Discount stores would find it easier to sue manufacturers who refuse to sell to them at the behest of high-price retailers, under a bill approved by the House.
Challenging the threat of a veto by President Bush, the House voted 235-157 Wednesday for legislation restoring discounters' ability to win jury trials for suits alleging that their competitors and manufacturers conspired to keep retail prices from falling below a fixed level."Consumers must now buy highbrow fashions at ritzy-glitzy prices because highbrow and ritzy-glitzy (suppliers) can discuss price ranges and still be exempt from anti-trust laws," said Rep. Lawrence J. Smith, D-Fla.
The legislation was introduced following the Justice Department's refusal to pursue any vertical price-fixing cases under the nation's anti-trust laws since 1981, when Republicans assumed control of the White House.
Compounding the problem, according to consumers groups, were Supreme Court decisions in 1984 and 1988 that dismissed private suits because discounters had not shown that their supplies were cut off because they were charging prices below those suggested by a manufacturer.
The legislation was supported by 42 of the nation's 50 state attorneys general, who contend that such price collusion often is done with a nod, and without a paper trail of written formal agreements.
The result, according to Consumers Union, is that larger dealers are coercing manufacturers to terminate contracts with rival discounters, and various brand names are disappearing from the shelves of discount stores.
Kristin Rand, a lawyer for the consumer group, cited a suit dismissed by a federal judge in New York in January in which Kids 'R' Us, a nationwide discounter of children's clothing, accused Macy's of pressuring two manufacturers of children's swimwear to stop supplying it.
Similar legislation has been approved by Senate Judiciary Committee, although Republican Sens. Strom Thurmond of South Carolina and Orrin Hatch of Utah have threatened to mount a filibuster if it's brought to the Senate floor.