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States Challenge Resale Price Maintenance Agreement; Settlement

By Hanno Kaiser

In a complaint filed on 3/21/08 in the S.D.N.Y., the states of New York, Illinois, and Michigan challenged what appears to be a pure intra-brand resale price restraint between the manufacturer of the Aeron chair and its distributors. The manufacturer required the retailers not to advertise below a specified price.

As a result of these anticompetitive practices, consumers were denied the benefits of unrestrained price competition on the Aeron chairs and Aeron prices were raised above their competitive levels.

This case addresses the issue of RPM after Leegin head on. The plaintiffs’ don’t seem to claim any loss of inter-brand competition. Rather

HMH [the manufacturer] implemented its SRP [suggested resale price] policy to improve retail margins and by most accounts, the program did so. The few retailers who chose not to follow the SRP were either terminated or lost access to the Aeron they advertised at less than the SRP. The vast majority of retailers raised and maintained their retail prices at the SRP level.

The case settled the same day for $750,000.

Full post as published by Antitrust Review on March 26, 2008 (boomark / email).