Townhall.com::The Government's Iron Fist Is Not the Consumer's Friend::By Steve Chapman

re: "...The issue in this case is whether a manufacturer can dictate to retail stores what they can charge for its goods. You might think that if you take the risk of making a product, you should be able to contract with sellers on terms you think will enhance its chances of success. If stores don't want to go along with your preferences, they can carry someone else's products, and you can look for other retail outlets. /
But under our strange antitrust laws, that's not always how it works. For a manufacturer to make an agreement with retailers to sell only at a specified minimum price is illegal -- even when it promotes competition and offers benefits to consumers. /The practice, called resale price maintenance, is at the heart of a dispute between Leegin Creative Leather Products, which makes high-end purses and shoes for women, and Kay's Kloset, a suburban Dallas boutique that cut prices on these items below those it had agreed to. When Leegin ended its shipments, the store owners sued, claiming antitrust violations. A jury awarded them $3.6 million, in keeping with established federal law that treats resale price maintenance agreements as invariably malignant. /This view stands up under scrutiny like butter under a hot sun. The assumption is that if you let manufacturers control retail prices, they'll hose consumers for their own profit. But if they wanted to hose consumers, they could just raise the wholesale price they charge to retailers. That way, they would get the full proceeds of the rip-off, instead of sharing them with stores. So it's reasonable to assume there is some motive besides price-gouging at work..."...