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State Enforcement of Resale Price Maintenance Prohibitions After Leegin: Policy Without Principle

David Olsky, Jan 29, 2010

Over the past three years, certain state attorneys general have spoken out strongly against Resale Price Maintenance (“RPM”) practices, upset with the Supreme Court decision in Leegin. Citing their own state laws, these state enforcers have insisted that the per se prohibitions on RPM that existed prior to Leegin still exist within their respective states. Officials from the Antitrust Bureau for the New York Attorney General have also asserted that under federal law, courts should apply a “quick look” or otherwise truncated rule of reason.

The recent settlement of an RPM claim against Herman Miller furniture underlines that the state attorneys general are not just saber rattling. Federal officials from the new administration have indicated varying levels of approval of these efforts, with Assistant Attorney General Christine Varney setting forth suggested guidance to state enforcement efforts regarding how to challenge RPM under the rule of reason regime.

This leads one to the question of the purpose for these efforts. That is, what is the policy rationale for focusing on bringing cases that would push the boundaries of antitrust law on RPM? Are there genuine policy concerns about RPM that would justify, say, a diversion of even a fraction of the efforts needed to monitor and prevent potential bid rigging among local service providers?

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