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Leegin and the Economics of Resale Price Maintenance

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  • Howard P. Marvel

    (The Ohio State University)

Abstract

When the U.S. Supreme Court overturned its century-old precedent that treated resale price maintenance (RPM) as a per se violation of the antitrust laws, it signaled approval for the vertical restraint’s widespread use. But the increased use of RPM occurred under a pre-existing rule that permitted RPM as long as no formal agreement over price was reached. This paper documents not only the increased use of RPM post Leegin but also the importance of avoiding the appearance of agreements to control resale prices. The paper then discusses how plaintiffs, previously enamored of claims of RPM, are now recasting vertical RPM arrangements as ancillary to horizontal agreements among distributors that are made effective though enforcement by producers.

Suggested Citation

  • Howard P. Marvel, 2017. "Leegin and the Economics of Resale Price Maintenance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(2), pages 221-244, March.
    • Handle: RePEc:kap:revind:v:50:y:2017:i:2:d:10.1007_s11151-017-9570-3
    DOI: 10.1007/s11151-017-9570-3
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    References listed on IDEAS

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