First Do No Harm: The Discount Protection Consumer Protection Act And The Potential Procompetitive Effects Of Resale Price Maintenance
Few antitrust decisions of the Supreme Court have evoked the rhetorical intensity of Leegin Creative Leather Products, Inc. v. PSKS, Inc. ("Leegin"), in which the Supreme Court held that minimum resale price maintenance should be judged under a rule-of-reason rather than a per se standard.1 Senator Herb Kohl has asserted that "[o]ur experience since the Leegin decision is giving credence to ? fears [that it would imperil discount shopping that consumers have learned to take for granted], and it comes at exactly the wrong time - just as millions of consumer face a serious recession and depend on bargain shopping more than ever to balance the family budget."2 Federal Trade Commissioner Pamela Jones Harbour has stated that, "[i]n these tough economic times, it is especially wrong to saddle consumers with higher prices for daily necessities, with no countervailing benefits." 3 Thirty-five state attorneys general have urged Congress to repeal the holding of Leegin on the ground that "[a]dvocates of RPM have failed to produce any empirical evidence to show that minimum RPM agreements provide consumer benefits that offset these higher consumer prices."4 Questions regarding Leegin even made their way into the recent confirmation hearing for Judge Sonia Sotomayor.5
Certainly Leegin involved the rejection of a longstanding precedent.
But, contrary to the rhetoric surrounding the decision, it represents neither a radical change in substantive antitrust law nor a rejection of common sense economics. Rather, Leegin simply demonstrates a skepticism toward per se rules that has existed for decades, and a willingness to evaluate precedent in light of evolving economic understandings.
Notwithstanding the rhetoric surrounding Leegin, if minimum resale price sometimes has procompetitive effects, repealing its holding then will harm consumers in those circumstances when its use is procompetitive. Because the evidence is substantial and convincing that resale price maintenance in at least some circumstances has precompetitive effects, legislation which would reimpose a per se rule of illegality would harm rather than benefit consumers.