• Supreme Court Holds Minimum Resale Price Maintenance No Longer Automatically Illegal Under Federal Antitrust Laws.
  • July 9, 2007 | Authors: Donald M. Barnes; Alan R. Malasky; Salvatore A. Romano
  • Law Firm: Porter Wright Morris & Arthur LLP - Washington Office
  • Overturning a nearly 100-year-old precedent, and continuing a 30-year trend of limiting the types of business conduct that will be deemed automatically unlawful under the antitrust laws, the Supreme Court has ruled that agreements requiring retailers to adhere to a manufacturer's minimum resale prices are no longer per se illegal, and should be evaluated under the rule of reason. The Court's majority held that the per se rule, which until 1977 applied to all vertical restraints -- price and non-price alike -- should be reserved for the most egregious anticompetitive conduct among competitors. Because minimum resale price maintenance may have legitimate business justifications and potential procompetitive effects, the Court could not conclude that such arrangements "always or almost always tend to restrict competition and decrease output," at least insofar as inter-brand competition (the protection of which is the primary purpose of the antitrust laws) is concerned.