Most Favored Customer Clauses in Online Retail: Best Price or Bad Deal?

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Samir Gandhi, Rahul Rai, Hemangini Dadwal, May 15, 2015

Unlike brick and mortar retailers, or traditional individual purchasers, online trading platforms have the inherent ability to monitor and ensure compliance with MFC conditions. The rather prohibitive cost of monitoring compliance for traditional physical retailers has meant that MFC conditions, even if negotiated, might not necessarily have been complied with. In contrast, monitoring prices for online retail sales is easier and perhaps much cheaper. Accordingly, MFC conditions are gaining currency in the field of online retail sales. In this article, we seek to examine the applicability of antitrust rules to MFC conditions, specifically in the context of online retail and its implications in India.

 

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