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Old July 24, 2007, 06:29 PM
PaulGalloway
 
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Default Implications of recent U.S. Supreme Court ruling?

Hi all,

I'm actually quite surprised I haven't seen any of the internet marketing experts talking about this . . .

Back in June, the U.S. Supreme Court ended the ban on price floor agreements between manufacturers and retailers . . .

I'm not an attorney, but from what I've read, it appears to me this ruling MAY make it legal to set "minimum prices" for a "resale rights" product.

One of the biggest drawbacks to offering resale rights to a digital product has been that sooner or later someone would start selling it for ridiculously low prices, thus devaluing the product for everyone who had purchased the resale rights.

There was no legal way to prevent this, because any attempt to set a minimum price would be treated by the courts as a violation of the Sherman Anti-Trust Act (it would be considered "Price fixing", a practice considered harmful to consumers).

But now each case must be considered individually, and the determining factor is whether or not the price agreement is beneficial to competition.

This excerpt from the New York Times article seemed to almost be talking about resale rights when I read it:

===========
For example, they said, such agreements can make it easier for a new producer by assuring retailers that they will be able to recoup their investments in helping to market the product.
===================

The whole article is here:

http://www.nytimes.com/2007/06/29/bu...ed9a&ei =5124

So what is your take on this whole thing? I'd love to hear from some of the legal eagles who frequent this board . . .

Best,

Paul
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