Rethinking Antitrust Policy Toward RPM

Abstract

Resale price maintenance is a particularly dangerous vertical intrabrand restraint. Because of its direct impact on price competition, it is likely to harm consumers in a substantial number of cases. At the same time, RPM is likely to benefit consumers in a significant number of other cases. Given these mixed effects, the ideal legal standard would distinguish between instances in which RPM is anticompetitive and those in which it is procompetitive. While Leegin thought that the full rule of reason could play this role, it did not acknowledge what every scholar who has looked at the issue has found – that the full rule of reason has operated in practice as a standard of virtual per se legality, absolving almost every restraint examined. This article proposes an alternative approach – a presumption of illegality combined with safe harbors – and explains why it is likely to produce better results at lower cost.

Keywords: antitrust law, competition, resale price maintenance, vertical restraints, rule of reason, presumptive illegality, safe harbors