Price Cutting and the Law

Archive Report

Weakening of Curbs on Price Competition

Court Setbacks for Price Maintenance Laws

The price war which radiated from a New York department store in June may break out anew if the current lull in retail buying is prolonged through the autumn by successful negotiation of a cease-fire in Korea.1 Legal barriers to price reductions on branded “fair-trade” merchandise were greatly weakened by a Supreme Court decision in May, immediately preceding the price war; so that now, for the first time since the mid-1980s, consumer prices of most maker-branded goods are open to direct market pressures. In an earlier decision, handed down in January 1951, the Supreme Court so interpreted the federal anti-price-discrimination law (the Robinson-Patman Act) as to permit unlimited price slashes to meet lawful competition. ...

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