Whitney Gibson, partner at Vorys, Sater, Seymour and Pease and leader of the firm’s group focused on internet brand and reputation issues, recently led a webinar hosted by The Running Industry Association: “Why MAP Policies Fail And What You Can Do So Your Policy Doesn’t.” Vorys associate Laura Erdmanjoined Gibson, the head of Vorys eControl, in the hour-long discussion on creating and effectively enforcing MAP policies. The webinar recap and replay appear below.
MAP Policies: An Overview
Minimum advertised price policies or MAP policies, for short — are unilateral policies that companies establish through which they declare the minimum prices at which authorized retailers or distributors are supposed to advertise the products.
These policies are not actual agreements. Moreover, MAP policies do not actually restrict the prices at which authorized distributors can sell a manufacturer’s product.
MAP policies can be effective in keeping authorized distributors from advertising unauthorized discounts. However, as Gibson and Erdman discussed, manufacturers must particularly concern themselves with unauthorized retailers.
As they noted in the webinar, a recent study published by Northwestern University found that 53 percent of unauthorized retailers do not comply with MAP policies. According to the study, 15 percent of authorized distributors violate the policies.
The focus of the hour-long discussion, of course, largely centered on how to combat this dilemma.
Gibson and Erdman also spoke about the following:
- how to improve your ability to overcome the First Sale Doctrine defense (including establishing “material differences” and implementing and enforcing quality controls);
- how to control distribution through an authorized reseller program (including examples of key policies);
- a recommended online seller enforcement system, designed to efficiently and effectively stop unauthorized online sales; and
- online traffic diversion and other related schemes.