Vertical Restraints

Vertical restraints refer to restrictions imposed by manufacturers or suppliers on their distributors or retailers regarding how they sell or market products. These can include guidelines on pricing, territory limits, or sales methods. While some vertical restraints can promote efficiency and protect brand image, they may also restrict competition by limiting how retailers operate. This can lead to higher prices for consumers if competition is stifled. Regulatory bodies, like the Federal Trade Commission, monitor these practices to ensure they don’t harm consumer choice or market fairness.