The Egyptian Competition Authority confirms its approach vis-à-vis Resale Price Maintenance

On 18 May 2024, the Egyptian Competition Authority (“ECA“) published a decision condemning eight manufacturers and suppliers of electric and home appliances for including Resale Price Maintenance (“RPM“) clauses in their agreements with distributors and retailers. These clauses fixed or set a minimum RPM.

RPM is a mechanism by which a supplier or manufacturer sets a fixed or minimum/maximum price for the resale of its products by an independent retailer or distributor. In other words, it is a contractual clause preventing retailers or distributors from setting the resale price of a product at their own discretion.

Although antitrust regulations across the globe explicitly address RPM and generally consider it, except for maximum RPM, as restricting competition in the relevant market, Egyptian Competition Law (“ECL“) does not explicitly address RPM. Nonetheless, it has consistently been interpreted by antitrust practitioners in the jurisdiction as a vertical constraint in violation of Article 7 of the ECL.

In its decision, the ECA adopted the EU Commission’s definition of RPM and noted that any stipulation of a minimum or fixed RPM is considered a violation of Article 7 of the ECL, as it affects market competition by limiting the ability of traders and distributors to offer discounts to consumers.

Given that RPM may be a common practice among manufacturers and suppliers, this decision could have significant implications for businesses in the electric/home appliances sector and beyond.

How can we help?

If you require guidance or need assistance in reviewing your agreements to ensure compliance, please don’t hesitate to reach out to us. For further information, please contact Dr. Khaled Attia or Chahira Bacha.