MAY 11 I PRICING I LEGAL
Maryland Bans
Minimum Pricing

According to an April 28 Wall Street Journal article, Maryland has passed a law that prohibits manufacturers from requiring retailers to charge minimum prices for their goods. It will take effect Oct. 1.

Under the new state law, retailers doing business in Maryland can sue manufacturers that impose minimum-pricing agreements. The law also covers transactions in which Maryland consumers buy goods on the Internet, even if the retailer is based in another state.

The bill won the support of the Maryland Retailers Association. Its members include Wal-Mart, Target and Sears.

The legislation is one in a series of recent initiatives to bypass the Supreme Court’s 2007 decision that no longer made minimum price agreements automatically illegal under federal antitrust law. In the 5–4 decision, a majority of Supreme Court justices said such agreements must be reviewed on a case-by-case basis.

“We’re making it clear to the judges in this state that Maryland was not adopting the Supreme Court decision,” said state Sen. Brian Frosh, who introduced the bill.

Maryland already has an antitrust law that bans price fixing. But because Maryland is one of a number of states where federal-court interpretations take precedent over state law, the Supreme Court’s ruling essentially nullified state law. By creating a new law that explicitly bans all minimum-pricing agreements between manufacturers and retailers, state legal experts say Maryland is now able to pre-empt the high-court ruling. Legal experts say more than 30 other states may take similar action in enacting such a law. MI