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28-12-2016 | Issue 2/2017

Review of Industrial Organization 2/2017

Online RPM and MFN Under Antitrust Law and Economics

Journal:
Review of Industrial Organization > Issue 2/2017
Authors:
Pinar Akman, D. Daniel Sokol

Abstract

The legal framing of a firm’s pricing strategy can determine whether it constitutes online resale price maintenance (RPM) or online most favored nation (MFN). Together, cases that involve online RPM and MFN can be viewed as a natural experiment of how antitrust economics and law may adapt to an online world. Thus far, legal theories that have been inconsistent with economic theories have dictated enforcement across jurisdictions, which has led to confusion that thwarts potentially efficient business practices. This paper distinguishes issues of online RPM from traditional RPM and online RPM from online MFN. We apply the economics learning to RPM and analyze the antitrust cases of online RPM and MFN to date in the United States, Europe, and Australia. Finally, we offer policy recommendations that reduce the confusion in current legal doctrine.

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