WASHINGTON – With the U.S. Supreme Court ruling that manufacturers could set and enforce minimum prices for their products, a century-old precedent on price agreements in American retailing was upended, The Wall Street Journal reports. However, experts say the pricing practices for such products as cars, electronics, books or shampoos is not likely to change.

The Supreme Court’s ruling, which was handed down in late June, changes the way many manufacturers do business with companies like convenience stores that distribute their products. In Leegin Creative Leather Products, Inc. v. PSKS, Inc., the court found that federal antitrust law permits manufacturers to set minimum prices for retailers, provided the price floor stimulates competition with other brands of the same product.

Almost a hundred years ago, the U.S. Supreme Court ruled that the federal antitrust laws categorically prohibit a manufacturer from requiring a distributor to agree to charge a minimum retail price.

But with Leegin, the court adopted a case-by-case, or “rule of reason,” approach to such agreements, recognizing that they may promote competition at the retail level among different brands. As a result, the door is open for manufacturers to include in their distribution agreements a requirement that distributors charge a minimum retail price.

This ruling is the latest in a series cutting back on so-called “per se rules” against business practices. For example, the 1997 court applied a rule-of-reason analysis to maximum resale price maintenance, allowing manufacturers to cap the price distributors can charge, unless the distributors can show the cap reduces overall competition. In 1977, the court had ruled that non-price restrictions on distributors (such as limiting them to defined territories) must be judged under the rule of reason.

The Leegin decision dramatically changes federal antitrust law, while not necessarily changing the antitrust laws of the states and territories, all of which have until now outlawed minimum resale price maintenance by statute or court decision.

How state courts and legislatures will react to the decision is not at all clear. Although many likely will follow the Supreme Court’s lead, the 5-4 split decision included an extensive dissenting opinion that may embolden some states to reject the new federal rule, as many did when the Supreme Court interpreted federal antitrust law to bar damages actions by indirect purchasers.