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Retail Price Maintenance Policies: A Bane for Retailers, but a Boon for Consumers?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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In June, a high-profile Supreme Court case held the attention of retailers and manufacturers alike. In a five-to-four ruling, the high court overturned a lower-court decision to award .2 million to a Dallas-area clothing store that was cut off by a supplier, Leegin Creative Leather Products, because the retailer refused to abide by the manufacturer’s retail price maintenance (RPM), or no-discount policy. The decision means that manufacturers no longer face a blanket prohibition against implementing an RPM policy. The case has spurred concern among consumer groups, who claim it overturns a century of precedent and will lead to price fixing and unjustifiably higher prices. But Wharton faculty and others suggest that any changes will be gradual, and may ultimately benefit consumers. Supreme Court Justice Stephen Breyer, who authored a dissent signed by three other justices, said that the ruling could mean price hikes of more than $1,000 per year for the average American family.…

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