II 

Calendar No. 473 

111TH CONGRESS 

2D SESSION S. 148 

[Report No. 111–227] 

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 (for himself, Mr. WHITEHOUSE, Mr. WYDEN, Mr. KAUFMAN, Mr. 

FRANKEN, Mr. SCHUMER, Mr. FEINGOLD, Mr. DURBIN, Mr. SPECTER, 

Mrs. FEINSTEIN, and Ms. KLOBUCHAR) introduced the following bill; 

which was read twice and referred to the Committee on the Judiciary 

JULY 21, 2010 

Reported by Mr. LEAHY, without amendment 

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, 


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•S 148 RS

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Discount Pricing Con3 sumer Protection Act’’. 

4 SEC. 2. STATEMENT OF FINDINGS AND DECLARATION OF 

5 PURPOSES. 

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

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

8 June 2007 in the Leegin decision, the Supreme 

9 Court had ruled that the Sherman Act forbid in all 

10 circumstances the practice of a manufacturer setting 

11 a minimum price below which any retailer, whole12 saler or distributor could not sell the manufacturer’s 

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

14 or ‘‘vertical price fixing’’). 

15 (2) The rule of per se illegality forbidding re16 sale price maintenance promoted price competition 

17 and the practice of discounting all to the substantial 

18 benefit of consumers and the health of the economy. 

19 (3) Many economic studies showed that the rule 

20 against resale price maintenance led to lower prices 

21 and promoted consumer welfare. 

22 (4) Abandoning the rule against resale price 

23 maintenance will likely lead to higher prices paid by 

24 consumers and substantially harms the ability of dis25 count retail stores to compete. For 40 years prior to 

26 1975, Federal law permitted States to enact soVerDate Mar 15 2010 01:25 Jul 22, 2010 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S148.RS S148

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1 called ‘‘fair trade’’ laws allowing vertical price fixing. 

2 Studies conducted by the Department of Justice in 

3 the late 1960s indicated that retail prices were be4 tween 18 and 27 percent higher in States that al5 lowed vertical price fixing than those that did not. 

6 Likewise, a 1983 study by the Bureau of Economics 

7 of the Federal Trade Commission found that, in 

8 most cases, resale price maintenance increased the 

9 prices of products sold. 

10 (5) The 5–4 decision of the Supreme Court ma11 jority in Leegin incorrectly interpreted the Sherman 

12 Act and improperly disregarded 96 years of antitrust 

13 law precedent in overturning the per se rule against 

14 resale price maintenance. 

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

16 (1) to correct the Supreme Court’s mistaken in17 terpretation of the Sherman Act in the Leegin deci18 sion; and 

19 (2) to restore the rule that agreements between 

20 manufacturers and retailers, distributors or whole21 salers to set the minimum price below which the 

22 manufacturer’s product or service cannot be sold vio23 lates the Sherman Act. 


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•S 148 RS

1 SEC. 3. PROHIBITION ON VERTICAL PRICE FIXING. 

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

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

4 after the first sentence the following: ‘‘Any contract, com5 bination, conspiracy or agreement setting a minimum 

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

7 a retailer, wholesaler, or distributor shall violate this 

8 Act.’’. 

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

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

11 enactment of this Act. 


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Calendar No. 473 

111TH CONGRESS 

2D SESSION S. 148 

[Report No. 111–227] 

A BILL 

To restore the rule that agreements between manuviolates the Sherman Act. manufacturer’s product or service cannot be sold salers to set the minimum price below which the facturers and retailers, distributors, or wholeJULY 21, 2010 

Reported without amendment 


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