The Paul, Weiss Antitrust Practice advises clients on a full range of global antitrust matters, including antitrust regulatory clearance, government investigations, private litigation, and counseling and compliance. The firm represents clients before antitrust and competition authorities in the United States, the European Union, the United Kingdom and other jurisdictions around the world.
Supreme Court Overrules Dr. Miles and Holds That Vertical Price Restraints Are Not Per Se Illegal
July 2, 2007 Full PDF
On June 28, 2007, the U. S. Supreme Court issued a decision overruling Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911), and holding that agreements setting minimum resale prices are no longer per se illegal under Section 1 of the Sherman Act. While the Court's decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., No. 06-480, gives businesses at virtually every level of the supply chain additional flexibility to reach vertical price agreements, it does not mean that all such agreements are lawful. Businesses considering such an agreement will need to evaluate carefully whether it would pass muster under the rule of reason, which requires an analysis of its expected benefits and potential anticompetitive effects. They must also take care to ensure that discussions concerning such vertical price agreements do not give rise to horizontal agreements between competitors that could constitute per se antitrust violations.