Tuesday, May 06, 2008

FTC Modifies Order to Permit Nine West to Set Resale Prices

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

An FTC consent order that prohibited Nine West Group, Inc., a major manufacturer and seller of women's shoes, from engaging in resale price maintenance (RPM) agreements with dealers has been modified by the Commission in light of the 2007 U.S. Supreme Court decision in Leegin Creative Products, Inc. v. PSKS, Inc. (2007-1 CCH Trade Cases ¶75,753).

The Commission granted in part an October 2007 petition from Nine West Footwear Corporation, successor to Nine West Group, Inc., to modify a 2000 FTC order (FTC Complaints and Orders Transfer Binder 1997-2001, ¶24,707). The order banned Nine West, for a 20-year period, from threatening or penalizing dealers that sell below the company’s designated retail prices.

Nine West had argued that the Leegin decision, which reversed a long-standing precedent that held all RPM agreements per se illegal, constituted a dramatic change in antitrust law and required that the order be reexamined. The American Antitrust Institute and a number of state attorneys general had asked the Commission to deny the petition.

State Settlements

In 2000, Nine West also entered into separate settlements with the attorneys general for 56 U.S. states, territories, commonwealths, and possessions. Nine West's settlement with the attorneys general required the company to pay $34 million. The money collected was to be used to fund women's health, educational, vocational, and safety programs. The FTC's action does not affect the state orders.

The modified order regarding In the Matter of Nine West Group Inc., FTC Dkt. C-3937, announced May 6, 2008, will appear in the CCH Trade Regulation Reporter.

The FTC news release and Nine West’s petition appear on the FTC website.

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