Bush may still veto RPM - resale price maintenance legislation - column

Bush May Still Veto RPM

Last year, after months of silence, Bush administration antitrusters announced what appeared to be a significant break with the enforcement philosophies of their predecessors.

For many discounters, those were particularly welcome words. During the previous eight years, Reagan appointees at the Justice Department and the Federal Trade Commission were busy undercutting the legal safeguards which protect discounters from resale price fixing conspiracies. And thanks to some help from the Supreme Court, they were at least partially successful.

Surely the new broom being pushed by the Bush administration's antitrust team would clear a path for renewed federal enforcement of the laws against resale price maintenance. At least that was the hope of many discounters. Those hopes were dashed, however, when Bush officials from the Justice Department and the FTC showed their true colors during the Congressional debate over the "Price Fixing Prevention Act of 1989."

That bill, which reverses recent Supreme Court rulings that made it nearly impossible to prove RPM conspiracies, passed the House by a lopsided 235-to-157 margin. But with no thanks to Bush's antitrust policy makers.

Indeed, during the heat of the Congressional debate over H.R. 1236, both Attorney General Richard Thornburgh and FTC chairman Janet Steiger tried to scuttle the legislation.

Thronburgh argued that passage of the discount industry-supported legislation would threaten "an essential part of our free enterprise system"--the "freedom of a manufacturer unilaterally to decide whether or not to deal with a distributor." FTC chairman Steiger went even farther in attacking the antiprice fixing legislation. Rather than foster competition, the bill could "stifle some pro-competitive conduct and [inappropriately] expose suppliers to antitrust liability," she said.

The double-barreled attack on H.R. 1236 by Thornburgh and Steiger is doubly bad news for discounters. On one hand, it suggests that even if companion legislation passes the Senate, President Bush is sure to come under pressure from his antitrusters to veto it. On the other hand, the opposition of Thornburgh and Steiner to the anti-RPM bill means that the control of both FTC and Justice will remain firmly in the hands of people with little sympathy for the concerns of discounters.

COPYRIGHT 1990 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2004 Gale Group