Resale price maintenance (RPM) is a channel pricing strategy that restricts the price below which a reseller may sell a manufacturer’s product. More than $300 billion in U.S. sales are affected annually by RPM agreements. Adopting a marketing perspective and analyzing trends in distribution arrangements and marketing channel systems, the authors offer predictions regarding the antitrust treatment of RPM following the Supreme Court’s decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007). This research furthers the understanding of the role of the prior Colgate doctrine in establishing the existence of an RPM agreement and the impact of the new Leegin factors for assessing the competitive effects of RPM. Implications for stakeholders affected by RPM and related unilateral price policies are discussed.
AchrolRavi S.KotlerPhilip (1999), “Marketing in the Network Economy,” Journal of Marketing63 (4), 146–63.
2.
AdamsRonald J. (2011), “A Brief Review and Assessment of the Leegin Decision: Who Wins and Who Loses When Manufacturers Are Free to Set Retail Prices?” Business and Society Review, 116 (2), 213–36.
AreedaPhillip E.HovenkampHerbert (2006), Antitrust Law. New York: Aspen.
6.
ArndtJohan (1979), “Toward a Concept of Domesticated Markets,” Journal of Marketing, 43 (4), 69–75.
7.
BehoteguyW.C. (1949), “Resale Price Maintenance in the Tire Industry,” Journal of Marketing, 13 (3), 315–20.
8.
BengtssonMariaKockSoren (1999), “Cooperation and Competition in Relationships Between Competitors in Business Networks,” Journal of Business and Industrial Marketing, 14 (3), 178–94.
9.
BlairRoger D.LafontaineFrancine (1999), “Will Khan Foster or Hinder Franchising? An Economic Analysis of Maximum Resale Price Maintenance,” Journal of Public Policy and Marketing, 18 (1), 25–36.
10.
BucklinLouis P. (1973), “A Theory of Channel Control,” Journal of Marketing, 37 (1), 39–47.
11.
Business Electronics Corporation v. Sharp Electronics Corporation (1988), 485 U.S. 717.
12.
CairnsJ.P. (1968), “The United Kingdom’s New Law on Resale Price Maintenance,” Journal of Retailing, 43 (4), 22–28.
13.
CassadyRalphJr. (1938), “The Consumer and the Maintenance of Resale Prices,” Journal of Marketing, 3 (3), 257–26.
14.
ChungJae-EunJinByounghoSternquistBrenda (2007), “The Role of Market Orientation in Channel Relationships When Channel Power Is Imbalanced,” International Review of Retail Distribution and Consumer Research, 17 (2), 159–76.
CorstenDanielKumarNirmalya (2005), “Do Suppliers Benefit from Collaborative Relationships with Large Retailers? An Empirical Investigation of Efficient Consumer Response Adoption,” Journal of Marketing, 69 (3), 80–94.
17.
CousinsPaul D. (2002), “A Conceptual Model for Managing Long-Term Inter-organisational Relationships,” European Journal of Purchasing and Supply Management, 8 (1), 71–82.
18.
Dr. Miles Medical Co. v. John D. Park & Sons Co.
(1911), 220 U.S. 373.
19.
DraganskaMichaelaKlapperDanielVillas-BoasSofia B. (2010), “A Larger Slice or a Larger Pie? An Empirical Investigation of Bargaining Power in the Distribution Channel,” Marketing Science, 29 (1), 57–74.
20.
DukesAnthony J.GeylaniTansevSrinivasanKannan (2009), “Strategic Assortment Reduction by a Dominant Retailer,” Marketing Science, 28 (2), 309–19.
21.
DyerJeffrey H.ChoDong SungChuWujin (1998), “Strategic Supplier Segmentation: The Next ‘Best Practice’ in Supply Chain Management,” California Management Review, 40 (2), 57–77.
FulopChristinaMarchTim (1979), “The Effects of the Abolition of Resale Price Maintenance in Two Trades,” European Journal of Marketing, 13 (7), 223–36.
27.
GanesanShankar (1994), “Determinants of Long-Term Orientation in Buyer-Seller Relationships,” Journal of Marketing, 58 (2), 1–19.
28.
GraftonJenniferMundyJulia (2016), “Relational Contracting and the Myth of Trust: Control in a Co-Opetive Setting,” Management Accounting Research, 36 (1), 24–42.
29.
GretherE.T. (1935), “Retail Price Maintenance and the Consumer,” American Marketing Journal, 2 (3), 114–49.
30.
GretherE.T. (1947), “The Federal Trade Commission Versus Retail Price Maintenance,” Journal of Marketing, 12 (1), 1–13.
31.
GrimesWarren S. (2008), “The Path Forward After Leegin: Seeking Consensus Reform of the Antitrust Law of Vertical Restraints,” Antitrust Law Journal, 75 (2), 467–504.
32.
GrimesWarren S. (2010), “A Dynamic Analysis of Resale Price Maintenance: Inefficient Brand Promotion, Higher Margins, Distorted Choices, and Retarded Retailer Innovation,” Antitrust Bulletin, 55, 101–49.
33.
GundlachGregory T. (2010a), “Overview and Contents of the Special Issue: Antitrust Analysis of Resale Price Maintenance After Leegin,” Antitrust Bulletin, 55 (1), 1–24.
34.
GundlachGregory T. (2010b), “Overview of the Special Issues: Antitrust Analysis of Resale Price Maintenance After Leegin,” Antitrust Bulletin, 55 (2), 271–76.
35.
GundlachGregory T. (2013), “Distribution: Is Free-Riding Bad After All?” Journal of European Competition Law and Practice, 4 (1), 96–101.
36.
GundlachGregory T.FrankelRobertKrotzRiley T. (2019), “Competition Policy and Antitrust Law: Implications of Developments in Supply Chain Management,”Journal of Supply Chain Management, 55 (2), 47–67.
37.
GundlachGregory T.KrotzRiley T. (2016), Resale Price Maintenance After Leegin: The Curious Case of Contact Lenses. CreateSpace.
38.
GundlachGregory T.LoffAlex G. (2013), “Dual Distribution Restraints: Insights from Business Research and Practice,” Antitrust Bulletin, 58 (1), 69–105.
39.
GundlachGregory T.ManningKenneth C.CannonJoseph P. (2011), “Resale Price Maintenance and Free Riding: Insights from Multi-Channel Research,” Academy of Marketing Science Review, 147 (1), 18–31.
40.
GundlachGregory T.ManningKenneth C.CannonJoseph P. (2017), “Resale Price Maintenance After Leegin: Behavioral, Evolutionary, and Institutional Insights for Advancing the Free Rider Thesis,” Journal of Public Policy & Marketing, 36 (2), 196–212.
41.
HarrisonJeffrey L. (2010), “Dr. Miles’s Orphans: Vertical Conspiracy and Consignment in the Wake of Leegin,” Wake Forest Law Review, 45, 1125–56.
42.
HarrisonShirley (2000), “Shouts and Whispers: The Lobbying Campaigns for and Against Resale Price Maintenance,” European Journal of Marketing, 34 (1/2), 207–22.
43.
HeideJan B.MinerAnne S. (1992), “The Shadow of the Future: Effects of Anticipated Interaction and Frequency of Contact on Buyer–Seller Cooperation,” The Academy of Management Journal, 35 (2), 265–91.
44.
HenryBrian R.ZelekEugene F.Jr. (2003), “Establishing and Maintaining an Effective Minimum Resale Price Policy: A Colgate How-To,” Antitrust, 17 (3), 8–17.
45.
HingleyMartin K.LindgreenAdamCasswellBrett (2000), “Buyer-Supplier Relationships in the UK Fresh Produce Industry,” British Food Journal, 102 (1), 6–17.
46.
Hogarth-ScottSandra (1999), “Retailer-Supplier Partnerships: Hostages to Fortune or the Way Forward for the Millennium?” British Food Journal, 101 (9), 668–82.
47.
HollanderStanley C. (1955), “The ‘One-Price’ System, Fact or Fiction?” Journal of Retailing, 31, 127–44.
48.
HollanderStanley C. (1966), “United States of America,” in Resale Price Maintenance, YameyB.S., ed. Letchworth, UK: Garden City Press Limited, 65–100.
49.
HovenkampHerbert (2010), “Leegin, the Rule of Reason, and Vertical Agreement,” University of Iowa Legal Studies Research Paper, 10–40.
50.
HuangZhiminLiSusan X. (2001), “Co-op Advertising Models in Manufacturer–Retailer Supply Chains: A Game Theory Approach,” European Journal of Operational Research, 135 (3), 527–44.
51.
HubbardRobert L. (2014), “Applying the Rule of Reason to Resale Price Restraints: A Fresh Perspective,” Antitrust, 29 (1), 95–99.
52.
HughesDouglas E.AhearneMichael (2010), “Energizing the Reseller’s Sales Force: The Power of Brand Identification,” Journal of Marketing, 74 (4), 81–96.
53.
IsraeliAyeletAndersonEric T.CoughlanAnne T. (2016), “Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets,” Marketing Science, 35 (4), 539–64.
54.
JonesAlisonKovacicWilliam (2017), “Identifying Anticompetitive Agreements in the United States and the European Union: Developing a Coherent Antitrust Analytical Framework,” Antitrust Bulletin, 62 (2), 254–93.
55.
KadiyaliVrindaChintaguntaPradeepVilcassimNaufel (2000), “Manufacturer–Retailer Channel Interactions and Implications for Channel Power: An Empirical Investigation of Pricing in a Local Market,” Marketing Science, 19 (2), 127–48.
56.
KalyanamKirthiTsayAndy A. (2013), “Free Riding and Conflict in Hybrid Shopping Environments: Implications for Retailers, Manufacturers, and Regulators,” Antitrust Bulletin, 58 (1), 19–68.
57.
KaplowLouis (2016), “The Meaning of Vertical Agreement and the Structure of Competition Law,” Antitrust Law Journal, 80 (3), 563–630.
58.
KaufmanHenry (2001), “What Would Adam Smith Say Now? He Would Like Much of What He Sees, But He Would Also Be Worried,” Business Economics, 36 (4), 7–13.
59.
KaufmannPatrick J. (1988), “Guest Commentary Dealer Termination Agreements and Resale Price Maintenance: Implications of the Business Electronics Case and the Proposed Amendment to the Sherman Act,” Journal of Retailing, 64 (2), 113–24.
60.
KilburnEdwin A. (1982), “Other Vertical Problems: Pricing, Refusals to Deal, Distribution,” Antitrust Law Journal, 51 (2), 173–84.
KozlenkovaIrina V.HultThomas M.LundDonald J.MenaJeannette A.KekecPinar (2015), “The Role of Marketing Channels in Supply Chain Management,” Journal of Retailing, 94 (1), 586–609.
63.
KucukS. UmitTimmermansHarry J.P. (2012), “Resale Price Maintenance (RPM): The US and EU Perspectives,” Journal of Retailing and Consumer Services, 19 (5), 537–44.
64.
LaoMarina (2010), “Resale Price Maintenance: The Internet Phenomenon and Free Rider Issues,” Antitrust Bulletin, 55 (2), 473–512.
65.
LeeStewart Munro (1959), “Problems of Resale Price Maintenance,” Journal of Marketing, 23 (2), 274–82.
66.
Leegin Creative Leather Products, Inc. v. PSKS, Inc.
(2007), 551 U.S. 877.
67.
LewisCharles W. (1939), “Effects of Price Maintenance in Knoxville, Tennessee,” Journal of Marketing, 4 (2), 139–46.
68.
LindsayMichael A. (2009), “State Resale Price Maintenance Laws After Leegin,” The Antitrust Source (October), 1–14.
69.
LindsayMichael A. (2012), “From the Prairie to the Ocean: More Developments in State RPM Law,” The Antitrust Source (August), 1–6.
70.
LindsayMichael A. (2017), “Contact Lenses and Contact Sports: An Update on State RPM Laws,” The Antitrust Source (April), 1–11.
71.
MarvelHoward P. (2017), “Leegin and the Economics of Resale Price Maintenance,” Review of Industrial Organization, 50 (1), 221–44.
72.
MaurerVirginia G.UrsicMichael (1987), “Resale Price Maintenance: A Legal Review,” Journal of Public Policy and Marketing, 6 (1), 171–80.
73.
Miklós-ThalJeanineReyPatrickVergéThibaud (2011), “Buyer Power and Intrabrand Coordination,” Journal of the European Economic Association, 9 (4), 721–41.
74.
Monsanto Co. v. Spray-Rite Service Corp.
(1984), 465 U.S. 753.
75.
MossGary L.Shaw-McMinnPeter G. (2001), Eyecare Business: Marketing and Strategy. Boston: Butterworth-Heinemann.
PrajogoDanielOlhagerJan (2012), “Supply Chain Integration and Performance: The Effects of Long-Term Relationships, Information Technology and Sharing, and Logistics Integration,” International Journal of Production Economics, 135 (1), 514–22.
79.
SantomeroAnthony M. (1999), “Bank Mergers: What’s a Policymaker to Do?” Journal of Banking and Finance, 23 (2), 637–43.
80.
SantosJosé Manuel Novais de Magalhães (2016), “An Interaction and Network Perspective of Horizontal Relationships in the Portuguese Pharmaceutical Industry,” doctoral dissertation, Instituto Superior de Economia e Gestao, Universidade de Lisboa, Lisbon, Portugal.
81.
SantosJose NovaisBaptistaCristina Sales (2015), “Business Interaction Between Competitors—Towards a Model for Analyzing Strategic Alliances,” IMP Journal, 9 (3), 286–99.
82.
SantosJose NovaisBaptistaCristina Sales (2016), “Information Exchange Within Horizontal Relationships: A Fuzzy-Set Approach to Companies’ Characteristics Role,” Journal of Business Research, 69 (11), 5255–60.
83.
SheffetMary JaneScammonDebra L. (1985), “Resale Price Maintenance: Is It Safe to Suggest Retail Prices?”Journal of Marketing, 49 (4), 82–92.
84.
Sherman Act (1890), 15 U.S.C. 1–7.
85.
SternLouis W. (1964), “Approaches to Achieving Retail Price Stability,” Business Horizons, 7, 78–80.
86.
SteinerRobert L. (2010), “The Leegin Factors—A Mixed Bag,” Antitrust Bulletin, 55 (1), 25–58.
87.
StewartCharles F. (1954), “Mandatory Resale Price Maintenance of Distilled Spirits in California,” Journal of Marketing, 18 (4), 370–79.
88.
StewartDavid O.NelsonScott (1988), “Upholding Vertical Restraints,” American Bar Association Journal, 74 (7), 36–44.
89.
SullivanLawrence A.GrimesWarren S.SagersChristopher L. (2016), The Law of Antitrust: An Integrated Handbook, 3rd ed. St. Paul, MN: West Academic Publishing.
90.
SullivanThomas E.HarrisonJeffery L. (2009), Understanding Antitrust and Its Economic Implications. New York: LexisNexis.
91.
TikooSurinderMatherBruce (2011), “The Changed Legality of Resale Price Maintenance and Pricing Implications,” Business Horizons, 54 (5), 415–23.
92.
United States v. Colgate & Co.
(1919), 250 U.S. 300.
