Antitrust Policy toward Resale Price Maintenance following Leegin

There are two economics of resale price maintenance and other vertical restraints. In the first economics, the restraints are imposed by manufacturers on their distributors to achieve increased sales and higher profits, while in the second, restraints are coerced by large distributors, or collections of distributors, on their suppliers. This distinction is critical because restraints arising in the first context sometimes lead to enhanced consumer welfare, while restraints imposed in the second invariably lead to reduced competition and diminished consumer welfare. This article relies on this distinction to suggest appropriate antitrust standards toward resale price maintenance under the rule of reason mandated in the Leegin decision.