II 

112TH CONGRESS 

1ST SESSION S. 75 

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 25 (legislative day, JANUARY 5), 2011 

Mr. KOHL (for himself, Mrs. FEINSTEIN, Mr. DURBIN, Mr. WHITEHOUSE, 

Ms. KLOBUCHAR, Mr. FRANKEN, and Mr. WYDEN) 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’’. 


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1 SEC. 2. STATEMENT OF FINDINGS AND DECLARATION OF 

2 PURPOSES. 

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

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

5 June 2007 in the Leegin decision, the Supreme 

6 Court had ruled that the Sherman Act forbid in all 

7 circumstances the practice of a manufacturer setting 

8 a minimum price below which any retailer, whole9 saler or distributor could not sell the manufacturer’s 

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

11 or ‘‘vertical price fixing’’). 

12 (2) The rule of per se illegality forbidding re13 sale price maintenance promoted price competition 

14 and the practice of discounting all to the substantial 

15 benefit of consumers and the health of the economy. 

16 (3) Many economic studies showed that the rule 

17 against resale price maintenance led to lower prices 

18 and promoted consumer welfare. 

19 (4) Abandoning the rule against resale price 

20 maintenance will likely lead to higher prices paid by 

21 consumers and substantially harms the ability of dis22 count retail stores to compete. For 40 years prior to 

23 1975, Federal law permitted states to enact so-called 

24 ‘‘fair trade’’ laws allowing vertical price fixing. Stud25 ies conducted by the Department of Justice in the 

26 late 1960s indicated that retail prices were between 


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1 18 and 27 percent higher in states that allowed 

2 vertical price fixing than those that did not. Like3 wise, a 1983 study by the Bureau of Economics of 

4 the Federal Trade Commission found that, in most 

5 cases, resale price maintenance increased the prices 

6 of products sold. 

7 (5) The 5–4 decision of the Supreme Court ma8 jority in Leegin incorrectly interpreted the Sherman 

9 Act and improperly disregarded 96 years of antitrust 

10 law precedent in overturning the per se rule against 

11 resale price maintenance. 

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

13 (1) to correct the Supreme Court’s mistaken in14 terpretation of the Sherman Act in the Leegin deci15 sion; and 

16 (2) to restore the rule that agreements between 

17 manufacturers and retailers, distributors or whole18 salers to set the minimum price below which the 

19 manufacturer’s product or service cannot be sold vio20 lates the Sherman Act. 

21 SEC. 3. PROHIBITION ON VERTICAL PRICE FIXING. 

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

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

24 after the first sentence the following: ‘‘Any contract, com25 bination, conspiracy or agreement setting a minimum 


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

2 a retailer, wholesaler, or distributor shall violate this 

3 Act.’’. 

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

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

6 enactment of this Act. 

Æ 


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