Vertical restraints and competition policy

Abstract

This report considers the private and social welfare effects of vertical restraints - whereby contractual arrangements between suppliers (manufacturers) and distributors (retailers) extend beyond simple arms-length pricing. It seeks to synthesise and extend existing theory on vertical restraints, so as to identify the conditions where detrimental effects are likely to dominate benign social welfare effects, and vice versa, with the aim of developing a practical framework for the analysis of vertical restraints