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E-commerce is on the rise and showing no signs of stopping. E-commerce grew 16 percent in the first half of 2016 in the United States, while U.S. consumers are projected to spend $385 billion online this year, according to a November 2016 Business Insider article noting that nearly all of the growth in the retail sector now takes place in the digital space. Many companies are taking advantage of online third-party marketplaces to sell their products, both directly and through authorized distributors. In order to reap the benefits and avoid the pitfalls associated with online sales, companies must both control their pricing and stop unauthorized sellers.
Companies are susceptible to abuse at the hands of online sellers; one mechanism for safeguarding a brand and controlling pricing is to establish a minimum advertised pricing policy, or a MAP policy. MAP policies are unilateral policies in which manufacturers declare the minimum prices at which authorized retailers or distributors are to advertise the products. MAP policies are not actual agreements and they do not restrict the prices at which authorized distributors may sell the company’s products. A MAP policy can benefit companies by leading to price coordination among sellers, allowing better control of margins, avoiding downward pressure on pricing from large retailers, and keeping authorized distributors content and compliant with company policies and procedures. Your Ally Law member firm attorney can review your online sales partnerships and practices and advise you on an appropriate MAP policy.
For a MAP policy to be effective, it must be enforced. Companies should implement a graduated enforcement system designed to eliminate unauthorized sales and deter future impermissible sales. Just such a valuable enforcement system is described in the Global Matters blog post Innovative Online Seller Enforcement Program By Ally Law Member Vorys. Your Ally Law member firm has lawyers experienced in effective enforcement programs to protect your products and trade names globally while assuring compliance with applicable laws and regulations. For more information about Ally Law member firm services and outstanding lawyers, contact us at team@ally-law.com.
Click here for the original article by Whitney Gibson and Jordan Cohen of Ally Law member firm Vorys, Sater, Seymour and Pease, LLP.
