Anyone ever hear of Unilateral Pricing Policy? What a scam.

[djg21]

68. The answer is "sometimes"

A manufacturer is generally free to have a unlateral policy regarding pricing. In other words, a manufacturer lawfully can maintain a policy of not dealing with any vendors who sell at below MSRP, and can unilaterally terminate any vendor found not to be complying with its policy. This is a necessary implication of what is know as the Colgate Doctrine (United States v. Colgate & Co., 250 U.S. 300, 307-08 (1919) (a company is free to deal with whomever it wishes unilaterally as long as it does not act with the purpose of forming a monopoly)).

One rub comes when either the manufacturer does something intended to ellicit an agreement from the vendor, for instance, by enacting a policy whereby the first offense results in a warning, the second in a penalty, and the third in a termination. This is called a "structured termination" and may be intended to illicit a tacit or express agreement from the vendor to maintain set prices. MAP was one of these policies -- advertising funds were offered only to those vendors who agreed to advertise, and hence sell, at prices dictated by manufacturers. These can be antitrust violations.

Note that I am speaking in general terms, and the necessary analysis can be very fact-intensive. But, as a general rule, people, and companies, are free in this country to do business with whomever they wish.