Equally, it could raise competition concerns if competing online retailers were to outsource their pricing decisions to one and the same third party service provider. On my floor, 4 people brought in about 50%-60% of the sales. The Guidance advises that if using RRPs, traders should consider obtaining substantiation from their suppliers or manufacturers that the RRP represents a genuine selling price. In any event, care would need to be taken to ensure that any refusal to supply, or reduce supplies, does not give rise to an abuse of a dominant position if the supplier has a market share of 40% or more. Sometimes referred to as a recommended retail price or RRP, this type of retail price can help to normalize the prices charged by different retailers in a community for the same product. Vertical price fixing is generally prohibited, whereas providing a manufacturer’s suggested retail price (MSRP, also “ recommended retail price ”) and maximum selling prices are allowed – this is briefly the principle of German and European antitrust law on pricing frameworks. By way of general guidance, a supplier should only discuss the level of RRPs with its retailers in exceptional circumstances, for example where the supplier is introducing a new product line and wishes to know how appropriately to price it for the market. However, Recommended Retail Price is not enforceable by law. Learn more. A short summary of what retailers need to know about resale price maintenance (RPM) agreements and how to comply with competition law. the price at which a manufacturer suggests a product should be sold on the retail market, though this may be reduced by the retailer. Even then, the process needs to be managed very carefully as a series of independent bilateral consultations between the supplier and each retailer. In some The usual concern of suppliers is that these platforms cause even stronger downward pricing pressure on retail prices, that the presentation of the products may fall below the suppliers’ desired quality standards and that it facilitates 'free-riding' – this is where it undermines the investments made by the supplier and other authorised distributors to improve the quality and image of the products. Cloudflare Ray ID: 61057d06d8434ab6 Retailer A complained to supplier B with the intention that the supplier would take action against retailer C, or with the expectation that the supplier would do so; or. read. As a practical matter, a competition authority or court is likely to be sceptical about such an argument and may reach a conclusion that there has been an infringement. A supplier may seek to collect the opinions of its retailers about whether its RRPs are set at appropriate levels. In some cases, an online retailer may wish to match the prices offered by competing online resellers. While it is common practice for online retailers to independently use algorithms to monitor competitors’ prices and to make price adjustments accordingly, either automatically or manually, the European Commission has warned that such algorithms should be designed in such a way that doesn't allow them to collude and that businesses will be held responsible for what their automated systems do (see out separate report https://www.out-law.com/en/articles/2017/march/concern-over-collusion-through-algorithms-raised-by-eu-competition-regulator/). 4 The Guidelines provide important guidance for the Bundeskartellamt's work. This type of price fixing has been illegal since 1911. RRP is a price set by the supplier, as a recommendation to the retailer. 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