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{{Infobox SCOTUS case
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  |Litigants=Albrecht v. Herald Co.
  |ArgueDate=November 9
  |ArgueYear=1967
  |DecideDate=March 4
  |DecideYear=1968
  |FullName=Lester J. Albrecht v. Herald Co., DBA Globe-Democrat Publishing Co.
  |USVol=390
  |USPage=145
  |ParallelCitations=88 S.Ct. 869; 19 L.Ed.2d 998
  |Prior=Certiorari to the United States Court of Appeals for the Eighth Circuit
  |Subsequent=
  |Holding=Wholesalers cannot require franchisees and retailers of their products to sell items at a certain price.
  |SCOTUS=1967-1969
  |Majority=White
  |JoinMajority=Warren, Black, Brennan, Fortas, Marshall
  |Concurrence=Douglas
  |Dissent=Harlan
  |Dissent2=Stewart
  |JoinDissent2=Harlan
  |LawsApplied=[[Clayton Antitrust Act]], {{usc|15|15}}; [[Sherman Antitrust Act]], {{usc|15|1}}
  |Overruled=''[[State Oil Co. v. Khan]]'' (1997)
}}


'''''Albrecht v. Herald Co.''''', {{scite|390|145|1968}}, was a decision by the [[Supreme Court of the United States|United States Supreme Court]], which held that wholesalers could not require franchisees and retailers of their products to [[Resale price maintenance|sell items at a certain price]]; advertisements regarding sales, therefore, always included the language "Available at participating retailers only". This broad rule was reversed in 1997 by ''[[State Oil Co. v. Khan]]'', which held that such price-setting was not inherently anti-competitive and not a violation of [[antitrust law]].
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''Albrecht'' drew heavy criticism by [[economist]]s, because vertical [[price fixing]], particularly in the newspaper industry, actually increases [[consumer welfare]], which is considered to be a primary goal of antitrust.<ref>{{cite journal |last=Easterbrook |first=Frank H. |authorlink=Frank H. Easterbrook |year=1981 |title=Maximum Price Fixing |journal=[[University of Chicago Law Review]] |volume=48 |issue=4 |pages=886–910 |jstor=1599297 |doi=10.2307/1599297 }}</ref><ref>{{cite journal |last=Blair |first=Roger |last2=Fesmire |first2=James |year=1986 |title=Maximum Price Fixing and the Goals of Antitrust |journal=[[Syracuse Law Review]] |volume=37 |issue=1 |pages=43–77 |doi= }}</ref>
 
== Facts ==
Lester J. Albrecht, an independent newspaper carrier, bought from Herald Publishing Company at wholesale and sold at retail copies of Herald's morning newspaper, the ''[[St. Louis Globe-Democrat]]'', under an exclusive territory arrangement terminable if a carrier exceeded the maximum retail price advertised by Albrecht. When Albrecht exceeded that price, Herald Co. protested to him and then informed Albrecht's subscribers that it would itself deliver the paper at the lower price. Herald Co. engaged an agency (Milne) to solicit petitioner's customers. About 300 of Albrecht's 1200 subscribers switched [[to direct delivery]] by Herald.
 
Herald Co. later turned these customers over, without cost, to another carrier (Kroner), who was aware of Herald's purpose and knew that he might have to return the route if Albrecht discontinued his pricing practice. Herald Co. told Albrecht that he could have his customers back if he adhered to the suggested price. Albrecht filed a treble-damage complaint which, as later amended, charged a combination in restraint of trade in violation of section 1 of the [[Sherman Antitrust Act]], between Herald, Albrecht's customers, Milne, and Kroner. Albrecht's appointment as carrier was terminated and Herald sold his route.
 
== Judgment ==
The Supreme Court held that Albrecht acted unlawfully by requiring retailers to sell newspapers at a particular price.
{{expand section|date=April 2013}}
 
== Economic background ==
A newspaper's profits are determined by its circulation <math>n</math> and the number of advertisements <math>a</math> it sells. Like in every circulation industry, circulation depends upon the price of a copy, as well as the amount of advertising: <math>n = N(P_{n}, a)</math>. Similarly, the demand for advertising space is determined by <math>a = A(P_{a}, n)</math>. In other words: the higher the circulation, the higher the demand for advertising space. The profit-maxizing newspaper monopolist therefore sets his copy price as:
 
<math>P_{n} = \frac{C_{n} - \frac{\part A}{\part n}(P_{a} - \frac{\part C}{\part a})}{1 - \frac{\delta}{\epsilon_{n}}}</math>
 
where <math>C_{n}</math> is the cost per copy, <math>\frac{\part C}{\part a}</math> is the [[marginal cost]] of advertisement, <math>\epsilon_{n} = -\frac{\part N}{\part P_{n}}\frac{P_{n}}{n}</math> is the traditional [[price elasticity of demand]], and <math>\delta = 1 - \frac{\part N}{\part a} \frac{\part A}{\part n}</math> captures the feedback effect of lower copy prices inducing more advertising and vice versa. Most important is the term <math>-\frac{\part A}{\part n}(P_{a} - \frac{\part C}{\part a})</math>, which captures the marginal advertising profit from selling additional advertising due to increased circulation.<ref>{{cite journal |last=Blair |first=Roger D. |last2=Romano |first2=Richard E. |title=Pricing Decisions of the Newspaper Monopolist |journal=[[Southern Economic Journal]] |volume=59 |issue=4 |year=1993 |pages=721–732 |jstor=1059734 }}</ref> The newspaper monopolist's optimal price is therefore ''lower'' than for traditional monopolists in non-circulation industries.
 
== See also ==
*''[[Kiefer-Stewart Co. v. Seagram & Sons, Inc.]]'' (1951)
*''[[Atlantic Richfield Co. v. USA Petroleum Co.]]'' (1990)
 
== References ==
{{reflist}}
 
== Further reading ==
* {{cite journal |last=Blair |first=Roger D. |last2=Kaserman |first2=David L. |year=1981 |title=The ''Albrecht'' Rule and Consumer Welfare: An Economic Analysis |journal=[[University of Florida Law Review]] |volume=33 |issue=4 |pages=461–484 }}
* {{cite journal |last=Blair |first=Roger D. |authorlink= |last2=Lang |first2=Gordon L. |year=1991 |month= |title=''Albrecht'' after ''Arco'': Maximum Resale Price Fixing Moves toward the Rule of Reason |journal=[[Vanderbilt Law Review]] |volume=44 |issue= |pages=1007 |issn=19429886 |url= |accessdate= |quote= }} <small>Cited by the Supreme Court in ''State Oil Co. v. Khan'' (1997).</small>
* {{cite journal |last=Roszkowski |first=Mark E. |authorlink= |coauthors= |year=1991 |month= |title=Vertical Maximum Price Fixing: In Defense of ''Albrecht'' |journal=Loyola University Chicago Law Journal |volume=23 |issue= |pages=209 |issn=00247081 |url= |accessdate= |quote= }}
 
== External links ==
{{wikisource|Albrecht v. Herald Company}}
* [http://supreme.justia.com/us/390/145/case.html Full text opinion from Justia.com]
 
[[Category:United States Supreme Court cases]]
[[Category:United States antitrust case law]]
[[Category:1968 in United States case law]]
[[Category:Overruled United States Supreme Court decisions]]
[[Category:Media in St. Louis, Missouri]]

Latest revision as of 12:34, 21 July 2014

If an existing Word - Press code is found vulnerable, Word - Press will immediately issue an update for that. Offshore expert Word - Press developers high level of interactivity, accessibility, functionality and usability of our website can add custom online to using. SEO Ultimate - I think this plugin deserves more recognition than it's gotten up till now. Keep reading for some great Word - Press ideas you can start using today. The number of options offered here is overwhelming, but once I took the time to begin to review the video training, I was amazed at how easy it was to create a squeeze page and a membership site.

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