MAP Policies
Minimum Advertised Price (MAP) Policies are unilateral policies set by manufacturers that dictate the advertised price for products, but not the actual resale price. These policies promote healthy competition among resellers, protect brand value, maintain dealer margins and prevent price erosion in competitive markets. When implemented unilaterally by a manufacturer, MAP policies are generally lawful. However, when competitors coordinate to adopt and enforce MAP policies collectively, the legal risks escalate significantly. That distinction is at the center of a sweeping class action lawsuit aimed at the archery industry.
The Case
Janochoski is a recently filed class action lawsuit that may impact companies which have adopted MAP policies. Through Section 4 of the Clayton Act, the plaintiff alleges that key players in the archery equipment industry, through the help of the Archery Trade Association (ATA), are conspiring to fix prices of bows, arrows and related gear through coordinated enforcement of MAP policies in violation of federal antitrust laws. The complaint utilizes public information, including social media posts, articles and common board members, to connect retailers, distributors and manufacturers with the ATA and one another.
This case serves as a critical reminder of where legal boundaries lie, and how quickly well-intentioned vertical pricing strategies can cross into questionable horizontal agreements and cartel activity. Whether your company has a MAP policy in place or not, this case is a cautionary tale for manufacturers and retailers alike.
The Allegations: A Coordinated Cartel Under the ATA Umbrella
The complaint alleges that major manufacturers, retailers and distributors in the archery industry, including Hoyt Archery, Bowtech, Bass Pro Shops, Cabela’s and more, used the ATA as a vehicle to coordinate and enforce MAP policies across the industry. According to the plaintiff, this coordination amounted to horizontal agreements between competitors to fix, raise and stabilize retail prices for archery products.
The lawsuit claims that these practices suppress competition among retailers, prevent discounting, set price floors and ultimately cause consumers to pay more than they would in a more competitive market. The plaintiff brings individual claims, and claims among a proposed class, through Section 4 of the Clayton Act for violations of Sections 1 and 3 of the Sherman Act and various state laws.
Vertical vs. Horizontal Agreements – The Line Between Legal and Risky
In Leegin Creative Leather Products, Inc. v. PSKS, Inc., the United States Supreme Court previously held that vertical price restraints, such as resale price maintenance (RPM) or MAP policies, are no longer considered automatically illegal (per se). Now, under Leegin such agreements are subject to the “rule of reason” and evaluated based on the restraints’ pro- and anti-competitive effects.
On the contrary, horizontal agreements among competitors to fix prices, what the plaintiff alleges here, are per se illegal, meaning the agreements are automatically unlawful regardless of intent or market impact.
The Janochoski case attempts to underscore this distinction:
- Vertical MAP Enforcement: A manufacturer sets a policy and enforces it independently across its dealer network (brand > distributor > retailer).
- Horizontal MAP Coordination: Competitors jointly agree to adopt and enforce MAPs, often through trade associations or shared enforcement mechanisms.
In the complaint, the plaintiff asserts that the ATA facilitated horizontal agreements among the competitors which, if proven, may push defendants conduct from a “rule of reason” analysis to per se illegal. Critically, brands, retailers and distributors should avoid conduct that may be inferred to be conspiring or agreements with competitors.
Key Takeaways
MAP Policies Must be Unilateral
MAP policies should be developed and enforced independently by each manufacturer. Coordination with competitors, even through third parties, like a trade association, can trigger antitrust liability.
Avoid Shared Enforcement Mechanisms
Using common platforms or forums to monitor and enforce MAP compliance across competitors may be viewed as evidence of collusion.
Trade Associations Are Not Safe Harbors
While trade associations help facilitate industry collaboration, they must not be used to coordinate pricing or enforcement strategies. The ATA’s alleged role in this case is a prime example of how such coordination can cross the line.
Train Your Teams
Sales, marketing and dealer relations teams should be trained to understand the limits of MAP enforcement and avoid discussions about pricing with competitors.
Review Your Compliance Practices
If your company uses MAP monitoring software, participates in trade associations or enforces pricing policies across a dealer network, now is the time to audit those practices for antitrust risk.
Conclusion
The Janochoski case is a stark reminder that protecting brand value through MAP policies must be done carefully and lawfully. Horizontal coordination, even if well-intentioned, can expose companies to legal trouble.
If your business uses MAP policies or participates in industry groups, we recommend a proactive compliance review. KJK’s eCommerce practice group advises manufacturers, distributors and retailers on anti-trust-safe MAP strategies and trade association participation.
