Maryland Bans Minimum Pricing Agreements

As we have discussed before, minimum pricing agreements help control the incentive conflict between retailers and manufacturers. In 2007, the Supreme Court ruled that such agreements were not automatically illegal under federal law. In response, states like Maryland have started passing laws to prohibit the practice.

Under the new state law, retailers doing business in Maryland -- as well as state officials -- can sue manufacturers that impose minimum-pricing agreements. The law also covers transactions in which consumers in Maryland buy goods on the Internet, even when the retailer is based out of state. That could potentially affect manufacturers throughout the country.