The Competition and Markets Authority (CMA) has written an open letter to business owners warning them that engaging in resale price maintenance (RPM) is against the law. RPM occurs when a supplier and a retailer agree that the retailer will not resell or advertise the supplier’s products below a specified price.
Research from the CMA has found that business owners’ understanding of the law is low and only 29% of respondents can correctly define RPM. Accordingly, the CMA’s letter identifies different kinds of RPM that can break the law, as well as warning suppliers and retailers that they can be fined for engaging in RPM.
The open letter is accompanied by guidance for retailers about RPM, and the CMA has also produced a short video to explain what RPM looks like in practice.
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