Minimum Resale Price Maintenance Prohibition under the Ethiopian Competition Law: Law and Economic Analysis

Abstract

Minimum resale price maintenance (MRPM) is a device employed by a manufacturer to control its products after they are sold to retailers. MRPM occurs when a manufacturing firm replaces vertical integration by market exchange to enhance efficiency. Since 1991, Ethiopia has experienced free market economy and enacted competition laws to regulate anti-competitive practices to maximize economic efficiency and social welfare. Previous competition law assessed MRPM under rule of reason to examine economic efficiency; however, the current competition law swerves out of this path and puts MRPM under per se illegal. This Article is a modest contribution to the law and economics analysis and argues that rule of reason approach of MRPM should be adopted rather than making it per se illegal.