MJIEL Vol 9 Issue 1 2012 - Article 5

ABSTRACT: Minimum Resale Price Maintenance agreements are considered anti-competitive in most jurisdictions – both developed and developing – because of their perceived ability to distort price competition between retailers. Economic objective of infusing competition at all levels is to ensure efficiency that leads to consumer welfare in the form of reduced prices and a wider range of choices. The paper begins with challenging the basic assumption that ‘reduced prices always lead to consumer welfare’. The primary proposition set out in the paper is that intra-brand price competition between retailers neither conclusively indicates efficiency nor is welfare enhancing. Rather it adversely affects the intra-brand non-price competition and inter-brand competition in most situations. The paper also highlights how international organizations (UNCTAD, OECD, ICN and WTO), working towards bringing cooperation and convergence on different competition law issues, can work proactively in shaping the treatment accorded to minimum resale price maintenance agreements.

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