Has The Supreme Court Banned Self-serve Gas Pumps?

The Supreme Court last Thursday decided that manufacturers can dictate the price retailers will charge for their products:

Leegin Creative Leather Products, Inc. v. PSKS, Inc.

The Court gave several "pro-competitive" results of "resale price maintenance" agreements, formerly known as retail price fixing. I'm only going to write about one.

This is a direct quote that I read four or five times, "[m]inimum resale price maintenance can stimulate interbrand competition - the competition among manufacturers selling different brands of the same type of product - by reducing intrabrand competition - the competition among retailers selling the same brand."

Go ahead and read that a few times, I'll wait. They seem to be saying that if a manufacturer makes the retailer sell the widget for an agreed price, that has a very nice profit margin, the retailer will respond by investing "in tangible or intangible services or promotional efforts that aid the manufacturer's position as against rival manufacturers." This, the Court says, will give consumers more choices: low price and service brands, high price and service brands and brands that fall between.

OK. But don't we already have that? Nordstrom and Parisian. Macy's and all of its competitors that it bought out. Sears and J.C. Penney. Wal-Mart and Target. Well, yes. But the Court doesn't appear to want the Wal-Marts and Targets to succeed. They have decided that we as consumers aren't getting what we really want, better service. Yes, we all complain about bad service; but, when was the last time you pulled up to the full service pump at the gas station?

The Court: "If the consumer can…buy the product from a retailer that discounts because it has not spent capital providing services or developing a quality reputation, the high-service retailer will lose sales to the discounter, forcing it to cut back its services to a level lower than consumers would otherwise prefer. Minimum resale price maintenance alleviates the problem because it prevents the discounter from undercutting the service provider." (Emphasis added.)

I'm glad the Court has identified this "problem" and is mandating that I pay for "services" that the Court somehow knows I "would otherwise prefer" if there were no Walmarts, Targets, Costcos, internet discounters and so on.

There is some hope. The Court's decision didn't get rid of a law, it got rid of a rule the Court has been applying in anti-trust cases for just under a hundred years. Congress is free to pass a law barring retail price maintenance agreements. Maybe that would take its collective mind off of immigration and Iraq where it is singularly ineffective.

There's another hope. I have a feeling that the Wal-Marts, Targets and Costcos will tell manufacturers demanding price maintenance agreements to "shove it." If they do, the manufacturers probably have to fold and the opinion becomes a nullity. I also don't see car manufacturers trying to force agreements on their dealers. They don't have the clout in today's economy to do it. TV's, computers, cell phones? I think there is way too much competition and a consumer mindset that sees the products for the most part as fungible for Sony, Dell or Motorola to try it. Apple, on the other hand being a niche player with cachet? Don't know.