Thursday, March 15, 2012
The Economics of Resale Price Maintenance —Why Europe is right not to follow the USA on the slippery slope of Leegin
Posted by D. Daniel Sokol
Christian Ewald has written on The Economics of Resale Price Maintenance —Why Europe is right not to follow the USA on the slippery slope of Leegin.
ABSTRACT: As a result of the US Leegin case on Resale Price Maintenance (RPM), there is an intense debate as to whether the EU should abandon its current approach which is to assess RPM under a rebuttable presumption of illegality. Under the current state-of-play of economic analysis, one should conclude that neither per se illegality of RPM nor a full-blown rule of reason approach are appropriate. In the EU legal framework which—contrary to the US—largely relies on public enforcement of competition law, it is economically sound to stick to the current approach of a rebuttable presumption of illegality. The note explains how the state-of-play in economics may help to minimize the risk of over-enforcement under such an approach.