Posted Aug 18, 2008 11:58 am CDT
A U.S. Supreme Court decision involving Brighton handbags has led several manufacturers to set minimum prices for their products and cut off retailers who fail to follow them.
The June 2007 decision, Leegin Creative Leather Products Inc. v. PSKS Inc., said companies may set and enforce minimum prices if they promote competition. The court’s new test is more defendant-friendly.
Now minimum prices are being imposed by several manufacturers, particularly those that make baby goods, consumer electronics, home furnishings and pet food, the Wall Street Journal reports (sub. req.).
The price policies have led to at least two lawsuits and a request for a change in the law by 35 state attorneys general, the story says.
The attorneys general wrote to Congress in May, saying that resale price maintenance by manufacturers can lead to inflation and harm consumers.
One of the suits was filed by BabyAge.com and BabyCatalog.com against six baby goods makers and Toys “R” Us. The suit filed in Philadelphia federal court alleges an illegal pact between the defendants to set minimum prices, a claim denied by the defendants, the story says.
The other suit was filed in New York state court by home-improvement retailer WorldHomeCenter.com Inc. against lighting maker L.D. Kichler Co.