Pervasive Mind’s Glossary of Essential MAP Terms
Welcome! We’re glad you’re here. Because various teams work together to enforce MAP, we know that there are various tenure and experience levels, often resulting in knowledge gaps for brand teams. We’d like to offer the following as a must-know list of common MAP terms and regulations to help you get up to speed quickly. If we’re missing anything or you see something off, please drop us a note – we’re happy to correct or expand where we can.
Minimum Advertised Price (MAP) Policy:
A pricing policy set by a brand that establishes the lowest price at which a retailer can publicly advertise its products. This policy is a formally written document and is distributed to retail partners and aims to maintain brand equity and fair competition across retailers. This policy only applies to the advertised price and the price listed on the PDP (Product Detail Page) but does not apply to the final sale price at checkout.
Unilateral Pricing Policy (UPP):
A pricing policy similar to MAP but sometimes seen as more restrictive. Unlike MAP, UPP governs both the advertised price and the actual sale price, ensuring price consistency across all channels.
Scraping:
This is the automated process of extracting data from websites, typically using software tools (commonly known as “spiders,” “crawlers,” or “bots”). In the context of MAP compliance, scraping is used to monitor and gather advertised prices across online reta
MAP Compliance:
This refers to the degree of adherence of retailers and sellers to a brand’s Minimum Advertised Price policy. MAP compliance ensures that products are advertised at or above the established minimum price, maintaining fair market competition and protecting brand equity. Retailers or resellers are “non-compliant” when they are in violation of a MAP price or intellectual property guideline.
Bots (aka Scrapers/Extractors):
This term refers to automated programs or algorithms designed to navigate websites and collect specific information. In MAP enforcement, bots are used to extract pricing data, product listings, and seller information across multiple online platforms efficiently.
MAP Violation:
This occurs when a retailer advertises a product below the brand’s specified minimum advertised price, which can harm brand equity and disrupt fair market competition. Violations need to be fully documented with evidence, commonly in the form of screenshots/images provided by the solution provider.
Strike(s):
Similar to American baseball, think about the “3-strikes-and-you’re-out” approach. This is a system brands use to track and penalize retailers for repeated MAP violations. Retailers may face increasing penalties after multiple strikes. Most brands include a tiered strike program which increases in the severity of the action taken. For example, first strikes are typically warnings or simple call-outs while the third can include stopping shipments or putting a retailer on a Do Not Sell list for a defined period of time.
Unauthorized Sellers:
These are retailers (aka sites/domains) or resellers (aka merchants) that sell a brand’s products without permission. These sellers often disregard MAP policies and may contribute to a devaluation of the brand. Sometimes, however, these retailers/resellers are unaware they are violating MAP and simply need to be made aware of the violation and asked to come back into compliance.
Coercion:
The act of compelling someone to act in a certain way or comply with specific demands using pressure, threats, or force. In the context of MAP policies, coercion typically refers to situations where a brand unlawfully pressures retailers into adhering to pricing agreements, which can violate antitrust laws. For example, coercion might involve threats of terminating a business relationship or withholding benefits if a retailer refuses to comply with a pricing policy.
Infringement:
This term is often synonymous with “violation.” This is any activity that violates a brand’s intellectual property, MAP policies, or distribution agreements. Infringements often involves unauthorized sellers and can even include counterfeit products or intellectual property violations.
MAP Holiday:
This is a temporary suspension of a brand’s MAP policy, often during promotional periods like Black Friday or Cyber Monday, allowing retailers to advertise at lower prices without violating the policy. To make the most of your MAP program, MAP holidays should be clearly defined in advance with the start date, stop date and approved lower price. This should be communicated well in advance so retailers can plan accordingly and should be reiterated as the dates approach.
Rebates:
These are incentives provided by brands to retailers or distributors as a reward for meeting sales targets or adhering to MAP policies. Rebates can help offset compliance costs for retailers.
Allowances:
This refers to price reductions or discounts provided by brands to retailers to encourage sales or offset advertising expenses. These must be managed carefully to avoid undermining MAP policies.
Chargebacks:
These are financial penalties imposed on retailers for MAP violations or failure to comply with brand policies. Chargebacks are used as a deterrent and enforcement tool.
Note: Head over to our blog to understand best practices around rebates, allowances and chargebacks.
Blocking Technology:
Brands, retailers and interested parties want to understand market dynamics and positioning by scraping or extracting data from webpages just as much as retailers want to block them from doing so. Blocking technology consists of purchased services and software – or even homegrown tools – that restrict the extraction of data from their sites. Another flavor of this technology can serve the purpose of preventing unauthorized sellers from listing products on marketplaces, such as Amazon or eBay. This second form of the technology helps brands enforce MAP policies and maintain control over their product distribution.
Authorized Seller Program:
Within the MAP policy, this is a strategy that defines and limits the number of retailers who have been approved to sell a brand’s products, ensuring compliance with their MAP policy. In essence, by being a valued partner and adhering a brand’s MAP policy, this strategy allows brands to exercise some level of control on the market and prevent those who might heavily discount with little regard for their impact to sales and brand value.
Gray Market:
This term typically refers to the trade of genuine products through unauthorized or unintended channels. While legal, gray market sales can undermine MAP policies and damage brand value. Grey market sellers can be retailers who have decided to circumvent proper brand approvals and channels, but more often they are simply unaware that they are outside of the brand’s desired business practices. In our experience, savvy brands will typically try to convert valued “Grey Market Sellers” into approved sellers to drive revenue for the brand and better control market volatility.
Buy Box:
This is the section of Amazon’s product page that allows customers to add an item to their cart. The Buy Box is awarded to sellers who meet Amazon’s criteria for seller placement. This determination looks at various criteria including shipping speed, seller rating, price, and more. Retailers focused on winning the Buy Box often disregard MAP to win sales.
Channel Conflict:
This occurs when different sales channels (e.g., direct-to-consumer, authorized retailers, third-party sellers) compete in ways that harm the brand, such as undercutting prices or violating MAP policies.
Dynamic Pricing:
The practice of using automated rule-driven pricing engines to adjust prices in response to market conditions, competitor pricing, or demand. Most consumers are familiar with the dynamic pricing practices of online travel engines or airline ticket pricing. This strategy can very commonly create challenges for MAP compliance.
Brand Equity:
The perceived value of a brand’s products in the mind of the consumer. This is driven by factors like pricing, quality, and reputation. MAP policies are critical for preserving brand equity, establishing brand loyalty and driving revenue.
Enforcement Program:
This is a structured tactical plan that brands use to monitor and address MAP violations, often involving technology, legal action, and communication with retailers.
Third-Party Marketplace:
This is an online platform like Amazon, eBay, or Walmart.com, where multiple sellers are allowed to sell products either directly or via drop-shipping. Many MAP violations occur on these sites due to the presence of unauthorized sellers or non-compliant retailers.
Workflow:
This refers to a structured approach for executing tasks related to MAP compliance, which can follow one of two main approaches:
Manual Workflow: A labor-intensive process where brand representatives visually monitor online sites for potential MAP violations, collect evidence in spreadsheets, and manually send emails to retailers or sellers regarding infringements.
Automated Workflow: A cloud-based software solution that automates the monitoring of websites and marketplaces. These solutions typically capture screenshots of violations, organizes them into a centralized platform, and provides an intuitive interface for sending and receiving infringement details with partners. This approach streamlines enforcement and reduces the time and effort required for compliance management.
Relevant Court Cases
Dr. Miles Medical Co. v. John D. Park & Sons Co. (1911): This landmark Supreme Court case established the principle that resale price maintenance (RPM) agreements, where manufacturers set minimum resale prices, were per se illegal under antitrust laws. This ruling influenced how MAP policies were viewed for much of the 20th century.
Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007): This Supreme Court decision overturned Dr. Miles, holding that RPM agreements should be judged under the ‘rule of reason’ rather than being automatically deemed illegal. The ruling gave manufacturers more flexibility to enforce MAP policies and agreements, provided they do not unreasonably restrict competition.
United States v. Colgate & Co. (1919): In this case, the Supreme Court ruled that manufacturers could unilaterally refuse to do business with retailers who do not comply with pricing policies, so long as there was no agreement or coercion. This decision is often cited in support of Unilateral Pricing Policies (UPP).
State Oil Co. v. Khan (1997): The Supreme Court ruled that vertical price restraints, including maximum price-fixing, are not per se illegal and should be evaluated under the rule of reason. This case further shaped the framework for evaluating MAP-related pricing strategies.
Monsanto Co. v. Spray-Rite Service Corp. (1984): This case clarified the distinction between lawful unilateral actions and unlawful agreements under antitrust laws. The Supreme Court held that evidence must show a ‘conscious commitment to a common scheme’ to prove an illegal agreement.
Continental T.V., Inc. v. GTE Sylvania Inc. (1977): The Supreme Court ruled that non-price vertical restraints, such as restrictions on where products can be sold, should also be evaluated under the rule of reason. This ruling is relevant to MAP policies when combined with territorial or channel restrictions.
American Needle, Inc. v. National Football League (2010): While not directly about MAP, this antitrust case emphasized the importance of competition analysis under the rule of reason, a standard that applies to MAP enforcement when assessing anti-competitive effects.
