We found unauthorized resellers – what’s next?
In the previous post, we showed how to monitor online stores and how you can use monitoring tools to detect unauthorized sellers. However, what to do after we find them? What steps can we take to legally maintain the desired price positioning and brand image on the market?
Unauthorized sales – why monitor it?
The phenomenon of unauthorized sales is very unfavorable for producers. Resellers dropping prices below SRP can lead not only to price wars and lower margins but also to the deterioration of the brand image. Detection of such activities is not easy – more and more shops,auction platforms and marketplaces are appearing on the Internet, and their manual monitoring is impossible. Therefore, it is worth equipping yourself with appropriate monitoring tools, as detecting unauthorized sales can bring significant benefits to the brand. Depending on the country in which you operate, you can take appropriate steps under applicable law to help you achieve the desired price level.
Prices in the European Union and the United States
Under European Union law, brands can’t impose prices on sellers who sell their products. They can only recommend prices – but the final decision belongs to the reseller. Any attempt to force the seller on a specific price can be detected and punished by the appropriate authority. This is to prevent unfair competition and maintain market transparency.
The situation is slightly different in the USA, where MAP prices, i.e. Minimum Advertised Price, operate. This means that the manufacturer may impose a minimum price at which the products can be advertised (a price label includes as an advertisement), and sellers must comply with it. Selling below the MAP price may result in legal intervention by the brand, for example in the form of a call to stop the sale or to correct the price.
Unauthorized resellers – what can we do in the EU?
Unauthorized sellers offering branded products in the EU countries most often purchase goods outside the European Economic Area and then sell it on the spot without first obtaining permission to use the trademark. In this case, the manufacturer may legally demand that the sale of such products be discontinued, referring to the property rights.
The situation is somewhat different when the product sold comes from another country of the European Economic Area, to which it was legally introduced. Then we can deal with the exhaustion of the trademark protection rights. In this case, the manufacturer may not prohibit the sale of products. In such situation, it is worth checking whether there are different legal possibilities to protect the brand’s rights, such as, damage to the image of the trademark or the product itself, however such laws largely depend on the individual legal system of the country.
Just knowing about unauthorized resellers is not everything – just because we have no right to impose prices on sellers does not mean that we can lose the brand image. So it’s good to regularly monitor prices and effectively detect unauthorized sales, and then take legal steps to protect us.
If you would like to efficiently monitor prices and detect unauthorized sales, the Dealavo platform can help you. You will be able to implement at least three methods to detect unauthorized sales – detecting the cheapest sellers, unprofitable prices and models not sold in your country. Contact us – we’ll show you our platform and how to configure it to get the best results.