Resale Price Maintenance and Collusion in Two-Sided Markets

DOI: https://doi.org/10.62517/jbm.202509410

Author(s)

Weihua Pan1,2, Hang Cao3,*, Yuan Zhu1

Affiliation(s)

1School of Law and Business, Shangrao Normal University, Shangrao, China 2School of Foreign Studies and Trade,Hubei University of Automotive Technology, Shiyan, China 3School of Business Administration, Jiangxi University of Finance and Economics, Nanchang, China *Corresponding Author

Abstract

This paper investigates how RPM affects the collusion decision in two-sided market. This study indicates that duopoly platforms can adopt RPM and explores the relationship between RPM and collusion. This research concludes that (i) RPM consistently reduces retail-end prices, increases platform profits, and enhances consumer utility and social welfare; (ii) collusion uniformly raises retail-end prices and boosts platform profits but diminishes consumer utility and social welfare; (iii) RPM exerts differential effects on profit margins: under weak network effects, RPM amplifies collusion-driven profit differentials by lowering prices, whereas under strong network effects, RPM reduces retail-end prices while negatively impacting direct-end profits, thereby shrinking collusion-induced profit differentials. Consequently, this study proposes classifying RPM based on network effect thresholds: when network effects are weak, RPM is more likely to harm competition and should be subject to per se illegality; when network effects are strong, RPM holds potential procompetitive benefits and should be governed by the rule of reason. This framework aligns antitrust enforcement with the dual role of RPM in platform markets, balancing competitive risks against efficiency gains.

Keywords

Resale Price Maintenance; Collusion; Platform; Two-Sided Markets

References

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