The state of Maryland has passed a law that prohibits product manufacturers from setting minimum prices at which retailers can sell their products. Under the new law, which goes into effect on Oct. 1, retailers or the state can sue any manufacturer that attempts to impose minimum pricing on product resellers.
According to a Wall Street Journal article, the practice of establishing minimum retails has become more pronounced since a 2007 ruling by the U.S. Supreme Court decided that such deals were not always illegal under the nation's antitrust laws.
"Today there are an estimated 5,000 companies that have implemented minimum-pricing policies, much of it happening in the wake of the Supreme Court decision," Christopher Finnerty, an attorney who works with manufacturers on pricing issues, told the Journal.
Charles Shafer, a University of Baltimore law professor and president of the Maryland Consumer Rights Coalition, said the court's ruling in "basically abandoned the consumer" forcing states and the federal government to establish new laws that would eliminate minimum pricing requirements.
Retailers opposed to minimum pricing have argued it reduces competition and results in consumers being forced to pay higher prices for goods. The Maryland Retailers Association supports the new legislation.
Discussion Questions: Should manufacturers be able to set a minimum price that retailers can advertise or sell a product for? Is there a legitimate argument that retailer's pricing policies can hurt a brand's equity?