The 5-4 decision means that a TV maker could require a High-Definition TV to be sold at a set price, thereby denying a discount store or online retailer to offer a lower price to boost sales and customer traffic.
The ruling could have a dramatic impact on how high-def sets are marketed in the future, particularly during the competitive holiday season. And it could mean that HDTV prices will be higher than anticipated in the coming months.
Last year, discount stores and ecommerce sites triggered a HDTV price war by offering some large-screen Plasma and LCD sets for under $1,000 -- well under the TV makers' suggested retail prices. The discounting led to reduced profits for both TV makers and big-box CE retailers such as Circuit City.
However, under today's court ruling, it would appear that retailers could not offer those discounts without the permission of the manufacturer. The Associated Press reports that the court ruled that minimum price agreements are legal if they further competition in the marketplace.
The court decision overturned a 96-year-old law against "minimum pricing" agreements. But Justice Anthony Kennedy wrote in his majority opinion that a minimum pricing agreement could promote competition, the AP reports.
Justice Stephen Breyer disagreed.
"The only safe predictions to make about today's decision are that it will likely raise the price of goods at retail," Breyer wrote in dissent, according to the AP.
The decision was based on a case in California where a leather company had entered into an agreement with select retailers to maintain certain prices for its goods. The two parties wanted to ensure that the chosen retailers could effectively compete with discount stores which might offer lower prices for the leather products.
According to the AP, Kennedy's majority opinion was shared by Justices John Roberts, Clarence Thomas, Samuel Alito and Antonin Scalia. Dissenting with Breyer were Justices John Paul Stevens, David Souter and Ruth Bader Ginsburg.
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Phillip Swann is
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