FTC MODIFIES ORDER PROHIBITING NINE WEST GROUP, INC. FROM FIXING RETAIL PRICES WITH DEALERS

On May 6, 2008 the Federal Trade Commission (“FTC”) modified its previous order in 2000 prohibiting Nine West Group, Inc. from fixing retail prices with dealers. The FTC modified the order by granting Nine West permission to engage in resale price maintenance (RPM) with a caveat that the company would have to provide periodic reports detailing the effects of these agreements on competition in the industry.

Under the 2000 order, the FTC charged Nine West with retail price fixing in violation of federal antitrust laws. Nine West also entered into settlements with several states for violating various state antitrust statutes. In 2007, the U.S. Supreme Court in Leegin Creative Products, Inc. v. PSKS, Inc reversed a 1911 decision. stating in its opinion that it is not a violation of antitrust laws for companies to set minimum resale prices with retailers and that these retail price maintenance agreements must be analyzed on a case by case basis.

In October 2007, Nine West Footwear Corporation, successor of Nine West Group, Inc., filed a petition asking the FTC to modify its order in light of the Leegin ruling. The Commission concluded that Nine West’s use of RPM at this time does not pose any potential competitive concerns but that it would have to provide reports that documented the effects of these retail price maintenance agreements on the company’s prices and output. These reports would be used to “challenge [Nine West’s] use of such a program should it appear to be illegal.”

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com