RPM as an Exclusionary Practice

Abstract

A key distinction in classifying RPM systems according to the present state of the literature is the distinction between single manufacturer-driven RPM and any other RPM system. While anticompetitive explanations suggest that RPM is introduced in furtherance of a cartel either at the retail level or at the manufacturing level, procompetitive explanations show how RPM may benefit a single manufacturer. Subsequent to the Supreme Court's ruling in Leegin v. PSKS, it would seem logical to create a presumption of procompetitiveness when RPM is introduced at the genuine initiative of a single manufacturer. This article challenges the consensus according to which single manufacturer-driven RPM is categorically procompetitive. I show that RPM can be used, and is likely to be used, as an exclusionary measure for the elimination of upstream competition. It thus has significant anticompetitive potential even when it is not introduced in furtherance of a cartel.