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High court allows price-fixing by manufacturers
Law Center |
2007/06/29 08:48
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| Manufacturers may set a fixed price for their products and forbid retailers from offering discounts, the Supreme Court said yesterday, overturning a nearly century-old rule of antitrust law that prohibited retail price fixing. The 5-4 ruling may be felt by shoppers, including those who buy on the Internet. It permits manufacturers to adopt and enforce what lawyers called "resale price maintenance agreements" that forbid discounting. Until yesterday, the nation has had an unusually competitive retail market, in part because antitrust laws made it illegal for sellers or manufacturers to agree on fixed prices. The Supreme Court, in a 1911 case involving a Dr. Miles and his patented medicines, had said that price-fixing agreements between manufacturers and retail sellers were flatly illegal. The rule's practical effect was to discourage a manufacturer from setting a price -- leading, for instance, to stickers on new cars that list the "manufacturer's suggested retail price." However, in yesterday's opinion, the high court described this rule as out of step with modern economics. |
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