Plaintiff States alleged that between 1990 and 1994, Reebok and Rockport conspired with certain dealers to maintain the minimum
resale price for which retailers were permitted to sell Defendants? footwear. Consequences for non-compliance with Reebok?s pricing policies by retailers included threats to cancel orders and in some instances, cancelling the retailers?
authorization to sell Reebok footwear. The objective of these tactics was to coerce
compliance. In response, many of the dealers complied with Reebok and Rockport?s pricing policy, thus establishing the conspiracy. The Plaintiff States asserted that such policies artificially maintained higher minimum resale prices, restrained the market and eliminated free competition between various retailers. Thus, consumers were forced to pay higher prices for certain Reebok and Rockport footwear than if free market forces were controlling competition. As a result of the allegations, the parties entered a settlement agreement by which Reebok and Rockport were enjoined from entering any agreements to fix prices and were ordered to disclose to all dealers that they were free to determine the prices at
which they could advertise and sell Defendants products. Reebok and Rockport
were also ordered to pay to the States the total sum of $9.5 million. Of the total settlement, $8 million of the settlement sum was distributed cy pres to the Plaintiff
States for women?s programs. The remaining $1.5 million reimbursed the state?s investigative costs and attorneys fees.
The Federal Trade Commission also participated in the investigation.