WASHINGTON — Bush administration lawyers urged the Supreme Court on Monday to repeal a nearly 100-year-old rule that bars manufacturers from fixing the retail prices of their products.
In a case involving a California company, the government argued that the price-fixing rule was too rigid and made it harder for companies to market their products with special displays in retail stores.
But several justices said a repeal would hurt consumers and lead to higher prices. It could mean "every American will pay far more for the goods they buy," said Justice Stephen G. Breyer, citing examples as diverse as jeans and medicines. Why should we run that risk? he asked.
"Price is not the only thing consumers care about," replied Deputy Solicitor Gen. Thomas G. Hungar.
The high court finds itself at a crossroads in the area of antitrust law and price fixing. The National Assn. of Manufacturers and other business groups have joined the administration in urging the court to limit antitrust enforcement.
Their lawyers say companies can promote their brands as they see fit. Sometimes that could mean making contracts with retailers to charge a fixed minimum price for a product, they say.
Since 1911, however, such contracts or agreements have been illegal under the antitrust laws.
The Consumer Federation of America says a repeal of this rule would allow manufacturers and retailers to set higher prices. It would hurt discounters as well as shoppers who go online to look for good deals, the advocacy group contends.
The justices appeared to be split during Monday's argument. Breyer and the other liberal justices questioned the wisdom of overturning a rule that has helped create a highly competitive retail market in the United States that includes huge discounters such as Wal-Mart Stores Inc. and Target Corp.
Lawmakers could choose to repeal the anti-price-fixing rule, noted Justice Ruth Bader Ginsburg. "The court should allow them to make the change," she said.
The conservatives, led by Justice Antonin Scalia, said they agreed the old rule against retail price fixing was outdated and should be repealed.
"The mere fact that [repeal] increases prices doesn't prove anything," Scalia said. "I just don't think that what the customers want is cheap [prices]. I think they want service ... and selection," he said. If manufacturers cannot "assure retailers a cushion" with a fixed price, they will not have "the big showroom" to promote the product, he said.
