Graduation Year

Fall 2012

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

James Taylor

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Terms of Use for work posted in Scholarship@Claremont.

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© 2012 Alexander Pei

Abstract

Resale Price Maintenance (RPM) is a contentious topic in economic policy. In effect, it allows manufacturers and suppliers to impose price fixing policies upon their distributors and retailers. While RPM was per se illegal as decided in Dr. Miles in 1911, various Supreme Court decisions afterwards weakened the ability of plaintiffs to hold companies liable for violating antitrust laws. As a result of the Leegin decision in 2007, Dr. Miles was overturned and RPM cases were to ruled to be found illegal on a rule of reason basis, further adding to the difficulty of the plaintiff's burden of proof. However, the economic analysis that the Supreme Court employed in reaching this decision failed to account for the full consequences and drawbacks under RPM, in addition to placing an undue emphasis on procompetitive assumptions supporting the use of RPM. Additionally, the Supreme Court may have overstepped its responsibilities and powers with respect to Congress. Nevertheless, the Leegin decision is not necessarily binding at the state level, whereas Congress still possesses the means to override the decision through subsequent legislation.

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