Definition
Fair trade laws permitted suppliers of branded goods to impose resale price maintenance contracts fixing minimum retail prices. The Consumer Goods Pricing Act of 1975 outlawed such practices.
Resale price maintenance laws are federal and state statutes permitting agreements between a supplier and a retailer that state that the latter should not resell commodities below a specified minimum price.
History
The Federal Trade Commission Act of 1914 placed a blanket prohibition against “unfair methods of competition” and “unfair or deceptive acts or practices,” and created the Federal Trade Commission (FTC) to enforce it.
In the Miller-Tydings Resale Price Maintenance Act of 1937, resale price maintenance contracts prescribing minimum prices for name brand commodities were made exempt from the Sherman Antitrust and Federal Trade Commission acts in those states having fair trade laws permitting such contracts.
The McGuire-Keogh Fair Trade Enabling Act of 1952 declared that exemption of resale price maintenance agreements from antitrust laws as provided under the Miller-Tydings Resale Price Maintenance Act would be extended to non-signer agreements (whereby all dealers are bound to the contract if only one signs) in states that have non-signer clauses in their fair trade statutes.
The Consumer Goods Pricing Act of 1975 repealed the Miller-Tydings Resale Price Maintenance Act and the McGuire-Keogh Fair Trade Enabling Act, thereby removing federal antitrust exemption for resale price maintenance agreements.
References
- American Marketing Association, AMA Dictionary.