The ‘Supremes’ Help Solve Profitability Problems
Did the Supreme Court in its infinite wisdom suddenly give the consumer electronics and appliance industries a license to make a profit? Could it be that the Divine Nine knew that by striking down a century-long statute against resale price maintenance they’d be helping to drive some sanity to this industry? Did they think we really wouldn’t be better off slashing prices so low that we’ve been described as a business of profitless prosperity? And what will we do with our new-found rights?
In the landmark Leegin Creative Leather Products, Inc. v. PSKS, Inc. case, the Court found that agreements between a manufacturer and a reseller that set the minimum price for which the manufacturer’s goods could be sold are no longer always illegal. The decision suggests that the “rule of reason” should be applied to determine whether or not a supplier’s pricing practices are illegal. Previous anti-trust rulings made it difficult for vendors to enforce most MAP pricing schemes.
The dissenting Justices expressed fear that the new ruling may increase retail prices. Let’s hope they’re right.