House Introduces Bill To Reinstall Per Se Rule Against Resale Price Maintenance
By Jason Hicks
On Monday, July 13, 2009, the Discount Pricing Consumer Protection Act of 2009, H.R. 3190, was introduced in the House of Representatives. The bill would essentially overturn the Supreme Court's 2007 decision in Leegin Creative Leather Products v. PSKS, Inc., 127 S.Ct. 2705 (2007). In that decision, the Court held that minimum vertical price fixing was not per se illegal and rather should be analyzed under the Rule of Reason.
Many thought that the Leegin decision would open the doors for manufacturers to enter into price fixing agreements with their distributors and retailers. Leegin's effect, however, has been muted due to the possibility that the per se rule would still apply under certain state antitrust laws and that Congress would legislatively "overrule" Leegin.
The Discount Pricing Consumer Protection Act would reinstate the per se rule against resale price maintenance agreements in federal court. Importantly, however, Colgate policies would still be lawful under existing Supreme Court precedent. (In a Colgate policy, a manufacturer unilaterally announces that it will not do business with a retailer that sells its products below a certain level. Properly written and implemented, these policies are not illegal under antitrust law because there is no concerted action.).
A similar bill has been introduced in the Senate. The House version was sponsored by Henry Johnson, D-Ga. and Co-Sponsored by Rep. John Conyers, D-MI. The bill has been referred to the House Judiciary Committee.
Many thought that the Leegin decision would open the doors for manufacturers to enter into price fixing agreements with their distributors and retailers. Leegin's effect, however, has been muted due to the possibility that the per se rule would still apply under certain state antitrust laws and that Congress would legislatively "overrule" Leegin.
The Discount Pricing Consumer Protection Act would reinstate the per se rule against resale price maintenance agreements in federal court. Importantly, however, Colgate policies would still be lawful under existing Supreme Court precedent. (In a Colgate policy, a manufacturer unilaterally announces that it will not do business with a retailer that sells its products below a certain level. Properly written and implemented, these policies are not illegal under antitrust law because there is no concerted action.).
A similar bill has been introduced in the Senate. The House version was sponsored by Henry Johnson, D-Ga. and Co-Sponsored by Rep. John Conyers, D-MI. The bill has been referred to the House Judiciary Committee.
