Manufacturers may set a fixed price for their products and forbid retailers from offering discounts, the Supreme Court said today, overturning a nearly century-old rule of antitrust law that prohibited retail price fixing.The 5-4 ruling may be felt by shoppers, including those who buy on the Internet. It permits manufacturers to adopt and enforce what lawyers called "resale price maintenance agreements" that forbid discounting.
Until today, the nation has had an unusually competitive retail market, in part because antitrust laws made it illegal for sellers or manufacturers to agree on fixed prices. The Supreme Court, in a 1911 case involving Dr. Miles and his patented medicines, had said that price-fixing agreements between manufacturers and retail sellers were flatly illegal.
The rule's practical effect was to discourage a manufacturer from setting a price, leading, for instance, to stickers on the windows of new cars that list the "manufacturer's suggested retail price."
However, in today's opinion, the high court described this rule as outdated and out of step with modern economics.
Manufacturers of products ranging from watches and computers to golf clubs and tennis rackets compete with other brands, so competition will not suffer, the court majority said. Moreover, manufacturers should be free to control how their products will be marketed and sold, it said.
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