In a market where you control your own network, price discipline is how a brand stays a brand. The price is announced, the network holds it, and a reseller who breaks it is dealt with. Everything in that sentence is a reflex, and in Europe every part of it is a problem. The moment you fix, or enforce, a minimum resale price, you are not managing a brand: you are party to an agreement the law treats as restricting competition by its very object, which means nobody has to prove it harmed anyone before sanctioning it.
What is actually forbidden when you set a resale price
The prohibition catches a fixed resale price and a minimum resale price, under any name. A floor called a minimum advertised price is treated as what it does rather than as what it is called. Because the restriction is severe, the block exemption that would otherwise shelter the distribution agreement falls away for the whole agreement, the clause is void, a competition authority may fine, and a party that suffered from it may claim damages before a national court. The asymmetry people expect is not there either: the prohibition applies to an agreement, and a distributor that accepted the floor is a party to it. European distributors know this. It is precisely why they keep the messages.
What you may still do about price
- A maximum price. Capping what a distributor may charge is permitted, because it works in the customer's direction. The limit is practical: a ceiling that every distributor ends up charging, because the margin leaves no room below it, functions as a fixed price and will be read that way.
- A recommended price that is genuinely not binding. You may publish a recommended price. It stays a recommendation only as long as nothing whatsoever happens to a distributor who ignores it. The test is your behaviour, not your vocabulary.
- A promotional campaign of limited duration. A campaign at a set price, over a defined period, organised and funded by you and open to the members who want it, is a different object from a permanent floor. The period has to be genuinely limited and the participation genuinely voluntary, or it is the floor again with a poster on it.
- Your own price, in your own channel. What you charge when you sell directly is yours to decide, and communicating a recommended retail price to consumers yourself is a far stronger anchor than a clause nobody outside the contract ever sees.
- Genuine agency, where the risk really is yours. Where the goods remain your property and the commercial risk sits with you, the intermediary sells on your behalf and the price is yours to set. The qualification follows who carries the risk, not the word used in the contract's title — and a distributor that buys and resells is never an agent, whatever it is called.
Why indirect pressure counts as imposing a price
- Threatening supply. Mentioning the allocation, the next launch or the exclusivity in the same conversation as the discount is the agreement. No clause is needed; the threat and the distributor's compliance are enough.
- Slowing an order down. A delivery that becomes difficult after a price cut, a confirmation that stops arriving, a stock allocation that shrinks: enforcement does not have to be announced to be proved.
- Taking back money. Withdrawing a rebate, a marketing contribution or a co-funded campaign because the recommended price was not observed makes the money conditional on the price, which is fixing the price with an invoice.
- Monitoring and then calling. Watching prices is information. Finding the lower price and raising it with the distributor turns the recommendation into an instruction, and doing it repeatedly turns it into a system.
- Using the network as a police force. Inviting members to report who is discounting, and acting on the report, builds exactly the arrangement that gets sanctioned — and it hands the authority a witness in every member who reported.
- Making access conditional. A listing, a launch, a volume or a territory granted against an undertaking on price is the same prohibited agreement, obtained at the moment when the distributor had the most to lose.
How price monitoring became evidence against the people using it
Watching online prices is not unlawful in itself, and almost everybody does it, because online prices are public, comparable and cheap to collect. The difficulty is that the same transparency works against the person collecting. An authority or a claimant can reconstruct, long afterwards, that a distributor's price moved back up shortly after a message was sent — and the history of that price is still sitting on the internet, timestamped, for anyone who wants it. Monitoring therefore does not create the offence. It creates the timeline on which the offence becomes easy to prove.
What completes the file is the message itself, and this is where a Chinese supplier is most exposed, because the conversation with a European distributor usually happens in writing and stays there. Mailboxes, shared drives and phone messaging can be taken during an inspection at a company's premises, and a sales manager's note saying the distributor was called and corrected its price is worth more to the other side than any clause. The habit that protects you is narrow and easy: make the recommendation once, in writing, say in the same line that it does not bind anyone, and never mention a distributor's price again.
How a price image is actually held in Europe
A price holds when the product is hard to get and worth getting, and that is built with levers that have nothing to do with instructing anyone. Selectivity decides who may sell it at all, under criteria you can defend. Scarcity decides how much each member receives, in which sequence launches happen, and which references exist in which channel. Service — training, demonstration, installation, warranty handled properly — gives a distributor a reason to charge more rather than less. And the recommended retail price you communicate to consumers yourself does more to anchor a price than any conversation with a distributor, because the customer arrives already knowing it.
The uncomfortable half of the answer is that a network where everybody discounts is usually telling you something about your own price list. A distributor cuts the price of a product that sits; it protects the price of one it has to ask for. If your wholesale price leaves a wide margin and your product has no scarcity, the discount is arithmetic, and no clause will hold against arithmetic. Repricing upstream, narrowing the assortment per channel, or giving fewer distributors more support fixes what enforcement cannot.
Before the next price conversation, do an inventory of your own correspondence rather than of your contract. Search your sales team's messages for the places where a distributor's price was mentioned, and understand that this is the file the other side would use. Then set the rule for the team: the recommended price goes out once, marked as non-binding, and after that nobody writes to anybody about a resale price, ever, in any channel. If a clause in a signed contract looks like a floor, have it reviewed by a competition lawyer in the relevant country before you apply it again — the exposure comes from applying it, and that is also the part you can stop today.