II 

111TH CONGRESS 

1ST SESSION S. 148 

To restore the rule that agreements between manufacturers and retailers, 

distributors, or wholesalers to set the minimum price below which the 

manufacturer’s product or service cannot be sold violates the Sherman 

Act. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 6, 2009 

Mr. KOHL introduced the following bill; which was read twice and referred to 

the Committee on the Judiciary 

A BILL 

To restore the rule that agreements between manufacturers 

and retailers, distributors, or wholesalers to set the minimum price below which the manufacturer’s product or 

service cannot be sold violates the Sherman Act. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Discount Pricing Con5 sumer Protection Act’’. 

6 SEC. 2. STATEMENT OF FINDINGS AND DECLARATION OF 

7 PURPOSES. 

8 (a) FINDINGS.—Congress finds the following: 


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•S 148 IS

1 (1) From 1911 in the Dr. Miles decision until 

2 June 2007 in the Leegin decision, the Supreme 

3 Court had ruled that the Sherman Act forbid in all 

4 circumstances the practice of a manufacturer setting 

5 a minimum price below which any retailer, whole6 saler or distributor could not sell the manufacturer’s 

7 product (the practice of ‘‘resale price maintenance’’ 

8 or ‘‘vertical price fixing’’). 

9 (2) The rule of per se illegality forbidding re10 sale price maintenance promoted price competition 

11 and the practice of discounting all to the substantial 

12 benefit of consumers and the health of the economy. 

13 (3) Many economic studies showed that the rule 

14 against resale price maintenance led to lower prices 

15 and promoted consumer welfare. 

16 (4) Abandoning the rule against resale price 

17 maintenance will likely lead to higher prices paid by 

18 consumers and substantially harms the ability of dis19 count retail stores to compete. For 40 years prior to 

20 1975, Federal law permitted States to enact so21 called ‘‘fair trade’’ laws allowing vertical price fixing. 

22 Studies conducted by the Department of Justice in 

23 the late 1960s indicated that retail prices were be24 tween 18 and 27 percent higher in States that al25 lowed vertical price fixing than those that did not. 


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1 Likewise, a 1983 study by the Bureau of Economics 

2 of the Federal Trade Commission found that, in 

3 most cases, resale price maintenance increased the 

4 prices of products sold. 

5 (5) The 5–4 decision of the Supreme Court ma6 jority in Leegin incorrectly interpreted the Sherman 

7 Act and improperly disregarded 96 years of antitrust 

8 law precedent in overturning the per se rule against 

9 resale price maintenance. 

10 (b) PURPOSES.—The purposes of this Act are— 

11 (1) to correct the Supreme Court’s mistaken in12 terpretation of the Sherman Act in the Leegin deci13 sion; and 

14 (2) to restore the rule that agreements between 

15 manufacturers and retailers, distributors or whole16 salers to set the minimum price below which the 

17 manufacturer’s product or service cannot be sold vio18 lates the Sherman Act. 

19 SEC. 3. PROHIBITION ON VERTICAL PRICE FIXING. 

20 (a) AMENDMENT TO THE SHERMAN ACT.—Section 1 

21 of the Sherman Act (15 U.S.C. 1) is amended by adding 

22 after the first sentence the following: ‘‘Any contract, com23 bination, conspiracy or agreement setting a minimum 

24 price below which a product or service cannot be sold by 


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1 a retailer, wholesaler, or distributor shall violate this 

2 Act.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 subsection (a) shall take effect 90 days after the date of 

5 enactment of this Act. 

Æ 


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