A fair trade law was a statute in any of various states of the United States that permitted manufacturers the right to specify the minimum retail price of a commodity, a practice known as "price maintenance". Such laws first appeared in 1931 during the Great Depression in the state of California.
Why were fair trade laws enacted in the 1930s?
Fair trade laws were enacted by states in the 1930s to allow manufacturers to set prices for their products by retailers. The laws were enacted by almost every state to counteract the constant price fluctuations brought on by the Great Depression.
When did fair trade become illegal?
The practice gradually was eliminated by states as international trade increased which limited enforceability of fair trade laws, and in 1975 Congress enacted legislation that made fair trade laws illegal under the Sherman Antitrust Act . [Last updated in June of 2021 by the Wex Definitions Team ]
