Monday, November 30, 2009
Posted by D. Daniel Sokol
Thom Lambert of the University of Missouri School of Law discusses A Decision-Theoretic Rule of Reason for Minimum Resale Price Maintenance.
ABSTRACT: In its 2007 Leegin decision, the U.S. Supreme Court reversed a 96 year-old precedent declaring vertical minimum resale price maintenance (RPM) to be per se illegal. The Court held that RPM should henceforward be evaluated under antitrust’s more lenient rule of reason, and it directed the lower courts to craft a structured liability analysis that will separate pro- from anticompetitive instances of the practice. Thus far, courts, regulators, and commentators have proposed four types of approaches for evaluative approach that would minimize the sum of decision and error costs, thereby maximizing the net social benefits of RPM regulation.