In April 2000 Nine West settled charges brought by the Federal Trade Commission (FTC) that the shoe manufacturer entered into unlawful agreements with retailers to fix minimum resale prices and to restrict promotional periods when retailers could sell its shoes at discounted prices. Nine West allegedly had enforced these agreements by threatening to suspend and, in some instances, actually suspended supply to retailers who deviated from its policies. Minimum resale price maintenance agreements were at the time per se unlawful under Section 1 of the Sherman Act. To settle the FTC’s charges Nine West agreed to a consent order imposing a US$34 million fine and barring the company from controlling the resale prices of its footwear and from pressuring dealers to adopt or adhere to any resale price.
In November, Nine West filed a petition with the FTC urging the Commissioners to review terms of the consent order banning resale price maintenance in light of the Supreme Court’s decision in June of this year in Leegin Creative Products, Inc. v. PSKS, Inc., 127 S. Ct. 2705 (2007). Under Leegin, resale price maintenance schemes are now evaluated under the rule of reason standard. This paradigm shift in the antitrust laws, Nine West argues, requires that the order be reexamined. The petition also states that “considerations of fairness and the public interest” likewise necessitate that the order be revised to correct the competitive disadvantage that Nine West now faces because its competitors are free fix resale prices. The Commission will decide whether to approve a modified consent order with Nine West after considering responses received during the period for public comment which closed on December 6.