Question

The company Furniture A/S produces a very well known chair which is sold all over Europe.

Would it be legal for the company to set recommended sales prices that are in fact binding to its customers?

Answer 1

A chair which is produced by the company is a very well known chair in the whole Europe. Without a recommended price, it can be sold to the customers at a very high price and consumers could be cheated by the sellers. Without a fixed recommended price, sellers can charge different prices from different customers based on their paying potential which is very unfair for the customers. Instead of getting cheated by the sellers, customers might like the idea of fixed recommended price which is infact binding on them. This way, sellers would not be able to charge different prices from the purchasers and a uniform price all over the Europe will prevail.

Though, to promote it's product after a recommended sales price, sellers can give discounts to the consumers depending upon the supply and demand of the product. But a fixed sales price is always appreciated by the consumer as it gives the confidence to the buyer that he is not being cheated upon. It gives the confidence to the buy that he or she is paying a fair price of the product and is paying same amount as every other consumer. It ensures the buyer that he or she is not paying extra for the product in any means.