Why the Silence on Vertical Price Restraints?

R. MarK McCareins, General Counsel, Metals Service Center Institute, USA

Despite pronouncements that a ’New Wave” of antitrust enforcement is underway, the Federal Trade Commission (’FTC”) and the Antitrust Division of the Department of Justice (’DOJ”) have exercised collective silence with regard to resale price maintenance (’RPM”). When the Supreme Court in Leegin Creative Leather Prods. v. PSKS, Inc. radically altered the Sherman Act Section 1 landscape on resale price maintenance (’RPM”) by abandoning the per se test used in Monsanto Co. v. Spray-Rite Serv. Corp., the expectation was that this relaxed rule would allow manufacturers more leeway with respect to dealing with free riders and promoting goodwill and brand integrity. But since the Leegin decision in 2007, there has not been a surplus of empirical evidence presented as to whether these purported procompetitive benefits have actually transpired. Many of the States, however, have taken matters into their own hands, with or without any empirical data to support their views, to legislatively and prosecutorialy recast such claims as being subject to per se treatment in their respective jurisdictions. Meanwhile, antitrust counselors and their business clients have been left in a quandary in an attempt to maneuver the national patchwork of RPM (and minimum advertised price policies (’MAP”)) laws and decisions. While the FTC and DOJ have been quite prolific over the last two years in announcing their views on a wide variety of topics, some clarification in the area of RPM and MAP enforcement would be welcomed guidance by antitrust practitioners.

R. Mark McCareins is the general counsel of the Metals Service Center Institute (www.msci.org). He also is a Clinical Professor in the Strategy Department of Northwestern University’s Kellogg Graduate School of Management where he teaches antitrust and business law. He practiced competition law with Winston and Strawn LLP for over thirty years where he was co-counsel for Respondent Spray-Rite Service Corp. in the referenced matter. He currently is a Clinical Professor in the Strategy Department at Kellogg.

The Metals Service Center Institute ( www.msci.org) is the premier metals trade association in North America with nearly 300 members. MSCI is a leader in executive education and thought leadership for the metals industry.