Free Riding and Resale Price Maintenance, a Love and Hate Relationship

Abstract

Is free riding bad for competition in the markets? Is it good and necessary to promote competition in the markets? Does free riding (being good or bad) depend on a market structure issue? A new pro-competitive justification arose since Leegin overturned Dr. Miles Court decision giving the business operators a rule of reason in order to determine antitrust harm by a resale price maintenance (RPM) conduct. American courts have dealt with free riding as a pro-competitive justification basing the analysis of this decision on the defendant’s rule of reason. Should American Courts reevaluate their holdings on minimum RPM’s, or should they keep tolerating manufacturer and retailers “free riding” on their leniency for anticompetitive effects?