announcement is broadcasted throughout the entire store, especially repeatedly, it serves as a combination of a radio announcement and an in-store flyer. The clear intention is to disseminate that information to as many people as possible. Therefore, the prices mentioned in such announcements would be subject to MAP policies.
Price Tags and Product Shelves: Retailers can breathe easy in this regard. Simply displaying the price of a product on the shelf or hang tag does not constitute an advertisement. That price represents the selling price and serves an informative purpose rather than promotional. The goal is not to widely spread this price; it is solely intended to provide consumers with the price. Therefore, these prices would not be subject to MAP policies.
Online Shopping Cart: This is a complex question with varying perspectives. Some respected authorities in the online brand protection realm argue that MAP policies can extend to prices in consumers’ online shopping carts. However, other articles suggest that the Federal Trade Commission (FTC) considers in-cart prices as outside the realm of advertising, thus not subject to MAP policies. Given the uncertainty surrounding this issue, brands should feel free to implement provisions they deem necessary to protect their interests and be prepared to address any challenges that may arise. Reasonable arguments can be made on both sides of the online shopping cart price debate.
Online Ads: Finally, we come to the easiest case. Online ads, including banners, Sponsored Product Ads on platforms like Amazon, and email blasts, are unquestionably advertisements. Therefore, the prices displayed in such ads would be subject to MAP policies.