Monday, November 05, 2007

Kohl introduces bill to overturn Leegin

Senator Herb Kohl of Wisconsin (yes, that Kohl) introduced a bill to overturn the Supreme Court's recent Leegin decision. We reported on Leegin here -- the decision changed retail price maintenance regulation from "per se" to "rule of reason":
The ruling, in the case of Leegin v. PSKS, overrides the Court’s 1911 Dr. Miles decision, which had established a per se standard in vertical price maintenance cases, and replaces it with a rule-of-reason standard. Translated from the legalese, this means that under the Dr. Miles standard, any manufacturer-imposed price plan was a violation of the Sherman Act, but now such a plan is a violation only if it can be proven to have anti-competitive effects.
The case has generated more interest than the norm for antitrust decisions (admittedly, not a very high standard). My own guess is that it will not have a very wide effect, since it probably will only allow MSRP to be applied by manufacturers with no market power (had you ever heard of Leegin before this case?)

Nonetheless, Kohl wants to overturn the decision. From his press release:
"In the last few decades, millions of consumers have benefited from an explosion of retail competition from new large discounters in virtually every product, from clothing to electronics to groceries, in both 'big box' stores and on the Internet. Our legislation will correct the Supreme Court's abrupt change to antitrust law, and will ensure that today's vibrant competitive retail marketplace and the savings gained by American consumers from discounting will not be jeopardized by the abolition of the ban on vertical price fixing," Kohl said.
I'm guessing this won't get far until 2009 at the earliest, and that it won't make much difference either way.

1 comment:

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