Supreme Court Overturns Long-Standing Per Se Rule Against Vertical Minimum Price-Fixing


This morning, the Supreme Court overturned its long-standing per se rule against vertical minimum

price-fixing and held that such agreements shall be evaluated under the more flexible “rule of

reason.” See Leegin Creative Leather Products v. PSKS, Inc., Case No. 06-480. The Court’s 5-4 decision, authored by Justice Kennedy, overturns the per se rule against vertical minimum pricefixing first announced by Dr. Miles Medical Co. v. John D. Park & Sons Co. in 1911.

In overturning Dr. Miles, the Court concluded that application of the per se rule to vertical agreements on price is inconsistent with modern antitrust and economic analysis. Under the new rule announced by the Court, vertical minimum price-fixing agreements will be evaluated under the 'rule of reason,' which takes into account market dynamics and weighs the anticompetitive effects of

a practice against its procompetitive benefits.

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