- Gentlemen, start your drones: Judge’s ruling opens door for commercial use
- Soldier who hid, bragged about not saluting flag to be punished — in secret
- ‘Maverick’ of the seas: ‘Top Gun’ school for U.S. ship officers to launch
- Putin declares Sochi Paralympics open amid Ukrainian protest
- ‘In Jesus name, we pray’ sparks ire at Ohio council meeting
- Navy’s first laser weapon ready for prime time; drone killer to deploy this summer
- Billionaire backer: Rick Santorum ‘needs to be heard’ in 2016
- Obamacare fallout: 49 percent pessimistic; 45 percent ‘scared’
- DHS accused of holding U.S. citizen at airport, using emails to pry into her sex life
- Seattle socialist: Minimum-wage discussion skewed by ‘right-wing’ GAO analysis
Court approves price floors
The Supreme Court yesterday ruled that a manufacturer can tell a store owner that it can’t sell its goods for less than a minimum price, overturning nearly a century of antitrust law.
The court, in a 5-4 ruling, said price minimums are legal if they encourage competition and that the existing blanket ban on price fixing was too rigid and did not help competition.
“It is a flawed antitrust doctrine that serves the interests of lawyers — by creating legal distinctions that operate as traps for the unwary — more than the interests of consumers,” said Justice Anthony M. Kennedy in the majority opinion, joined by Justices Samuel A. Alito Jr., Clarence Thomas, Antonin Scalia and Chief Justice John G. Roberts Jr.
Allowing manufacturers control over minimum prices can increase competition between brands, the court said.
Justice Kennedy, in his opinion, said high-end and independent retailers were hurt under previous practice. High-end retailers, such as purse companies, build a reputation for their brand by providing extra service to customers, such as extra attention from salespeople in the store. Discount stores are able to sell the image of that brand without the cost, he argued.
Luxury brands thrive on being exclusive, meaning they wouldn’t want their products sitting on a 50 percent off shelf with the likes of generic products.
The ruling could have broad implications for shoppers as manufacturers establish if they are going to use price floors and to what extent they would enforce them with retailers.
“We do have empirical evidence, though, don’t we, that the decision of this case is going to be very significant in the sort of battle between Wal-Mart and the Main Street stores,” Justice David H. Souter said during oral arguments in March.
“The only safe predictions to make about today’s decision are that it will likely raise the price of goods at retail and that it will create considerable legal turbulence as lower courts seek to develop workable principles,” Justice Breyer wrote in the dissent.
But the ruling dismissed concerns that manufacturers would abuse the system and set prices high.
“A manufacturer has no incentive to overcompensate retailers with unjustified margins,” Justice Kennedy wrote. “The retailers, not the manufacturer, gain from higher retail prices.”
The suit began in Georgetown, Texas. Kay’s Kloset, which is owned by PSKS Inc., had been selling Leegin Creative Leather goods in its stores. Leegin wanted to attract higher-end customers and began demanding retailers sell their goods above a set price. Kay’s Kloset didn’t obey and sold the goods for less.
Leegin pulled its products from Kay’s shelves.
The Fifth Circuit U.S. Court of Appeals initially ruled for Kay and had awarded the retailer damages of $3.6 million.
Taxpayers must pay the freight for over-budget train projects
- Kim Jong-un calls for execution of 33 Christians
- Rand Paul wins 2014 CPAC straw poll, Ted Cruz finishes a distant second
- SAUERBREY: Taxing Marylanders until they flee
- 'Blarney Blowout' near UMass results in 73 arrests; 4 officers injured
- Bill Clinton cashes in on struggling nonprofit hospital
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- Vietnam says it may have found door of missing Malaysian jet as intel look into stolen passports
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- CPAC 2014 straw poll results
- Obama engages in Ukraine diplomacy from Fla. resort as Russia digs in
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again