Supreme Court Ruling Affect Vehicle Pricing
The U.S. Supreme Court ruling last week in Leegin Creative Leather Products v. PSKS, Inc., ends a long-standing per se rule against manufacturer agreements with retailers to set minimum resale prices. The court in its ruling held that vertical price restraints will now be judged by a “rule of reason” test. The 5-4 decision overrules a nearly 100-year-old standard in antitrust law based upon the proposition that pricing agreements between manufacturers and retailers are illegal. The new rule will require cases that may violate antitrust laws in which manufacturers demand that retailers not sell their products below a certain price be reviewed individually.
Automotive News reports that the ruling opens a new chapter in vehicle pricing, and could boost no-haggle pricing and force more dealers to upgrade their facilities,
NADA said the decision could lead to higher vehicle prices. Dealers know their markets best, and each dealer should be free to set his or her prices individually, NADA said in a statement.
Some industry lawyers predict the ruling will have a big impact, especially on premium brands, said Automotive News.
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