Leegin and the Economics of Resale Price Maintenance
Howard P. Marvel
Published online: 7 February 2017
Ó Springer Science+Business Media New York 2017
Abstract When the U.S. Supreme Court overturned its century-old precedent that
treated resale price maintenance (RPM) as a per se violation of the antitrust laws, it
signaled approval for the vertical restraint’s widespread use. But the increased use
of RPM occurred under a pre-existing rule that permitted RPM as long as no formal
agreement over price was reached. This paper documents not only the increased use
of RPM post Leegin but also the importance of avoiding the appearance of agree-
ments to control resale prices. The paper then discusses how plaintiffs, previously
enamored of claims of RPM, are now recasting vertical RPM arrangements as
ancillary to horizontal agreements among distributors that are made effective though
enforcement by producers.
Keywords Resale price maintenance Á Vertical restraints Á Antitrust
A decade ago, the U.S. Supreme Court overturned a nearly century-old precedent
when it issued its Leegin opinion.
The overturned precedent, Dr. Miles,
assigned resale price maintenance (RPM) to the class of contractual restraints that
are treated as per se illegal.
& Howard P. Marvel
Professor Emeritus, Department of Economics, The Ohio State University, 1945 North High
Street, Columbus, OH 43210, USA
Leegin Creative Leather Prods. v. PSKS, Inc., 551 U.S. 877 (2007).
Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911).
Rev Ind Organ (2017) 50:221–244