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Supreme Court's Leegin Decision Opens Door to Resale Price Controls

By David C. Reymann
August 28, 2007

The story may be a familiar one. Your company makes a product that it sells it through various retailers or distributors. Over the years, you've worked hard to maintain the product's premium image, encouraged vigorous marketing and customer service by resellers, and maintained the peace between competing retail outlets. Your 'suggested retail price' has served everyone well, and no one has yet broken ranks.

But now one of your oldest retailers has decided to open up an Internet storefront and is selling your premium brand online at just pennies above wholesale. These sales are faceless, without any explanation of your product and with no customer service. Even worse, the Web site pictures your product alongside cheap knock-offs that could never be considered premium brands. It's only been a month and you've fielded dozens of angry calls from other retailers who are losing business, urging you to fix the problem.

You call the retailer and try to convince him to stop, pleading with him to take the larger margins from your suggested minimum price. When he still refuses, you tell him you plan to cease dealing with him unless he shapes up. At that point, he relents and agrees to adhere to the suggested price.

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