Vertical restraints in US and Australia may enhance society's welfare.
Vertical price and non-price restraints in Australia and the US were compared in this study. The laws and economics behind various vertical restraints were analyzed, such as resale price maintenance and customer restrictions. Both countries treat vertical restraints differently, but economic theory suggests they may benefit society. Manufacturers have reasons for using these restraints, and they could actually improve welfare. The current Australian approach to regulating resale price maintenance is seen as inadequate, and alternative methods are recommended.