Top Antitrust Issues for Consumer Products Manufacture and Distribution

Elizabeth Haas is a partner and chair of the Antitrust Practice Group at Foley. In this video, she details unique business challenges that can raise antitrust issues. At Foley, we work closely with our consumer products clients to develop practical strategies, tailored to achieve business objectives while complying with antitrust law.

Key Takeaways

• Manufacturers of consumer products, as well as their distributors and retailers, face a variety of unique business challenges that can raise antitrust issues.
• A manufacturer’s preferred go-to-market strategy may include granting exclusive rights or territories to some distributors and retailers, requiring certain inventory or store requirements, and may prohibit or limit internet sales and advertising.
• These types of strategies are usually permissible, but there are antitrust considerations and limits.
• Sometimes a small change in approach can have a significant effect on the risk of a future antitrust challenge.
• The ability to influence or control the resale price, or price advertising, including minimum advertised pricing or MAP policies, unilateral pricing policies, and suggested resale price policies can present challenging antitrust issues if the programs are not both adapted and executed in careful compliance with the antitrust rules affecting pricing conduct.
• The Robinson Patman Act, and some state equivalents, may limit a manufacturer’s ability to offer different pricing or promotional assistance to competing distributors and retailers. There is no volume discount defense to Robinson Patman claim.
• There is no volume discount defense to Robinson Patman claim.
• Some consumer products manufacturers adopt strategies including direct-to-consumer sales, manufacturer online sales, or company stores that sell in competition with the authorized retailers.
• The antitrust laws do not prevent those strategies, but because they cause the manufacturer to become a competitor of its distributors and retailers extra care is needed to avoid any improper agreements between the manufacturers direct reselling arm and the competing distributors or retailers.