Internet Minimum Advertised Price Policy (IMAP or MAP) refers to a policy that sets the minimum advertised price of a manufacturer’s goods. Because of the ease of online distribution, policing the actions of every online retailer can be difficult. An IMAP sets the standard for all retailers to follow.
Some manufacturers wish to implement an IMAP to ensure that the quality of their products matches the price. For example, a high-end power tool company may not want its products grouped together with products of a lesser quality, and lesser price. By setting a higher minimum advertised price, the manufacturer can retain its unique space in a crowded market.
In general, antitrust laws exist to prevent collusion in the market place, including what is typically referred to as price fixing. However, the United States Supreme Court has upheld the validity of IMAPs.
This Supreme Court ruling, Leegin Creative Leather Products, Inc v PSKS, Inc, 551 US 877 (2007), ruled that IMAPs are not per se invalid under antitrust law, but instead, should be analyzed under the rule of reason. The “rule of reason” is a theory in antitrust law that, in general, judges a monopoly or restraint by reviewing the factual setting behind the restraint. As a result, IMAPs can be fact specific (including industry, product, or service) and should be drafted by experienced e-commerce attorneys.
There is one major distinction to be made. IMAPs cannot require the retailer to sell the product at a certain price. Instead, IMAPs can require the retailer to advertise the product no lower than a certain minimum price. Although retailers may be able to sell the product at a lower price by requiring the consumer take some action (call, email, add to cart, etc).
If your e-commerce business has received an IMAP and has questions, or if you are a manufacturer wishing to implement an IMAP, our e-commerce attorneys can help. Simply contact our e-commerce attorneys by completing the contact form on this page or call 855-473-8474.
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