The antitrust counselor: The Supreme Court reversed Dr. Miles: Now what?
The US Supreme Court recently overruled Dr. Miles Medical Co. v. John D. Park & Sons, holding that all vertical price restraints are to be analyzed under the Rule of Reason. In other words, instead of being per se illegal and presumed anticompetitive, all vertical price restraints are now analyzed for reasonableness and their effect on competition.
The Supreme Court will be addressing the issue of vertical minimum resale price maintenance this term.
The United States Supreme Court garnered some headlines in the business press at the conclusion of its last term when, by a 5 to 4 decision, the Court overruled its 96-year-old Dr. Miles decision and removed resale price maintenance from the list of per se antitrust violations.
The impending demise of Dr. Miles?
On March 26, 2007, the United States Supreme Court will hear argument in Leegin Creative Leather Products, Inc. v. PSKS, Inc., No. 06-480, to decide whether vertical minimum resale price maintenance agreements should continue to be deemed per se illegal under Section 1 of the Sherman Act or be held subject to the rule of reason.
Minimum resale price maintenance after Leegin
On June 28, 2007, in Leegin v. PSKS, Inc., the Supreme Court overruled Dr. Miles Medical Co. v. John D. Park & Sons Co. and held that vertical prices restraints are to be judged by the rule of reason under federal law.