The EU prepares different laws that could drastically change the retail sector

Just two years ago, the European Commission sanctioned Asus, Denon & Marantz, Philips and Pioneer a total of € 111 million for imposing fixed or minimum resale prices on their online retailers. They were charged with breach of EU antitrust rules by using the strategy known as “RPM” (resale price maintenance).

Now the European Commission is preparing to implement a law related to the “MAP”, a strategy similar to the RPM, something that will give manufacturers an advantage but will affect retailers.

What is MAP?

The MAP policy (minimum advertised price) or also known as Colgate It is a pricing policy used by manufacturers and brands to prevent their products from being sold for a lower price than they consider correct. This, for example, helps brands that are considered premium they are not devalued by some retailers, who sell for a price well below the recommended one and consumers will eventually stop seeing the brand as high-end.

What does the EU want to do?

Despite the fact that on several occasions the European Commission has been against manufacturers that use this type of policies, because they could favor the monopoly, recently it has begun to work on a project so that manufacturers can set a minimum price in the promotions of your products. A law that could completely change the retail sector as we know it now.

The big brands will be the big beneficiaries that could prevent their products from being found in some establishments with discounts of up to 50%. However, we will have to wait a little longer to know if this new regulation goes ahead in the new update that the EU is carrying out of the policies between retails and manufacturers, which with the growth of the online channel was necessary.

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If approved, the June 1, 2022Although it would be a problem because there are no courts or bodies in the member countries that are in charge of controlling this.

What else is known about European distribution laws?

The current Vertical Block Exemption Regulation (VBER) will be updated in June 2022, since the current one expires on May 31, 2022. Therefore, the European Commission has now published its first draft, where above all positive aspects for brands are observed:

  • Resale Price Maintenance (RPM).
  • Double price. Brands will be able to offer different wholesale prices depending on whether the products will be sold online or offline. This could negatively affect e-commerce.
  • Shared exclusivity and reduction of restrictions. Brands may grant a limited number of distributors the shared exclusivity of a particular territory or group of customers. As well as protecting an exclusive territory or a group of clients.
  • Online intermediation services: the new VBER expressly excludes from the exemption any obligation imposed on companies that use intermediate online services not to offer their products or services under more favorable conditions through competing services, effectively prohibiting the best price clauses directed against competing platforms.

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