Resale price maintenance (RPM) is defined by the Competition and Markets Authority: "RPM is where a supplier and a retailer agree that the retailer will not resell the supplier’s products below a specified price."
Note: I used the term price fixing in the title of this post. Technically retail price maintenance is not the same thing as price fixing, however they are both actions that harm the consumer by causing a price not to lower with competition. Both of these practises are illegal in many countries.
|Screenshot of the webpage on Trilogy's website|
In communication assumed to be directly from TYT, price fixing is openly discussed:
"Regular price is 110(simple)/118usd(GPS)
But please note that our MOQ is 50pcs ,and retailer price should not less than 219/229usd"
This also reveals that the actual price the dealers are buying the radio at is only $110, and currently, the only dealer selling the radio in the UK is reselling them for £199.99! ($257 USD)
The webpage suggests that TYT may be deliberately limiting the market to artificially maintain a high cost for its radio, not only by fixing the price, but also by only allowing a single retailer in the country to sell the radio.
In a guidance document published by the Competition and Markets Authority, the following advice is given to retailers:
"You may still be involved in an unlawful RPM agreement where a supplier:
- imposes restrictions on how far you can discount its product
- prevents or limits your ability to advertise lower prices online (so-called ‘minimum advertised price policies’)
- has linked a resale price for the product to what other retailers are selling it for"
|Screenshot showing that TYT will not sell the radio to dealers who do not agree to fix the price.|
Setting of a recommended retail price is legal. RPM is different because in RPM the manufacturer forces retailers to sell at the price they set, otherwise they cut off the supply.
Other websites also suggest that resale price maintenance is also illegal in the USA. If you are a citizen of the USA or any other country where RPM is illegal, and are affected by this RPM, you may wish to report it to the relevant authorities so that a free market can be established and consumers like yourself can benefit from competition in prices.
See this page for more information on resale price maintenance in the UK.
Do you think this constitutes illegal resale price maintenance?
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