Price Ruling Struck Down

By Childs, Kelvin | Editor & Publisher, November 15, 1997 | Go to article overview

Price Ruling Struck Down


Childs, Kelvin, Editor & Publisher


The U.S. Supreme Court ruled unanimously, Nov. 4 that a manufacturer's vertical setting of prices is not a per se, or automatic, violation of the Sherman Antitrust Act.

In so doing, the court swept aside a 1968 ruling against a newspaper company that had sued an independent distributor who was charging his home delivery customers more than the paper wished.

The ruling gave newspapers more freedom to set the prices that distributors charge readers.

In State Oil vs. Khan the court held that the reasoning behind the earlier Albrecht vs. Herald Co. decision, which was meant to protect inter-brand competition, has been eroded by subsequent decisions.

Justice Sandra Day O'Connor wrote for the court, "Vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason." The rule of reason calls for case-by-case evaluation of anti-competitive effect rather than the per se assumption that price fixing is always illegal.

Several media companies -- Advance Publications Inc., A.H. Belo Corp., Cox Enterprises Inc., Dow Jones & Co., Gannett Co., Knight-Ridder Inc., New York Times Co. and Washington Post Co. -- and the Newspaper Association of America had filed a joint friend-of-the-court brief in support of State Oil. The Justice Department also argued in favor of overturning Albrecht.

State Oil exclusively, supplied gasoline to a service station and convenience store owned by Barkat U. Khan under terms that set a suggested retail price for the gasoline and provided a 3.25 [cts.] per gallon profit margin. The agreement stipulated that Khan could set any price he wished, but if prices were raised above the margin, the excess profit had to go to State Oil.

Lowering the price would cut into the margin accordingly.

Khan fell behind on lease payments and was evicted, and the gas station was then run for several months by a court-appointed receiver who was not obligated to honor State Oil's pricing terms The receiver lowered prices on regular gasoline and raised them on premium gasoline, obtaining an overall profit margin that was more than 3. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Price Ruling Struck Down
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.