Antitrust Policy towards Resale Price Maintenance following Leegin and ebooks

About this event

On June 28, 2007, the US Supreme Court announced its decision in Leegin to revoke a 96-year precedent on the appropriate antitrust treatment of Resale Price Maintenance (RPM). Vertical price restraints such as RPM would be evaluated not as a per se offence but under the Rule of Reason.

Applying the new standard, both the pro-competitive and anti-competitive dimensions of any particular restraint would be evaluated and balanced against each other, and that only those where the anti-competitive effects predominate would violate the antitrust laws.

This event explores both the law and economies of the new directives, and also review the first lower court decision dealing with these matters. Discussions will also focus on the application of competition law to RPM in Europe (EU and the UK) in various contexts, including selective distribution and commercial agency agreements.

Chair 

Dr Ioannis Lianos (UCL)

Keynote speaker

Professor William S Comanor (University of California)

Commentators

• Professor Alison Jones (King's College London)
• Dr Nelson Jung (UK Office of Fair Trading) 
• Dr Abel Mateus (EBRD / UCL)
• Dr Antonio Bavasso (UCL / Allen & Overy LLP)

About the keynote paper

On June 28, 2007, the U.S. Supreme Court by the vote of five to four announced its decision in Leegin to revoke a 96-year precedent on the appropriate antitrust treatment of Resale Price Maintenance (RPM). Henceforth, vertical price restraints such as RPM would be evaluated not as a per se offense but under the Rule of Reason. Applying the new standard, both the pro-competitive and anti-competitive dimensions of any particular restraint would be evaluated and balanced against each other, and that only those where the anti-competitive effects predominate would violate the antitrust laws.

However, the Court offered little guidance as to how this process should proceed. Instead, what it offered was a brief discussion and a “laundry list” of factors which might support one side or the other. Although many of them were useful and on point, it provided little guidance as to how they should be measured or applied. Those matters were left specifically to the lower courts.

In effect, the Supreme Court announced a new policy for the antitrust treatment of RPM, but then left it to others to fashion its details. Because, of course, “the devil lies in the details,” the success or failure of the new policy is yet to be determined. Much depends on how the lower courts apply these new directives.

On the contrary, the block exemption 330/2010 in the EU on vertical agreements has maintained RPM as a hardcore restriction, although it has also opened the door for some efficiency justifications to be considered under Article 101(3) TFEU and specified the scope of the commercial agency immunity for RPM under Article 101(1) TFEU.

After a keynote speech by professor William S. Comanor on the law and economics of RPM in the US following Leegin and a review of the first lower court decision dealing with these matters, the roundtable speakers will focus on the application of competition law to RPM in Europe (EU and the UK) in various contexts, including selective distribution and commercial agency agreements. The recent ebooks case and the scope of the commercial agency agreements immunity will be thoroughly discussed.

About the keynote speaker

William S. Comanor is Professor of Economics at the University of California, Santa Barbara (UCSB), and also Professor of Health Services in the UCLA School of Public Health. At UCLA, he serves as Director of the UCLA Research Program in Pharmaceutical Economics and Policy and directs a seminar on pharmaceutical economics. At UCSB, he is Director of the MA Program in Economics and regularly teaches a course in Antitrust Economics. He received his Ph.D. in economics from Harvard University and was a post-doctoral fellow at the London School of Economics.

Prior to joining the faculty at the University of California, he was on the faculty of both Harvard and Stanford Universities. He has authored and edited 5 books and over 100 professional articles in economics; and was designated a Distinguished Fellow of the Industrial Organization Society in 2003.

In addition to his academic positions, Prof. Comanor has served twice with the federal antitrust enforcement agencies in Washington, DC. He served as Special Economic Assistant to the head of the Antitrust Division, U.S. Department of Justice in 1965-66, and also as Chief Economist and Director of the Bureau of Economics, U.S. Federal Trade Commission from 1978 to 1980. 

Download the presentations

• RPM presentation Comanor (PowerPoint)
• RPM presentation Jung (PowerPoint)
• RPM presentation Mateus (PowerPoint)
• RPM presentation Jones (PowerPoint)
• RPM presentation Bennett (PowerPoint)