Study Reveals Impact of Resale Price Maintenance on Consumer Competition
Vertical agreements like resale price maintenance (RPM) can either help competition or harm it, depending on the market context. Strong competition upstream can make vertical restraints beneficial, while weak competition can lead to anticompetitive effects. Collusion is a risk when suppliers or retailers form a tight oligopoly. By analyzing three RPM cases in the UK, researchers found that the impact of RPM on competition and consumers depends on the specific market conditions.