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LRB−0924/1CTS:bjk:ph
2009 − 2010 LEGISLATURE
2009 BILL
A
N
A
CT
 
 to repeal 
20.115 (1) (r), 100.26 (9), 100.30 and 100.33 (1) (g);
 to amend 
100.18 (8), 100.201 (2) (h) 5., 100.264 (2) (intro.), 100.33 (1) (c), 100.33 (1) (h),133.03 (1), 133.03 (2), 133.03 (3), 133.04 (2), 133.04 (3), 133.05 (3), 133.05 (4),134.04 (1), 139.39 (3), 165.065, 814.04 (intro.) and 951.10 (2); and
 to create
100.301, 100.33 (1) (eg), 100.33 (1) (er) and 100.33 (1) (i) of the statutes;
relating to:
the minimum price of merchandise sold at wholesale or retail, theminimum duration of posted prices for motor vehicle fuel, prohibitinganticompetitive pricing and pricing that injures competition, grantingrule−making authority, and providing penalties.
 Analysis by the Legislative Reference Bureau
Under current law, the Unfair Sales Act or “minimum markup” law prohibits“loss leaders,” or wholesale and retail sales of merchandise at a price below the costof the merchandise to the seller. With respect to motor vehicle fuel, tobacco products,and alcoholic beverages, the current formulas for calculating cost add minimummarkups from 3 to 9.18 percent to cover a portion of the seller’s cost of doing business.This bill repeals the Unfair Sales Act and creates prohibitions against certainpricing practices by wholesale and retail sellers of goods. First, the bill prohibits123456789
 
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LRB−0924/1CTS:bjk:ph
BILL
anticompetitive pricing, which occurs when a seller sets a price lower than anappropriate measure of the seller’s cost and has a dangerous probability of recoupingthe seller’s investment in below−cost pricing. Anticompetitive pricing, as defined inthe bill, also violates a current provision that prohibits contracts, combinations, orconspiracies in restraint of trade or commerce.
See Conley Publishing Group v. Journal Communications, Inc.
, 2002 WI 121 (2002),
overruled in part on other grounds
,
Olstad v. Microsoft Corp.
, 2005 WI 121 (2005). Second, the bill prohibitspricing that injures competition, which occurs when a seller sets a price lower thanan appropriate measure of the seller’s cost and the price is likely to cause a direct,substantial, and reasonably foreseeable injury to consumers. A seller’s pricing doesnot violate either prohibition unless all of the following apply: 1) the pricing causes,or is likely to cause, substantial injury to consumers; 2) the injury is not reasonablyavoidable by consumers; and 3) the injury is not outweighed by countervailingbenefits to consumers or competition.Under the bill, the prohibitions are enforced concurrently and independentlyby the Department of Agriculture, Trade and Consumer Protection (DATCP), theDepartment of Justice (DOJ), and district attorneys as follows. If DATCP has reasonto believe a seller has engaged in pricing that injures competition, DATCP may, aftera hearing, issue an order requiring the seller to cease the violation. The order mayrequire the violator to pay a forfeiture not more than $500 for a first violation or$2,500 for subsequent violations. An order issued by the department is reviewableby a court under procedures available under current law.If DOJ has reason to believe a seller has engaged in pricing that injurescompetition, DOJ may bring an action seeking a court order requiring the seller tocease the violation. The court may require the violator to pay a forfeiture not morethan $500 for a first violation or $2,500 for subsequent violations. If DOJ or a districtattorney has reason to believe a seller has engaged in anticompetitive pricing, DOJor the district attorney may commence an action against the seller under the currentprovision prohibiting contracts, combinations, or conspiracies in restraint of tradeor commerce. In lieu of initiating an enforcement action, DOJ, DATCP, or a districtattorney may accept an agreement by a seller to stop a pricing practice. Such anagreement may provide for payment by the seller of a reasonable forfeiture. If aseller violates the agreement, the seller may be required to pay a forfeiture up to$25,000.DATCP is authorized to promulgate rules administering or interpreting theprohibitions created by the bill. In doing so, DATCP must ensure that the rules areconsistent with federal laws and regulations concerning anticompetitive pricing,request commentary on proposed rules from the federal trade commission, andconsult and cooperate actively with DOJ.Under current law, a posted retail price for motor vehicle fuel must remain ineffect for at least twenty−four hours. This bill repeals the requirement.Current law generally prohibits contracts or conspiracies in restraint of trade,monopolization of trade, price discrimination, and secret rebates. This bill increasesfrom $100,000 to $1,000,000 the maximum amount of a fine or forfeiture that maybe imposed upon a corporation that violates the prohibitions against contracts or
 
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BILL
conspiracies in restraint of trade or monopolization of trade and increases from$50,000 to $250,000 the maximum amount of a fine or forfeiture that may be imposedupon any other person that violates those prohibitions. The bill increases from$25,000 to $50,000 the maximum amount of a fine or forfeiture that may be imposedupon a person who violates the prohibitions against price discrimination or secretrebates.For further information see the
 state
fiscal estimate, which will be printed asan appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, doenact as follows:
S
ECTION
1.
20.115 (1) (r) of the statutes is repealed.
S
ECTION
2.
100.18 (8) of the statutes is amended to read:100.18
(8)
Every wholesaler and every other person selling or distributingmotor fuel in this state shall keep posted in a conspicuous place, most accessible tothe public at his or her place of business, and on every pump from which delivery ismade directly into the fuel tank attached to a motor vehicle, a placard showing thenet selling price per gallon of all grades of motor fuel and the amount of all taxes pergallon thereon. On pumps or other dispensing equipment from which motor fuel issold and delivered directly into fuel supply tanks attached to motor vehicles, suchposting shall be in figures not less than one inch high, except that no such placardshall be required on a computer pump whereon the total net selling price per gallonincluding all taxes is legibly shown on its face. Except for sales to drivers of motorvehicles used by physically disabled persons under s. 100.51 (5), all sales shall bemade at the posted price. Delivery slips shall also show the net selling price pergallon of all grades of motor fuel and the amount of all taxes per gallon thereon. If the wholesaler or person has more than one place of business in this state, thewholesaler or person shall post that placard at all of his or her places of business.All prices posted shall remain in effect for at least 24 hours after they are posted.123456789101112131415161718
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