The short answer is “yes.” As with all things legal, however, the “Devil is in the details.”

Until 2007, manufacturers who dictated the minimum price at which their customers could resell their products, would automatically violate the anti-trust laws as engaging in an illegal “vertical restraint on trade.” This is what is referred to as a “per se” violation of the law.

In 2007, the U.S. Supreme Court determined that all manufacturer-imposed vertical price programs should be evaluated using a “rule of reason” approach. This means that the court must look at all of the facts and circumstances surrounding a particular practice.  According to the Court, “Absent vertical price restraints, the retail services that enhance interbrand competition might be underprovided. This is because discounting retailers can free ride on retailers who furnish services and then capture some of the increased demand those services generate.” Note that this change is in federal standards; some state antitrust laws and international authorities still view minimum price rules as illegal, per se.

If a manufacturer, on its own, adopts a policy regarding a desired level of prices, the law allows the manufacturer to deal only with retailers who agree to that policy. A manufacturer also may stop dealing with a retailer that does not follow its resale price policy. That is, a manufacturer can implement a dealer policy on a “take it or leave it” basis.

For more information on a manufacturer’s ability to impose “vertical” requirements within the supply chain, visit the Federal Trade Commission’s website.