Study On The Classification Governance Of Resale Price Maintenance

Resale price maintenance(RPM)has always existed in a peculiar way,both domestically and abroad,in the past and in the present.On the one hand RPM has been restricted in principle by national antitrust laws to varying degrees and in different ways,while on the other hand PRM has been widely used in many sales fields such as wine,clothing,jewelry,sports equipment,automobiles,gasoline and electrical appliances,and even become the dominant sales method of some products.Many countries including the European Union also introduce exemptions on RPM from time to time.Since the implementation of the antitrust law in China,RPM has gradually become the focus of attention in both theoretical and practical circles,and the influential RPM cases emerged constantly in the public and media view.In this thesis,we choose to study the classification governance of RPM,and explore the competitive effects of RPM and the corresponding classification governance ideas under different market competition structures,which is obviously of great theoretical and practical significance.Resale price maintenance is a vertical price restriction behavior in which the manufacturer and the retailer sign an agreement to limit the retail price of the product.It may be a contract design to improve efficiency,or it may be a monopoly tool to hinder market competition.Because of this complexity,it is difficult for us to judge whether the contract is good or bad based on the content of the contract itself,and we must combine the intention of the implementing subject,the consequences of the implementation and other more evidence to make an objective judgment.Generally speaking,there are two basic rules for RPM governance in various countries: illegal per se or rule of reason.Formally,the principle of illegal per se is opposite to rule of reason.In essence,illegal per se has internal consistency with rule of reason.Both principles admit that RPM has good effect on some times and has bad effect on the other times,but they have different understandings of the proportion of good and bad effect.Different governance principles have different enforcement costs and error costs.The governance of monopoly agreements should be devoted to reducing the social costs caused by actions that hinder competition.This thesis constructs the RPM governance cost function according to the efficiency probability of RPM,and obtains the theoretical basis that RPM can carry out classification governance: when the probability of RPM behavior which will hinder competition is high,the principle of illegal per se is implemented for RPM;when the probability of RPM behavior which does not have the effect of destroying competition or is likely to improve efficiency is high,rule of reason is implemented for RPM.Adopting the classified governance mode with the coexistence of two governance principles can minimize the governance cost.Starting from this concept,this thesis selects corresponding governance principles according to the influence of RPM on competition under the analysis framework of RPM classification governance and follows the logic that of "Why RPM needs classification governance ?Why RPM can be classified ?How to implement classification governance" by using game analysis method,comparative research method and case analysis method.In this thesis,we identify and classify the competitive effects of RPM so as to solve this difficult problem that puzzled by antitrust enforcement and judicial practice.Then we propose a analysis framework of RPM that is compatible with the principles of per se illegal and rule of reason,and show that RPM can be categorized and governed.The competitive effects of RPM are discussed separately under four market competitive conditions.RPM is classified into two types: those with "a high probability of harming competition" and those with "no competitive detrimental effect",based on the conclusion of whether RPM is conducive to horizontal collusion and whether it can promote services under different market structures.The "per se illegal" principle of governance applies to RPM that has a "high probability of harming competition" and the "rule of reason" applies to RPM that does not have "a disruptive competition effect".Finally,from the aspect of system construction,this thesis puts forward some policy suggestions on the classification governance of resale price maintenance and points out the future research direction.From the above study,the thesis draws the following main conclusions:(1)In an exclusive agency markets without considering service,when product substitution is low and the bargaining power of the retailer is strong or the bargaining power of the manufacturer is strong,and when there is a certain degree of substitution in the product market,the RPM acts performed by the manufacturer are classified as promoting horizontal collusion and the principle of per se illegal should be applied to them;in markets where product substitution is low and the bargaining power of both suppliers and buyers is equal,the RPM acts performed by the manufacturer are not classified as promoting horizontal collusion and rule of reason should be applied to them.(2)In a common agency market without considering service,when the manufacturer's bargaining power is strong,the RPM act is classified as one that can promote horizontal collusion,and the principle of per se illegal should be applied to it;when the retailer's bargaining power is strong and the retailer has high substitutability,the RPM act performed by the manufacturer is classified as one that cannot promote horizontal collusion,and rule of reason should be applied to it.(3)In an exclusive agency markets with considering service,RPM is divided into two categories according to whether it facilitates collusion: in markets where product substitution is high or in markets where product substitution is low and retailers have weak bargaining power,RPM is not classified as promoting horizontal collusion;otherwise,RPM is classified as promoting horizontal collusion.RPM is divided into two categories according to whether it contributes to service improvement: when product substitution is high and retailers have strong bargaining power,RPM performed by manufacturers is classified as one that can improve service levels;otherwise,RPM is classified as one that can not improve service levels.Rule of reason should be applied for RPM when the manufacturer's bargaining power is strong and product substitutability is low.RPM should be exempted when the retailer's bargaining power is strong and product substitutability is high.The principle of per se illegal should be applied for RPM other than the above cases.(4)In a common agency markets with considing service,RPM is divided into two categories according to whether it facilitates horizontal collusion: when the manufacturer has strong bargaining power,RPM is classified as one that promotes horizontal collusion;when the retailer has strong bargaining power,RPM is classified as one that does not promote horizontal collusion.RPM was divided into two categories according to whether it facilitated service improvement: when retailer substitution was high,RPM was classified as a category that could improve service,and when retailer substitution was low,RPM was classified as a category that could not improve service.Combining the positive and negative effects of RPM under this market,the principle of per se illegal should be applied to RPM when retailer substitutability is low and manufacturer bargaining power is high;rule of reason should be applied to RPM when retailer substitutability is low and retailer bargaining power is high and when retailer substitutability is high and manufacturer bargaining power is high;and when retailer substitutability is high and retailer bargaining power is high,RPM should be exempted.The main contributions of this thesis are(1)Based on the recognition of RPM competition effect,this thesis proposes a new RPM classification governance framework.This study breaks through the single governance principle mindset and aims to facilitate the transition of resale price maintenance regulation to diversified governance.The antitrust classification governance framework,which is compatible with the principle of illegal per se and rule of reason,is also the core value of this study.(2)Based on the above constructed classification governance framework,this thesis discusses both the positive and negative effects of resale price maintenance on market competition.Resale price maintenance has been studied only in terms of its unilateral effects(positive or negative)on competition.In reality,the effects of resale price maintenance on competition are intricate and complex.This thesis discusses both positive and negative effects of resale price maintenance in the framework of classification governance,aiming to classify resale price maintenance based on competition effects.(3)Based on the situation where both upstream and downstream of the industry have bargaining power,this thesis discusses the relationship between resale price maintenance and horizontal collusion,and draws new conclusions.In terms of research assumptions,previous studies have assumed that manufacturers have full bargaining power when analyzing the impact of resale price maintenance on competition;this thesis is close to reality and assumes that both manufacturers and retailers have some bargaining power.Previous studies have concluded that manufacturers who implement resale price maintenance must have sufficient market power or RPM should not be considered illegal.The findings of this thesis suggest that resale price maintenance by manufacturers in certain circumstances may promote collusion and thus may be per se illegal when manufacturers do not have strong bargaining power.