The meaning of vertical restraints

A vertical restraint is a restriction imposed by manufacturers or wholesalers on those to whom they sell their products. We are subject to such restraints more often than we think. The publishers of most books sold in the UK attempt to impose three vertical restraints. One is a requirement that ‘no part of this publication may be reproduced or transmitted, in any form or by any means, without permission’. It limits the use which the owner may make of the book he has purchased: he may not reproduce or transmit it in any form or by any means.

Another is that the book is sold subject to the standard conditions of the Net Book Agreement. The most important of these conditions prohibits a retailer from selling the book at a price other than that fixed by the publisher. Books are one of the small number of commodities which may legally be subject to this resale price maintenance, as a result of a ruling in 1962 that the net book agreement – an agreement registered under the Restrictive Practices Act – was in the public interest.

A third restraint prohibits the purchaser from rebinding the paperback edition in hard covers.