May 14, 2008 / Law Alert

Federal Trade Commission Applies Supreme Court Decision in Leegin To Resale Price Maintenance Consent Order

On May 6, 2008, the Federal Trade Commission (FTC), relying on the Supreme Court's recent decision in Leegin Creative Products, Inc. v. PSKS, Inc., 127 S. Ct. 2705 (2007), modified, in part, a 2000 FTC order prohibiting the women's footwear company, Nine West, from engaging in resale price maintenance (RPM) agreements. Applying the rule of reason indicated by Leegin, the FTC found that Nine West demonstrated that the company's use of resale price maintenance did not pose any competitive concerns in light of changed conditions of law and public interest. The FTC concluded that because Nine West lacked the market power to harm consumers through its use of resale price maintenance, its current use of RPM did not pose any potential competitive concerns. It allowed Nine West to engage in RPM agreements but also required the company to file periodic reports describing the effects of its use of RPM agreements.