united-states competition export
Is it legal for a company to enforce price minimums in the USA?
<p>When exporting from Europe to the USA but not sourcing directly from the manufacturer, it is common to receive communications from companies along the lines</p>
<p>(1) in the USA we have a minimum price policy, which you are breaking/you have to source from our US supplier</p>
<p>(2) We forbid export of this product to the USA/it can only be done through authorized channels.</p>
<p>Is it the case that a company is allowed to prevent export of an identical product from a different country. Or is this anticompetitive behaviour which legislation prevents?</p>

<p><strong>It didn’t work for Nintendo</strong></p>
<p>Nintendo used to have a policy of setting minimum retail prices for its products. If retailers didn’t comply, Nintendo would decrease or eliminate their supply.</p>
<p>In 1991, the FTC investigated Nintendo for price fixing, and Nintendo agreed to pay some money back and to reframe the minimum price as more of a “suggestion.”</p>
<p>Technically, this was a settlement, so the courts didn’t actually rule against (or in favor of) Nintendo. But being investigated by the FTC is already pretty serious.</p>
<p><a href="https://www.upi.com/amp/Archives/1991/04/10/Nintendo-gives-coupons-to-settle-price-fixing-case/5169671256000/" rel="nofollow noreferrer">https://www.upi.com/amp/Archives/1991/04/10/Nintendo-gives-coupons-to-settle-price-fixing-case/5169671256000/</a></p>

<p>It may be legal. Before <a href="https://supreme.justia.com/cases/federal/us/551/877/" rel="nofollow noreferrer">Leegin Creative Leather Products, Inc. v. PSKS, Inc.</a>, 551 U.S. 877 (2007) it was illegal since 1911 under <a href="https://supreme.justia.com/cases/federal/us/220/373/" rel="nofollow noreferrer">Dr. Miles Medical Co. v. John D. Park &amp; Sons Co.</a>, 220 U. S. 373 which held that minimum pricing was <em>per se</em> illegal. Leegin overturned that ruling. The basic engine behind this decision is antitrust legislation (§1 of the Sherman Antitrust Act), and the premise that manufacturer price controls might reduce competition. Now the matter must be decided on the basis of judged based on the <a href="https://en.wikipedia.org/wiki/Rule_of_reason" rel="nofollow noreferrer">rule of reason</a>, which is a doctrine saying how that act is to be interpreted. Now,</p>
<p>The accepted standard for testing whether a practice restrains trade in violation of §1 is the rule of reason, which requires the factfinder to weigh &quot;all of the circumstances&quot;. This</p>
<blockquote>
<p>rule distinguishes between restraints with anticompetitive effect that
are harmful to the consumer and those with procompetitive effect that
are in the consumer’s best interest. However, when a restraint is
deemed &quot;unlawful per se,&quot; ibid., the need to study an individual
restraint’s reasonableness in light of real market forces is
eliminated. Resort to per se rules is confined to restraints &quot;that
would always or almost always tend to restrict competition and
decrease output.&quot; Thus, a per se rule is appropriate only after courts
have had considerable experience with the type of restraint at issue</p>
</blockquote>
<p>Bear in mind that states can also have separate antitrust laws.</p>
<p>A manufacturer could independently make price guidelines part of their agreement with retailers, and can stop dealing with sellers who do not follow the policy, on a &quot;take it or leave it&quot; basis. Violating a price-suggestion is not directly actionable, but can legally result in a &quot;we won't deal with you anymore&quot; response. Antitrust issues arise if manufacturers conspire to get a result, or if retailers conspire. On the face of it, forbidding importation to the US except through a specific channel smells strongly of anticompetitive behavior.</p>
