| Abstract |
Until the recent US Supreme Court decision in the Leegin case, resale price maintenance had been per se illegal in the US for nearly 100 years. It continues to be illegal under Sec. 61 of the Competition Act. Despite this record, economic analysis of RPM has found it to be a benign method for inducing retailer marketing effort. Arguments for its harm have been based on its potential value as a tool for protecting collusion among manufacturers or among retailers--a theory with few if any known examples. In Leegin, however, the US Supreme Court, in a sentence, and virtually out of nowhere, a new theory--that RPM might be an exclusionary device for inducing retailers not to carry competing products. Recent analyses of exclusionary conduct generally as the monopolization of distribution, retailing, or other complement or input markets could then apply. We apply those theories to RPM to see whether there are any circumstances necessary or sufficient for RPM to be a means for exclusion rather than for facilitating collusion. |