Antitrust Article: RDA: Boon and Bane
6/25/2005
Written by Mintz Levin attorneys, Yee Wah Chin and Kathryn E. Walsh for the PBAA 19th Annual Convention.
One of the central facts of life for a magazine publisher is retail display allowances, RDA. What type of support will the publisher provide to retailers to display the publisher's magazines? Most commonly, publishers will provide as RDA a percentage of cover price for each copy sold. Sometimes, the RDA is in the form of display racks and other marketing tools. Other RDA formulas take into account the percentage of the retailer's shelf space devoted to the publisher's magazines, or how the magazines are displayed.
In each case, RDAs raise business and legal issues. From the business perspective, RDAs can enable retailers to provide more or more sophisticated marketing than they otherwise could, and it can ensure the publisher better retailing of its magazines. The business challenge may be one of designing a program that is effective and economic. From the legal perspective, there is the Robinson-Patman Act, which requires publishers to be very careful how their RDA programs are designed and implemented. We focus here on the legal issues.
Kate is an associate in the Federal Section, practicing in the Washington, D.C. office. Her expertise includes both regulatory and litigation representation in relation to antitrust matters.
Yee Wah is Senior Counsel in the Washington, D.C. office, practicing in the Federal Section. She has extensive experience in antitrust matters, in addition to commercial litigation and transactional counseling.
