The House Judiciary Committee approved a bill Wednesday that would essentially reverse a Supreme Court decision upholding manufacturers rights to set minimum prices below which their dealers can not sell product.
The Discount Pricing Consumer Protection Act of 2009, or H.R. 3190, was passed out of the full committee. The bill, sponsored by Rep. Henry Johnson, D-GA, currently has only two co-sponsors, including Rep. John Conyers Jr, D-MI. The Senate has yet to vote on a companion bill (S 148) sponsored by Sen. Herb Kohl, former head of the Kohl's Department Store chain.
H.R. 3190 would effectively ban manufacturers from dictating minimum prices to dealers as a violation of the anti-trust provisions of the Sherman Act. Such “vertical price agreements” remain illegal in most states, despite a 2007 Supreme Court ruling (the Leegin ruling) that determined they did not violate federal anti-trust laws in certain circumstances.
After massive discounting late last year, many sports apparel brands incorporated minimum advertised pricing, or MAP, policies into their dealer agreements in a bid to limit discounts – particularly online. These policies forbid dealers from advertising below a minimum price and have been deemed by many attorneys to comply with state law. It remains uncertain how passage of the Kohl bill would affect minimum advertised pricing agreements.
