Resale Price Maintenance and the Tenth Anniversary
Kenneth G. Elzinga
Published online: 7 February 2017
Ó Springer Science+Business Media New York 2017
Keywords Resale price maintenance Á Antitrust
On July 30, 2007, the Supreme Court issued an antitrust opinion that now is often
simply called Leegin.
The tenth anniversary of this opinion warrants a scholarly
anniversary, because Leegin did not merely alter antitrust policy—it caused a 180°
reversal of one of the Court’s most venerable antitrust precedents. After the Court’s
1911 decision in Dr. Miles Medical, resale price maintenance (RPM) was per se
illegal. Because of Leegin, RPM is now assessed under a rule of reason.
Between Dr. Miles Medical and Leegin, there were three breaches in the Court’s
stark rejection of RPM. In 1919, the Court issued what came to be called the
‘‘Colgate Doctrine,’’ under which a seller could attempt to implement and enforce
an RPM strategy by refusing to deal with a downstream vendor who sold at a price
below the level that was stipulated by the seller (so long as there was no agreement
between the seller and buyer on this price).
In addition, for almost 40 years
Congress allowed states to permit RPM under what was often called ‘‘Fair Trade’’.
Another breach in the per se rule occurred when the Court held that the per se
& Kenneth G. Elzinga
Department of Economics, University of Virginia, PO Box 400182, McCormick Road,
Charlottesville, VA 22904, USA
Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007).
See United States v. Colgate & Co., 250 U.S. 300 (1919).
See Encyclopedia Britannica (2007) for more details.
Rev Ind Organ (2017) 50:129–131