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WASHINGTON — The Federal Trade Commission has partially reversed an order against Nine West Group Inc. and now will allow the company to set the minimum price at which the brand’s footwear can be sold at retail, but only under the agency’s scrutiny.
Following a Supreme Court decision in June, the FTC voted on May 6 to modify an order it imposed in 2000 against Nine West that charged the company with violating antitrust laws and prohibited it from fixing retail prices with distributors for 20 years.
The FTC’s new order came on the heels of a Supreme Court case, Leegin Creative Products Inc. v. PSKS Inc., in which the High Court struck down a 96-year-old ban on minimum pricing agreements, also known as “resale price maintenance” agreements, giving brands the potential to enforce prices with retailers.
The 5-to-4 decision gave lower courts the leeway to determine, on a case-by-case basis, whether minimum pricing agreements are anticompetitive. Previously, such agreements were illegal on their face.
In the majority opinion, the Supreme Court justices, while acknowledging minimum pricing agreements could be abused by powerful manufacturers or retailers, said such arrangements could also spur competition.
Nine West filed a petition with the FTC in October seeking to reopen the 2000 case and have it modified, arguing such agreements would “enable Nine West to develop and maintain favorable brand integrity more effectively, thereby enhancing competition at the interbrand level.”
The FTC agreed to modify its order on the condition Nine West provide periodic reports on its use of the pricing agreements to the FTC in order to analyze its effect on competition. The new order doesn’t change separate settlement agreements Nine West reached in 2000 with various states for violations of antitrust laws.