Retail Pricing Decision
The U.S.Supreme Court decided in favor of Commerce-based accessories maker Leegin Creative Leather Products, makers of Brighton Accessories, in its lawsuit against Texas retailer PSKS Inc. The case hinged on whether Leegin could require its retailers adhere to Leegin’s suggested retail prices. The accessories maker argued that offering added customer service and maintaining a policy of charging full prices, known as “resale price maintenance agreements,” are its points of difference in a competitive market. PSKS argued that Leegin’s policy of selling only to retailers that comply with its suggested retail prices is a violation of the Sherman Antitrust Act of 1890. The 5–4 Supreme Court ruling overturns a 96-year-old law that said it is always unlawful for manufacturers and retailers to establish a minimum resale price for goods. Consumer-rights groups argued that overturning the original ruling will result in higher retail prices. Resale-price maintenance agreements can still be deemed an antitrust violation but only if the company’s brand holds a near monopoly over the market.
