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July 14, 2008


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It might be RPM, but is it harmful to competition? Considering you (were able to buy and) bought a competing product i would say not.


It obviously distorts competition between retailers. Absent the RPM scheme (assuming there is one), the dealer would have offered discount on Fender Bass and I would have purchased from him rather than from the other. The RPM scheme clearly chills price competition downstream. It in turns harms consumers as I had to go for second best.

This being said, the crux of the matter here is not whether it is harmful or not to competition (I think it is). The question here is related to the efficiencies that arise - and the rationales - from RPM (brand protection, etc.). Fender is a legendary guitar brand, which would have a strong case under Article 81(3) EC. But you know the story: RPM is per se unlawful under EC law as a result of what the Article 81(3) EC exception is not available.

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