Resale price maintenance is the practice whereby a manufacturer requires distributors of their product to sell at certain prices, or set a minimum price. These rules prevent resellers from competing too fiercely on price and thus driving down profits. The manufacturer may do this because it wishes to keep resellers profitable, and thus keeping the manufacturer profitable. Such contracts are usually legal under U.S.fair trade law but have sometimes been stopped since they formally restrict free trade. Manufacturers defend resale price maintenance by saying it ensures fair returns, both for manufacturer and reseller and that governments do not have right to interfere with freedom to make contracts without very good reason. Competition is the act of striving against another force for the purpose of achieving dominance or attaining a reward or goal, or out of a biological imperative such as survival. ... Motto: E pluribus unum (1789 to present) (Latin: Out of Many, One) In God We Trust (1956 to present) Anthem: The Star-Spangled Banner Capital Washington, D.C. Largest city New York Official language(s) None at federal level; English de facto Government • President • Vice President Federal republic George W... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ...
Resale price maintenance and UK law
In 1955 in the UK the Monopolies and Mergers Commission's report Collective Discrimination - A Report on Exclusive Dealing , Aggregated Rebates and Other Discriminatory Trade Practices recommended that resale price maintenance when collectively enforced by manufacturers should be made illegal, but individual manufacturers should be allowed to continue the practice. The report was the basis for the Restrictive Trade Practices Act of 1956, this specifically prohibited collective enforcement of resale price maintenance in the UK. Restrictive agreements had to registered at the Restrictive Practices Court, and were considered on individual merit. In 1964 the Resale Prices Act was passed, which now considered all resale price agreements to be against public interest unless otherwise proved. The Competition Commission (formerly the Monopolies and Mergers Commission) is an organisation that is financed by the government that investigates proposed monopolies or mergers and checks if they are in the public interest. ...
Resalepricemaintenance first began to be employed in the 1880s, reflecting the success of brand promotion and the resulting increase in competition among retailers.
The setting of minimum resaleprices, which state fair-trade laws legalized, was precisely the sort of vertical price-fixing that the federal Sherman Anti-Trust Act of 1890 (15 U.S.C.A. § 1) had been intended to prohibit.
The decision rested on the assertion that minimum resalepricemaintenance is indistinguishable in economic effect from naked horizontal price fixing by a cartel.
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