Mar 27 2007
A very important consumer rule is being considered by the Supreme Court which would impact retail pricing in the US. Yesterday, in the case of Leegin Creative Leather Products Inc. v. PSKS Inc., No. 06-480, the Supreme Court heard oral arguments on whether the rule which prevents manufacturers from dictating to retailers what price a good should be sold at and when sales can occur.
Leegin sold Brighton products at a discounts that Brighton did not authorize. Brighton refused to continue to supply Leegin, arguing that Leegan violated their contract regarding resale prices. Nine West, in 2000, had to pay a $34 M fine for resale price fixing when it tried to proscribe when a sale could occur on its products and for what price.
To do away with the rule against resale price fixing is bad for the consumer. Publishers could set minimum resale prices for books, like Harry Potter, at a certain price and booksellers, per the agreement, would not be able to discount the books. Changing the rule is not good for the consumer.