Edited by Josef Drexl, Warren S. Grimes, Clifford A. Jones, Rudolph J.R. Peritz and Edward T. Swaine
Chapter 5: Resale Price Maintenance: A Reassessment of its Competitive Harms and Benefits
5. Resale price maintenance: A reassessment of its competitive harms and benefits Marina Lao* INTRODUCTION 1 In a sharply divided five to four decision in Leegin Creative Products, Inc. v PSKS, Inc.,1 the US Supreme Court in 2007 overruled the nearly century-old precedent of Dr. Miles2 to end per se condemnation of resale price maintenance (RPM)3 in favor of a rule of reason analysis. But the case has hardly settled the debate on the economics of, or the appropriate legal treatment for, RPM. While some commentators view RPM as often procompetitive and Leegin as long overdue,4 others disagree with the majority’s decision.5 Indeed, bills were introduced in Congress to * I would like to thank Josef Drexl, Warren Grimes, Rudolph Peritz, Robert Steiner, Charles Sullivan and participants in the 2009 ASCOLA conference for helpful comments. Thanks are also due to Eric Wolf and especially Nicholas Dimakos (Seton Hall, Class of 2011) for excellent research assistance. 1 551 US 877, 127 S Ct 2705 (2007). 2 Dr. Miles Med. Co. v John D. Park & Sons Co., 220 US 373 (1911). 3 For convenience, unless otherwise specified, I use the term RPM without the qualifier ‘minimum’ to refer only to minimum resale price maintenance (not maximum RPM), since minimum RPM is the focus of this chapter. 4 See, e.g., B Klein, ‘Competitive Resale Price Maintenance in the Absence of Free-Riding’ (2009) 76 Antitrust LJ 431; JD Wright, ‘Overshot the Mark? A Simple Explanation of the Chicago School’s Influence on Antitrust’...
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