State Oil Co. v. Khan, 522 U.S. 3, 10 (1997)

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12

STATE OIL CO. v. KHAN

Opinion of the Court

such restrictions might avert vertical integration in the distribution process. Id., at 379-380. The Court drew the line, however, at permitting manufacturers to control product marketing once dominion over the goods had passed to dealers. Id., at 380.

Albrecht, decided the following Term, involved a newspaper publisher who had granted exclusive territories to independent carriers subject to their adherence to a maximum price on resale of the newspapers to the public. Influenced by its decisions in Socony-Vacuum, Kiefer-Stewart, and Schwinn, the Court concluded that it was per se unlawful for the publisher to fix the maximum resale price of its newspapers. 390 U. S., at 152-154. The Court acknowledged that "[m]aximum and minimum price fixing may have different consequences in many situations," but nonetheless condemned maximum price fixing for "substituting the perhaps erroneous judgment of a seller for the forces of the competitive market." Id., at 152.

Albrecht was animated in part by the fear that vertical maximum price fixing could allow suppliers to discriminate against certain dealers, restrict the services that dealers could afford to offer customers, or disguise minimum price fixing schemes. Id., at 152-153. The Court rejected the notion (both on the record of that case and in the abstract) that, because the newspaper publisher "granted exclusive territories, a price ceiling was necessary to protect the public from price gouging by dealers who had monopoly power in their own territories." Id., at 153.

In a vigorous dissent, Justice Harlan asserted that the majority had erred in equating the effects of maximum and minimum price fixing. Id., at 156-168. Justice Harlan pointed out that, because the majority was establishing a per se rule, the proper inquiry was "not whether dictation of maximum prices is ever illegal, but whether it is always illegal." Id., at 165-166. He also faulted the majority for conclusively listing "certain unfortunate consequences that maximum

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