Fair Trade Legislation Research Articles

Leegin Creative Leather Products, Inc. v. PSKS, Inc.: The Strange Career of the Law of Resale Price Maintenance

The article tells the long, fascinating and sometimes hardly credible story of the law of resale price maintenance (RPM). The 1911 Dr. Miles decision, overruled by Leegin, was one of the oldest and most important in the history of antitrust in that it extended the coverage of the Sherman Act from competitor (horizontal) to buyer-seller (vertical) agreements, holding manufacturer-dealer RPM agreements illegal per se. Eight years later the Court in effect overruled Dr. Miles in the Colgate case (at the urging of defendant's counsel, former Justice Charles Evan Hughes, the author of Dr. Miles) by making a non-existent distinction between express and tacit agreements. It then effectively overruled Colgate in turn by ignoring the supposed distinction. In 1937 Congress negated Dr. Miles by authorizing the states to pass fair trade legislation permitting RPM, but in 1975 repealed the authorization, restoring Dr. Miles to full health. Two years later, Dr. Miles was again effectively overruled by the Court's adoption in the seminal Sylvania decision of the Chicago school of economics' skeptical view of antitrust and per se rules. It was further undermined, if possible, by the Court's revival of the Colgate doctrine and by making the necessary agreement hard to prove. The seemingly shocking Leegin decision, therefore, in fact merely made the overruling explicit. Justice Breyer, joined by Justices Stevens, Souter, and Ginsberg, vigorously dissented, apparently relying more on stare decisis than on the merits of Dr. Miles, a reliance much weakened by the Court's prior overruling of two cases on closely related issues. The paper also briefly discusses the very limited present day relevance and usefulness of the traditional per se/rule of reason distinction, and debunks the Court's conventional assertion that it adopts a per se rule only after long experience with the restraint. The history of the law of RPM illustrates, at its end and at its beginning that ideology can have more to do than economics or logic with the making of antitrust law, paralleling its role in constitutional law. Leegin also makes clear that the newly reconstituted Court remains committed to the Chicago school view of antitrust and has a flexible approach to stare decisis.

International Financial Institutions, Corporate Governance and the Asian Financial Crisis

As a part of Asian governments' responses to the financial crisis of 1997-2000, corporate governance reform became an important element of the reform agenda in the crisis economies (Korea, Thailand and Indonesia) and among their neighbors. The international financial institutions (IFIs) which organized the emergency financial assistance for the crisis economies - the International Monetary Fund, World Bank and Asian Development Bank - were instrumental in the inclusion of corporate governance on the reform agenda. Yet prior to the crisis, corporate governance had not been a part of these institutions' crisis response programs, and the institutions had only limited familiarity with the issue. It was largely in response to the Korean crisis that corporate governance found its way onto the reform agenda. The dominance of the chaebol (family controlled corporate groups) had long been recognized as both a strength and as a structural weakness of the Korean economy, but previously the issue had been addressed principally through anti-monopoly and fair trade legislation and regulations. In placing corporate governance on the reform agenda in response to the financial crisis, this was the first time that corporate governance issues at the firm level were viewed as being capable of making a material contribution to the chaebol problem through greater transparency and accountability to the investing public. Such an approach also appealed to the IFIs and was consistent with the approach of the prevailing Washington consensus, in its reliance on market-driven forces rather than greater government regulation. The reform program in Korea then served as a model for comparable reforms introduced by the IFIs into the emergency assistance programs in the other crisis countries.

The Major Powers of Northeast Asia: Seeking Peace and Security (review)

154KOREAN STUDIES, VOL. 23 the growing power of the chaebol, despite the fact that the state was becoming even more interventionist in the economy (pp. 137-152). Kim's analysis of the 1980s is equally, if not more, persuasive. It is ironic, then, that the evidence she uses to support her argument on the "decline of the developmental state" in chapter 6—such as growing collusion ("shady deals") between the chaebol and government officials; chaebol involvement in policy-making; and business' open defiance of important state policies, like fair trade legislation—was not unique to this period. It is ironic because the same things happened in the 1960s. Take the example of the Fair Trade and Anti-Monopoly Law of 1981: Kim points to the open defiance of this act by the chaebol to underscore the fundamentally changed nature of state-business relations in the 1980s (pp. 194-195). Yet, Kim neglects to point out that, in 1966, the state introduced similar legislation and was compelled to back down due to the "open defiance" of big business. This process, in fact, was repeated in 1969 and 1972. It is also fairly clear that the chaebol were involved in policymaking from the very beginning of the Park regime: the shift to EOI, as I noted above, almost certainly reflected the influence of the chaebol on state planners. It is even more certain that "shady deals" permeated state-business relations in the 1960s every bit as much as they did in the 1980s. The fact that Kim ignores these aspects of state-chaebol relations in the 1960s, but highlights them in the 1980s, only goes to buttress my point that the dominance of the state was never as complete or one-sided as we have been led to believe. Despite my obvious misgivings, I believe that Big Business, Strong State is a valuable and much-needed contribution to the literature on capitalist development in South Korea. Kim's book, at the least, will serve as an important building block: she has opened up new ways of thinking about state-business relations in Korea, and she has admirably illuminated the inherent limitations and contradictions of the "developmental state." Timothy C. Lim California State University, Los Angeles The MajorPowers ofNortheastAsia: Seeking Peace andSecurity, edited by Tae-Hwan Kwak and Edward A. Olsen. Boulder, Colorado: Lynne Rienner, 1996. 264 pp. $52.00 cloth. This well-produced conference volume is in many ways a sterling example of the genre. Despite the inevitable erosion of its timeliness in a fast-changing region ofthe world, it holds up well to current needs ofteachers and researchers, for the basic reason that the editors have paid particular attention to the dimensions of that very dynamism. BOOK REVIEWS155 Before turning to some of the highlights of the earlier chapters, it is worth touching on the themes of the brief conclusion. Here, the co-editors hold that the changing world in which Northeast Asia must function "is no longer as clearly influenced by the United States"; rather the region is confronting a "Sino-Japanese balance of power possessing political, economic and military dimensions" (p. 244). It is reasonable to assert that the current Asian financial crisis has placed such an analytical viewpoint under a harsh spotlight. Bruce Cumings, to cite one of the more controversial critics, has recently stated in an article in New Left Review (no. 231, September 1998, pp. 43-72) that "the deep meaning of the Asian crisis . . . lies in the American attempt to bring down the curtain on late development of the Japanese-Korean type" (p. 45). Cumings need go no further than the columns of the mainstream press to find evidence of direct influence of U.S. decision makers (see his subheading "How Robert Rubin Rewrote the Rules of Korean Political Economy"). While he concludes that "Washington's enduring regional configuration is suddenly shaky," Cumings's point is that the International Monetary Fund has tilted the game back in favor of the United States and the advanced industrial countries. While Kwak and Olsen may not have anticipated this precise development , they foresaw something of the kind: "readers . . . who know how the United States resolved its debate about...

Policy-Making Process in Korea: The Enactment Process of the Monopoly Regulation and Fair Trade Act

Three dominant perspectives on the origin of regulation (the public mterest model, the capture model, and the politics model) and four models of governmental decision-making (the rational actor model, the organizational process model, the governmental politics model, and the garbage can model) are utilized in order to investigate the enactment process. This article argues that the failure to enact monpoly regulation and fair trade legislation during the 1960's and 1970's can be attributed mainly to the faithful implementation of economic development plans by the Park regime and to the public endorsement of those plans. The enactment of the MRFTA in 1980, however, is ascribed less to a problem-solving kind of activity within the Korean government and more to a temporal simultaneity of the political needs of the new milltary leadership and a few reform-minded career bureaucrats within the EPB.

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Price Control Under Fair Trade Legislation. Ewald T. Grether

Previous articleNext article No AccessBook ReviewsPrice Control Under Fair Trade Legislation. Ewald T. Grether Roland S. VaileRoland S. Vaile Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 49, Number 1Feb., 1941 Article DOIhttps://doi.org/10.1086/255685 Views: 1Total views on this site PDF download Crossref reports no articles citing this article.

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation.

Price Control under Fair Trade Legislation.

Price Control Under Fair Trade Legislation.

Price Control Under Fair Trade Legislation.

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Book Review: Price Control under Fair Trade Legislation

Book Review: Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Price Control under Fair Trade Legislation

Some Economic and Social Implications of Fair Trade Legislation

Some Economic and Social Implications of Fair Trade Legislation

Maintenance of Resale Prices by Manufacturers

I. Legal background of resale price maintenance, 454.—Present status of price maintenance, 455.—II. Quasi-monopolistic position of differentiated product producers, 455.—The effect of fair trade legislation on retail prices of contract items, 457.—III. Underlying factors making possible an artificial price structure, 458.—IV. Comparison of nationally advertised drug prices with non-nationally advertised comparable items, 460.—Relative ignorance of consumers regarding substitute products, 462.—V. Effect of price maintenance legislation in California, 462.—VI. Evaluation of fair trade in contrast to loss leader legislation, 463.—Education of the consumer as an essential element for breaking fixed prices, 464.

The Consumer and the Maintenance of Resale Prices

M UCH HAS been written about the present status of resale price maintenance in the United States. Most marketing men know that fair trade laws are in effect in 43 out of the 48 states; that federal legislation has been enacted to legalize contracts between parties living in different states having such laws. It is equally well known that the usual law makes the issuance of one contract tantamount to the issuance of contracts to all. That is to say, the legislation from the point of view of the proponents seems to be free from bugs; should be, from their point of view, quite effective. The scope of fair trade legislation has also received some attention. Fortunately-from the consumer's point of view-its provisions are limited to the sale of identified commodities, which means that produce, secondhand goods, and all other types of goods sold without benefit of brands are without the scope of fair trade legislation. Indeed, actually, goods containing a high degree of the fashion element and those which are highly competitive are not easily subject to price control either. Consequently, probably not more than io%at the most I5%'-of retail sales has any possibility of coming within the scope of resale price maintenance laws. Indeed, at present the bulk of contracts are in books, liquors and drugs and cosmetics.2 Moreover-as shall be brought out later-because of the existence of more or less fixed patronage habits only a portion of the consumer body in any line is immediately affected in a material way by the inauguration of such legislation. However, no bad piece of legislation should be condoned on the ground that only a small proportion of the public is affected by its provisions. Question is: What is the effect of price maintenance on the several classes of consumers? Fortunately, there are now available results of a number of objective studies. From these the impact of price maintenance legislation can be deduced. The now-classic study made by Professor Grether of California still is outstanding. As most people in the field know, Grether found (granting the representativeness of the sample) that after the inauguration of effective legislation in California prices of contractual items in the drug field increased about 30% in cut-rate establishments, but declined slightly-probably not over 2% -in the same period in the small city or neighborhood type of outlet.I Right in line with these findings are those recently published by Dun's Review. In this study4 the investigators

Fair Trade Legislation and the Retailer

Fair Trade Legislation and the Retailer

Fair Trade Legislation and the Retailer

T HE TERM trade embraces a variety of restrictions on pricing freedom. With reference to the relations between commercial buyers and sellers, that is, manufacturers, wholesalers, and retailers, there is the well-known Robinson-Patman Act, aiming to prevent so-called price discrimination accomplished either directly, or indirectly by collateral transactions between buyers and sellers regarded in the law as tantamount to pricing subterfuges. These restrictions are aimed principally at buying practices. Other types of fair trade legislation are directed at the selling end and especially at retail pricing practices, that is, at pricing relations between retailers and consumers. Here the principal form of restriction consists of the state price maintenance acts, commonly referred to as fair trade acts, and the supporting Federal measure, the Miller-Tydings Act, the effect of which is to give manufacturers of trademarked goods in some 42 states the privilege of stipulating resale prices and, by means of a contract made with one distributor, enforcing those resale prices on all the distributors handling the product. Resale price maintenance of course applies only to trade-marked goods and is permissive rather than mandatory. Another type of legislative restriction, designed primarily to curb freedom of action in setting selling prices, is represented by the various unfair trade practices acts now on the statute books of some 15 states. These laws' which apply not merely to branded merchandise but to all merchandise, and which, of course, are mandatory rather than discretionary, have as their general purport the prohibition of sales below cost, cost being defined sometimes as invoice cost, sometimes as invoice cost plus some stated percentage, such as 6% or 10%, and sometimes, as in the case of California, invoice cost plus the entire cost of doing business. Such enactments are in general to be distinguished from the statutes, mostly of long standing, which follow the Clayton Act in forbidding locality discrimination, though sometimes the two are combined.

Fair trade legislation

Fair trade legislation

Fair Trade Legislation Restricting Price Cutting

UPON THE collapse of the N.R.A. there was a significant shift of interest and influence in the field of legislative control of price cutting from attempts to secure Federal legislation to efforts to obtain state enactments. The unanimous favorable decision of the United States Supreme Court on December 7 of 1936 with respect to the Illinois and California Fair Trade Laws portends further significant development along these lines, with the strong possibility also of the passage of Federal enabling At the end of 1936 there were fifteen states in this country with laws identical with, or closely patterned upon, the original statute passed by California in 1931 and amended in 1933. These states, in addition to 'California, included New Jersey, Oregon, Washington, Iowa, Pennsylvania, Maryland, New York, Wisconsin, Illinois, Ohio, Virginia, Rhode Island, Louisiana, and Arizona. In addition to the state laws mentioned above, which legalize resale price controls under contract, there are allied enactments which are often confused with the resale price control laws, partly because of considerable similarity in intent but primarily because these other statutes are commonly also called fair legislation. In this paper, space does not permit a detailed presentation of the laws of the various states. Fortunately, the general character of these fair trade acts, other than the resale price control laws can be shown by a brief statement of the California chronology, since California has been a pioneer in this field. THE CALIFORNIA 'CHRONOLOGY