1. Introduction

Recommended pricing is a commercial practice in which a manufacturer, supplier, wholesaler, franchisor or distributor suggests the price at which a retailer or downstream business should sell a product or service to consumers.

Recommended prices are generally permissible under competition law because businesses are ordinarily free to suggest retail prices without compelling independent retailers to follow them.

However, recommended pricing can become anti-competitive when it operates as a mechanism for controlling resale prices, eliminating price competition, coordinating competitors or maintaining artificially high market prices.

The central competition-law distinction is between:

Genuine recommended pricing: A non-binding price suggestion that retailers may freely accept, reject or modify.

Resale price maintenance (RPM): A supplier's direct or indirect attempt to require distributors to maintain a specified resale price.

Coordinated pricing: An arrangement through which competing businesses use recommended prices to align their market conduct.

Facilitated price coordination: A system in which suppliers or platforms use pricing recommendations, monitoring and commercial incentives to discourage independent price decisions.

The legal question is therefore not simply whether a recommended price exists, but whether retailers retain genuine commercial independence.

2. Meaning and Nature of Recommended Pricing

Recommended pricing refers to a supplier's communication of a suggested selling price to an independent distributor or retailer.

For example, a manufacturer of electronic equipment may recommend that retailers sell a particular product for MAD 2,000.

A retailer may independently decide to sell it for MAD 1,850, MAD 1,950 or MAD 2,100.

If the recommendation is genuinely voluntary, this generally does not constitute unlawful price fixing.

However, the position changes if the manufacturer:

Threatens to terminate distributors who discount.

Reduces rebates for retailers selling below the recommended price.

Refuses supplies to retailers offering lower prices.

Monitors retailers and demands compliance.

Uses contractual penalties to enforce recommended prices.

Coordinates recommended prices among competing suppliers.

In such circumstances, the recommendation may become a disguised resale price restriction.

3. Legal Framework

A. Article 101 TFEU – European Union

Article 101(1) of the Treaty on the Functioning of the European Union prohibits agreements and concerted practices that restrict competition.

Recommended resale prices may raise concerns where they become binding directly or indirectly.

Article 101(3) allows certain restrictive agreements to qualify for exemption where they generate demonstrable efficiencies, allow consumers a fair share of benefits, impose indispensable restrictions and do not eliminate competition.

B. United States Antitrust Law

Section 1 of the Sherman Act prohibits agreements that unreasonably restrain trade.

Recommended pricing is not automatically unlawful. The decisive question is whether there is an agreement or concerted action restricting independent pricing decisions.

C. Moroccan Competition Law

Morocco's Law No. 104-12 on the freedom of prices and competition provides the principal framework for assessing recommended pricing.

Important provisions include:

Article 2: Establishes the principle of freedom of prices, subject to statutory exceptions.

Article 6: Prohibits agreements and concerted practices having an anti-competitive object or effect, including those that restrict or distort price competition.

Article 7: Addresses abuse of a dominant position and abuse of economic dependence.

Articles 8 onwards: Provide additional rules concerning certain commercial practices and competition-related restrictions.

A genuinely non-binding recommendation is distinguishable from an agreement fixing resale prices. The Moroccan Competition Council may examine the commercial circumstances, contractual arrangements and actual conduct of the parties.

D. Recommended prices and resale price maintenance

A recommended price may take several forms:

The distinction between maximum and minimum pricing is particularly important. A maximum price can protect consumers against excessive downstream prices, whereas a minimum price can prevent retailers from competing through discounts.

4. Six Important Competition-Law Case Laws

The following cases provide important comparative judicial principles for interpreting recommended pricing, vertical price restrictions and indirect price coordination. They are not all Moroccan judgments; they are comparative authorities relevant to applying Morocco's competition-law framework.

Case 1: Bayer AG v Commission (2004)

Citation: Joined Cases C-2/01 P and C-3/01 P, Bayer AG v Commission.

Facts:

Bayer restricted supplies of pharmaceutical products to wholesalers in response to parallel exports from certain European countries.

The European Commission considered the conduct an anti-competitive agreement.

Legal issue:

Whether unilateral commercial conduct by a supplier could automatically constitute an agreement under competition law.

Judgment and principle:

The European Court of Justice held that an agreement requires a concurrence of wills between the parties. A unilateral policy imposed by a supplier does not automatically establish an agreement.

Relevance to recommended pricing:

A manufacturer merely communicating a suggested retail price does not necessarily establish an anti-competitive agreement. Authorities must establish evidence of acceptance, coordination or other conduct demonstrating a concurrence of wills.

Case 2: Pierre Fabre Dermo-Cosmétique (2011)

Citation: Case C-439/09, Pierre Fabre Dermo-Cosmétique SAS v Président de l'Autorité de la concurrence.

Facts:

A cosmetics manufacturer imposed restrictions requiring certain products to be sold through physical pharmacies with the presence of qualified pharmacists.

Legal issue:

Whether restrictions imposed through a selective distribution system could violate EU competition law.

Judgment and principle:

The Court held that a contractual restriction effectively prohibiting internet sales could constitute a restriction by object, subject to the applicable legal assessment.

Relevance to recommended pricing:

Distribution arrangements cannot be used as a mechanism for eliminating independent retail competition. A supplier cannot disguise restrictive commercial control as an ordinary distribution policy.

Case 3: GlaxoSmithKline Services Unlimited v Commission (2009)

Citation: Joined Cases C-501/06 P, C-513/06 P, C-515/06 P and C-519/06 P.

Facts:

GlaxoSmithKline introduced arrangements concerning the prices charged to wholesalers supplying pharmaceutical products in different European markets.

Legal issue:

Whether restrictions affecting parallel trade and pharmaceutical distribution were incompatible with competition law.

Judgment and principle:

The Court examined the restrictive effects of the arrangements and the requirements for establishing an exemption under Article 101(3) TFEU.

Relevance to recommended pricing:

Pricing policies in distribution networks must be assessed against their actual competitive effects. A supplier cannot justify restrictive pricing merely by invoking its commercial interests or distribution objectives.

Case 4: Allianz Hungária Biztosító and Others (2013)

Citation: Case C-32/11, Allianz Hungária Biztosító Zrt and Others v Gazdasági Versenyhivatal.

Facts:

Insurance companies entered into arrangements with motor vehicle dealers and repair garages concerning remuneration and commercial relationships.

Legal issue:

Whether vertical commercial arrangements could constitute restrictions of competition by object.

Judgment and principle:

The Court emphasised the need to examine the content, objectives and economic and legal context of the arrangements when determining whether they restrict competition by object.

Relevance to recommended pricing:

A recommended pricing arrangement must be assessed in its commercial context. The existence of a price recommendation alone is insufficient to establish an infringement; the surrounding agreements and conduct are important.

Case 5: Eturas UAB and Others (2016)

Citation: Case C-74/14, Eturas UAB and Others v Lietuvos Respublikos konkurencijos taryba.

Facts:

An online travel booking system circulated a communication restricting the maximum discounts that participating travel agencies could offer through the platform.

Legal issue:

Whether businesses using a common digital platform could be held responsible for participating in a concerted practice.

Judgment and principle:

The Court explained that participation in a concerted practice requires evidence of awareness and participation, although knowledge of the communication may be inferred from the circumstances, subject to the right to rebut that inference.

Relevance to recommended pricing:

Digital platforms can facilitate price coordination by circulating pricing instructions or recommendations to multiple independent retailers.

For example, a marketplace that communicates a common recommended selling price and discourages deviations may create serious competition-law concerns.

Case 6: Super Bock Bebidas (2023)

Citation: Case C-211/22, Super Bock Bebidas SA and Others v Autoridade da Concorrência.

Particularly relevant to resale price maintenance

Facts:

Super Bock communicated minimum resale prices to its distributors. The pricing arrangements were accompanied by monitoring and possible retaliatory measures, including the withdrawal of financial incentives and refusal to replenish stocks.

Legal issue:

Whether minimum resale price arrangements automatically constituted restrictions of competition by object and what evidence was required to establish an agreement.

Judgment and principle:

The Court of Justice held that a minimum resale price agreement can be treated as a restriction by object only after assessing whether it presents a sufficient degree of harm to competition, considering its terms, objectives and economic and legal context.

It also clarified that an agreement requires a concurrence of wills between the supplier and distributors.

Relevance to recommended pricing:

This is especially important because it demonstrates how a nominally recommended price can become an enforceable minimum resale price through monitoring, commercial pressure and penalties.

Case 7: Leegin Creative Leather Products, Inc. v PSKS, Inc. (2007)

Citation: 551 U.S. 877 (2007), Supreme Court of the United States.

Facts:

Leegin adopted a resale pricing policy under which retailers were expected to follow minimum resale prices for its products. It stopped supplying a retailer that discounted below the prescribed prices.

Legal issue:

Whether minimum resale price maintenance should automatically be treated as unlawful under Section 1 of the Sherman Act.

Judgment and principle:

The US Supreme Court overturned the automatic per se prohibition established by the earlier Dr. Miles decision and held that minimum resale price maintenance should be assessed under the rule of reason.

Relevance to recommended pricing:

The case illustrates that different jurisdictions approach minimum resale price maintenance differently. It also demonstrates why a genuinely voluntary recommendation must be distinguished from a supplier's enforceable pricing policy.

5. Forms of Anti-Competitive Recommended Pricing

A. Minimum recommended resale prices

A supplier recommends that distributors should not sell below a specified price.

Although described as a recommendation, it may become unlawful if distributors are pressured to comply.

Example:

A pharmaceutical manufacturer recommends that all pharmacies sell a medicine for MAD 150. Pharmacies offering it for MAD 130 are threatened with supply restrictions.

This may constitute indirect resale price maintenance.

B. Maximum recommended pricing

A manufacturer recommends a maximum selling price to protect consumers against excessive retail prices.

This is generally less restrictive than minimum resale pricing, provided retailers remain free to offer lower prices.

C. Recommended pricing through rebates

A supplier provides additional rebates to retailers that follow its recommended price.

If the rebate structure penalises retailers for discounting, it may undermine independent pricing decisions.

D. Recommended pricing through digital platforms

Online marketplaces may recommend prices through automated algorithms.

Competition concerns arise where:

Competing retailers receive identical pricing instructions.

Algorithms discourage independent discounting.

Retailers are penalised for deviating from recommended prices.

Suppliers exchange commercially sensitive pricing information.

Automated systems facilitate parallel price adjustments.

E. Recommended pricing through trade associations

Industry associations sometimes circulate recommended prices to members.

A non-binding cost benchmark may be legitimate in appropriate circumstances. However, collectively agreed selling prices or common minimum-price recommendations can constitute unlawful price coordination.

6. Economic Effects of Recommended Pricing

Recommended pricing can generate both positive and negative economic effects.

The competition authority should consider whether the arrangement genuinely improves distribution efficiency or primarily protects suppliers and distributors from competitive pressure.

7. Application to Morocco

Under Moroccan Law No. 104-12, recommended pricing should be examined principally through Articles 2, 6 and 7.

Article 2 – Freedom of prices

The general principle is that prices are freely determined by competition, subject to legally recognised exceptions.

Article 6 – Anti-competitive agreements

An agreement or concerted practice that artificially interferes with market price formation may fall within Article 6.

For example, several competing distributors agreeing to follow a common recommended minimum price could amount to prohibited coordination.

Article 7 – Abuse of dominance and economic dependence

A dominant supplier may face additional scrutiny if it uses its commercial power to force distributors to comply with recommended prices.

For instance, a dominant manufacturer might threaten to withdraw essential products from retailers that sell below its recommended price.

The Competition Council must examine the relevant market, the parties' market power, the nature of the restrictions and their actual or potential competitive effects.

The law is also subject to amendments, including Law No. 40-21.

WIPO+1

8. Recommended Pricing: Compliance and Governance Framework

Businesses operating in Morocco should establish a structured compliance framework.

Recommended contractual clause

A supplier wishing to communicate recommended prices could adopt the following clause:

The recommended resale prices communicated by the supplier are strictly indicative and non-binding. Each distributor shall independently determine its resale prices, discounts, promotional offers and other commercial conditions. The supplier shall not impose penalties, withdraw commercial benefits or restrict supplies because a distributor independently chooses to sell at a price different from the recommended resale price.

This clause should be supported by actual business conduct. Contractual wording alone cannot legalise an arrangement that is enforced in practice.

9. Hypothetical Case Study: Recommended Pricing in the Moroccan Electronics Market

Facts:

A major electronics manufacturer distributes smartphones through 40 independent retailers in Morocco.

The manufacturer communicates a recommended retail price of MAD 4,500.

Initially, retailers independently determine their prices.

Subsequently, the manufacturer introduces the following practices:

Retailers selling below MAD 4,500 lose promotional rebates.

Sales representatives monitor retailer prices.

Retailers offering discounts receive fewer product supplies.

The manufacturer circulates monthly price-compliance reports.

Retailers are encouraged to report competitors selling below the recommended price.

Legal analysis:

The arrangement raises concerns under Article 6 of Law No. 104-12 if it establishes an agreement or concerted practice restricting independent price competition.

Article 7 may also become relevant if the manufacturer abuses a dominant position or a state of economic dependence.

The Super Bock judgment provides a useful comparative framework for examining the supplier's monitoring, incentives and retaliatory measures.

Possible consequences:

Investigation by the Moroccan Competition Council.

Examination of distribution agreements.

Assessment of market power and competitive effects.

Orders to discontinue unlawful practices.

Financial penalties where the statutory conditions are satisfied.

Appropriate corrective measures.

10. Important Legal Issues for Competition Authorities

Competition authorities investigating recommended pricing should address the following questions:

Was the recommended price genuinely voluntary?

Did distributors independently determine their resale prices?

Were retailers threatened or commercially penalised for discounting?

Did the supplier monitor compliance?

Did competing suppliers coordinate their recommendations?

Did the pricing policy reduce price competition?

Did the practice exclude independent discount retailers?

Did consumers suffer from artificially increased prices?

Did the arrangement generate verifiable economic efficiencies?

Was the conduct facilitated by digital platforms or algorithms?

11. Additional Important Judicial Authority

Two further decisions help complete the comparative legal analysis.

A. Dr Miles Medical Co. v John D. Park & Sons Co. (1911), 220 U.S. 373

The US Supreme Court treated resale price maintenance as unlawful under the then-applicable per se approach. Although subsequently overruled by Leegin, the case remains historically important in understanding the development of resale price maintenance doctrine.

B. United States v Apple Inc. (2015), 791 F.3d 290 (2d Cir.)

Apple was found to have participated in a conspiracy with publishers concerning retail e-book prices.

The decision demonstrates that pricing arrangements involving intermediaries and suppliers can become unlawful where they facilitate horizontal coordination and undermine independent pricing competition.

These decisions, together with the seven cases discussed above, provide a comparative foundation for understanding recommended pricing and competition enforcement.

12. Conclusion

Recommended pricing is an important commercial instrument that can promote price transparency, assist retailers and support efficient distribution.

However, it must not become a disguised mechanism for controlling independent resale prices.

The distinction between lawful recommendations and unlawful resale price maintenance depends on the substance of the commercial relationship, the parties' intentions, the existence of an agreement, monitoring practices, retaliatory measures and competitive effects.

For Morocco, Articles 6 and 7 of Law No. 104-12 are particularly important in assessing restrictive pricing agreements and abusive conduct.

The comparative jurisprudence, especially Bayer, Pierre Fabre, Eturas and Super Bock, demonstrates that competition authorities must examine both the legal structure and practical operation of pricing arrangements.

The fundamental principle is that a supplier may recommend a price, but must not use its commercial power or contractual arrangements to deprive independent retailers of genuine freedom to determine their own resale prices.

Research note: The seven principal cases above are comparative authorities from EU and US jurisdictions, not seven reported Moroccan judgments specifically concerning recommended pricing. They should not be represented as Moroccan precedents.