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Since 1997, US courts have divided price fixing into two categories: vertical and horizontal maximum price fixing. [6] Vertical price fixing includes a manufacturer's attempt to control the price of its product at retail. [7] In State Oil Co. v. Khan, [8] the U.S. Supreme Court held that vertical price fixing is no longer considered a per se ...
Vertical restraints are to be distinguished from so-called "horizontal restraints", which are found in agreements between horizontal competitors. Vertical restraints can take numerous forms, ranging from a requirement that dealers accept returns of a manufacturer's product, to resale price maintenance agreements setting the minimum or maximum ...
Resale price maintenance (RPM) or, occasionally, retail price maintenance is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or above a price floor (minimum resale price maintenance) or at or below a price ceiling (maximum resale price maintenance).
In August 2007 British Airways (BA) was fined £121.5 million [45] for price-fixing. The fine was imposed by the Office of Fair Trading (OFT) after BA admitted to the price-fixing of fuel surcharges on long haul flights.
Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007), is a US antitrust case in which the United States Supreme Court overruled Dr. Miles Medical Co. v. John D. Park & Sons Co. [1] Dr Miles had ruled that vertical price restraints were illegal per se under Section 1 of the Sherman Antitrust Act.
A vertical agreement is a term used in competition law to denote agreements between firms at different levels of a supply chain. For instance, a manufacturer of consumer electronics might have a vertical agreement with a retailer according to which the latter would promote their products in return for lower prices.
In State Oil Co. v. Khan, [9] and then Leegin Creative Leather Products, Inc. v. PSKS, Inc., [10] the Supreme Court held that vertical price fixing (for example, agreed upon between manufacturers and retailers of their products) is no longer to be considered a per se violation of the Sherman Act, but should be evaluated under a rule of reason.
The first legislation against cartels to be enforced was the Sherman Act 1890, which also prohibits price fixing, market-sharing, output restrictions and other anti-competitive conduct. [35] Section 1 and 2 of the Act outlines the law in regards to cartels,