Low prices are one of antitrust law’s traditional promises to society. Resale price maintenance ("RPM"), the practice whereby a manufacturer sets pricing rules for
retailers, artificially inflates prices and, thus, allegedly runs afoul of antitrust laws. The practice emerged in the last quarter of the nineteenth century with the
rise of advertising and has been one of the most controversial antitrust topics ever since. At the heart of the controversy lies the question of why would manufacturers
ever be interested in high retail prices that seem to protect retailers' profits and hurt manufacturers. One of the oldest answers that manufacturers provide is that,
for certain branded goods, high prices improve sales, while discounts harm the appeal of brands and adversely affect sales. Courts and scholars have always been
aware of this argument, yet kept focusing on other explanations for the practice. This Article examines popular RPM theories, explains why manufacturers
frequently use RPM to protect the appeal of their products as status goods, and argues that no per se rule for RPM is warranted.
A century of debates over resale price maintenance (RPM) has generated hundreds of articles that develop a handful of theories. This article introduces a new theory—the “image theory,” which builds on one of the oldest—yet neglected—explanations that manufacturers offer for RPM: uniform retail prices for a branded good maintains the product’s exclusive image, thereby luring consumers and increasing revenues.