Connecticut AG Statement On High Court Ruling Ending Century-Old Antitrust Protection

June 28, 2007 -- Connecticut Attorney General Richard Blumenthal said he is greatly disappointed and has significant concerns about a U.S. Supreme Court ruling today that strikes a 96-year-old antitrust rule that made it an automatic antitrust violation for manufacturers to require retailers to agree to minimum resale prices for their products.

Despite a 1911 high court ruling to that effect, the Supreme Court today - in a 5-4 vote - overturned the earlier ruling, saying such minimum price agreements between manufacturers and retailers are not always detrimental to consumers, requiring plaintiffs to prove the anticompetitive effects on a case by case basis.

This latest case, Leegin v. PSKS, Inc., resulted after a retailer alleged that Leegin Creative Leather Products' no-discount policy violated antitrust laws by insisting retailers sold the company's handbags at certain minimum prices. The retailer won in the lower courts, but the high court reversed the ruling.

Blumenthal, who filed an amicus brief supporting the 96-year-old antitrust law, said today's decision eliminates a vital antitrust protection, potentially jeopardizing discounters and ultimately consumers who will pay higher prices for products. He said his office will monitor the marketplace, and take action to protect consumers, if necessary.

"Discounters became an endangered species as a result of this misguided ruling," Blumenthal said. "The law has changed dramatically and historically to the detriment of consumers . The evidentiary standards for challenging vertical price fixing are now higher and cases will be far more difficult to enforce. As a result, the retail landscape will be dramatically changed for consumers - for the worse. If a situation arises and the facts warrant, we will still take action."

Source: Connecticut Attorney General