In a long-awaited decision involving women's leather fashion accessories manufacturer Leegin Creative Leather Products, Inc. and ladies’ clothing retailer PSKS, Inc., the US Supreme Court has found in favour of Leegin, overruling a nearly 100-year precedent that prohibited manufacturers from maintaining retail prices for their products.

The decision will have far-reaching effects on the manufacturing and retail industries as it affects how companies choose to price their goods.

Leegin’s pricing policy states that retailers selling its products, particularly the Brighton collection, should stick to the minimum price it has designated. Its client, PSKS, regularly flouted this rule, pricing items below the company’s minimum. Leegin responded by suspending Brighton shipments to the retailer and PSKS subsequently pursued legal action against Leegin, following a decline in profits. In an earlier ruling, a US court found in favour of PSKS and the company was awarded $3.6 million in damages. However, Leegin launched an appeal arguing that, instead of the ‘per se’ rule, which applied in the prior case, dating back to 1911, the court should use the ‘rule of reason’, which requires a case-by-case analysis of whether a vertical arrangement on price is anti-competitive.