WASHINGTON, June 28 — Striking down an antitrust rule nearly a century old, the Supreme Court ruled on Thursday that it was not automatically unlawful for manufacturers and distributors to agree on minimum retail prices.
The decision will give producers significantly more, though not unlimited, power to dictate retail prices and to restrict the flexibility of discounters.
Five justices, agreeing with the nation’s major manufacturers, said the new rule could in some instances lead to more competition and better service. But four dissenting justices agreed with 37 states and some consumer groups that abandoning the old rule could result in significantly higher prices and less competition for consumer and other goods.
The court struck down the 96-year-old rule that resale price maintenance agreements were an automatic, or per se, violation of the Sherman Antitrust Act. In its place, the court instructed judges considering such agreements for possible antitrust violations to apply a case-by-case approach, known as a “rule of reason,” to assess their impact on competition. The new rule is considerably more favorable to defendants.
The decision was handed down on the last day of the court’s term, which has been notable for overturning precedents and for victories for big businesses and antitrust defendants.
No points for guessing which five justices voted in favor of big business.