Legal Briefs Podcast: Building a MAP Enforcement Strategy That Doesn't Box You In

Three strikes and you're out is a fine internal enforcement plan, until you write it into your MAP policy and lose the flexibility to handle the one violation that doesn't fit the mold. Jeremy Richardson explains the distinction.

The standard MAP enforcement playbook (citation, final warning, suspension or termination) works well for most brands. The mistake, according to Jeremy Richardson, is writing that three-strike sequence directly into the MAP policy itself. Do that, and a brand loses the flexibility to jump straight to termination when a violation is egregious enough to warrant it, or to treat a first-time, minor infraction more leniently than the policy technically allows.

The episode works through the practical edge cases: automated violation-notice systems are a huge efficiency win, but once that first email promises a retailer 30 days to fix something, the brand has effectively committed to honoring that window in nearly every case. And any enforcement step that goes beyond a simple stop-selling decision (changing payment terms, pulling discounts, downgrading tier status) needs a look from local counsel first, since those steps carry their own legal exposure depending on jurisdiction.

• Keep the strike sequence internal, not written into the MAP policy: flexibility to skip a step for an egregious violation is worth more than predictability for retailers.
• Automated systems are efficient but reduce flexibility once the first notice sets a timeline, since that promise generally needs to be honored.
• Graduated consequences beyond a stop-sell decision (losing terms, discounts, tier status) should be reviewed by counsel in each relevant jurisdiction before being built into an enforcement plan.
• The guiding principle: reserve the right to respond to violations "as the company sees fit," rather than committing to a rigid, publicly-stated formula.

Full Episode Transcript

[00:00] Welcome to MapTrap's Legal Briefs, the podcast where we explore specific strategies and tactics used by brands to protect their pricing, distribution, and intellectual property. The information in this podcast is provided for general informational purposes only. It is not legal advice. Listening to this podcast does not create an attorney-client relationship between you and MapTrap's guest presenters. Listeners should seek legal advice from a lawyer licensed in the listener's state.

[00:27] Hi, and welcome to another episode of Legal Briefs, MapTrap podcast with Jeremy Richardson and Ron Solomon, where we talk about brand protection strategies for consumer brand manufacturers. And today's topic is map enforcement strategies. So we know what minimum advertised price policies are from some of our other podcasts. But when we talk about the enforcement strategy over the years, standard practice has been that a brand have a three strike plan. Typically a three strike plan is going to be on the first incident of a map violation. There would be a citation. And then when they violate again, there would be a final warning. Of course, the third infraction would be that the retailer is suspended or terminated from being able to purchase the brand's products. Jeremy, what do you feel is the best and most effective strategy for a brand to use with their map strategy and their enforcement?

[01:34] Hi, Ron. Thanks for having me back. Another exciting, interesting topic here involving minimum advertised price policies and how do we enforce them?

[01:42] So I don't have any strong objection to having a three strike policy, but I do not like the idea of having that expressly built into your minimum advertised price policy. I think it becomes too rigid when a brand or manufacturer builds into its minimum advertised price policy, how it's going to enforce the policy. I think it gives a company far more flexibility not to have it written in there. And if internally it wants to have a warning letter, initial suspension, and then cut off for first, second, and third violation, that's fine. But again, I wouldn't build it in so rigidly that there's something in the policy that the company must follow in all situations because situations are different. I guess what you're suggesting is that don't say it, but do it strategy. So don't tell a graph what you're going to do to the retailer. But would it be okay to you suppose for a brand to have a separate enforcement strategy against one class of seller, say Amazon, you're going to give them three warnings, but then a brick and mortar, you're only going to give two warnings?

[02:57] I'm not sure again, I'm not sure that I'd be so rigid in how I want to set up my enforcement of the minimum advertised price policy. I think companies need the half flexibility because there are violations that are of different levels. If you have a retailer who is just totally violating the policy advertising well below the minimum advertised price across the board on all of your products, bundling your products with other brands doing things that really violate the spirit significantly violate the spirit of the minimum advertised price policy. If you want to say first time out, want to say you're done or not selling you anymore, bye bye. So to have this rigid warning letter suspension cut off, one, two, three, wouldn't fit that situation. Again, I also wouldn't want to have the policy so rigid that you apply one set of standards to one type of retailer and a different set of standards to another type of retailer. You may choose to do that because there may be a legitimate business reason to act differently from one to the other in different situations. But I wouldn't write that out, build it into a written set of procedures that rigidly must be followed. Another quick question on this topic is in another podcast, you recommended that a brand not include what their enforcement strategy is in the actual policy itself. So if they're adopting a three strike policy that that's just an internal thing. And as you're saying here that it should be flexible, but that they not telegraph that because maybe it locks them in. But would they want to include that in this particular email sequence?

[04:34] So first warning is this is your first incidents of a map violation. If you have X days to get it together or you will receive a second notice, I think that would be okay to have an email which says we're putting you on notice and you must fix this within 30 days. And if you don't, you're going to get you're going to be escalated to the next step. But again, that creates some rigidity within the enforcement system. It would be, in my opinion, better to keep this as an internal policy and have the flexibility to send out that first warning. But perhaps to skip a step if the violation is incredibly egregious. What if a brand is using an automated system to generate and send out violation notices because they don't have the internal resources say to handle these types of exceptions. Those automated systems create a lot of efficiency for manufacturers and for brands. So there's definitely a real upside there. It may create a little less flexibility in that if the first email says you have 30 days to correct this, then you really have to give them 30 days to correct this. And in most cases, I think that's completely fine. It's only in the rare case where a violation is super egregious. And it so puts the manufacturer, the brand owner out of sorts that they want to jump immediately to step three or maybe to step two. I think that's the rare instance. Again, I think an automated system does create a tremendous amount of efficiency for brand owners. It's sort of a set it and let it do its thing. Okay. And as a final question on this topic, do you recommend warnings within a cutoff versus graduated cutoffs. So one warning and then the second time is they lose terms. And then the next time they lose any types of discounts that they may have gotten. And then a third time they're suspended from the line level and then the fourth time they're suspended from the entire company. Then I think you, I think the manufacturer, the brand owner wants to check with their local attorneys that each of those steps is legal under their jurisdiction, changing terms or taking away discounts may or may not be appropriate and may or may not be lawful. So quick caution there. I would not put that in your written map policy that you send out to retailers because again, that locks you into a particular system, a particular enforcement plan. And I prefer my clients to have flexibility to to react to situations appropriately. And that may be differently. Okay.

[07:27] Well, I think that that covers some of the questions we had on map enforcement strategy. And Jeremy, as always, thank you very much. And you have a great day.

[07:37] Thanks. Great to be here. Talk to you later. If you'd like to submit a question or topic for a legal briefs podcast, email them to legal briefs at map trap.com. For more information about how map trap can help you with your online brand protection needs, visit www.maptrap.com.