(CN) – Wisconsin can once again enforce a minimum markup on gas prices after the 7th Circuit dissolved an order barring the markups, citing a lack of evidence that they violate federal antitrust regulations.
Flying J, a Utah-based gas supplier, challenged the Wisconsin Unfair Sales Act, which requires in-state gas dealers to mark up prices by at least 6 percent. The markup allows competitors to meet, but not beat, others’ prices.
Flying J said the law stifled competition by blocking it from selling gas in Wisconsin for less than the statutory requirement.
The Federal Trade Commission and the Wisconsin Policy Research Institute have both concluded that the law prevents competitive price-cutting and encourages price collusion at the expense of Wisconsin consumers.
A federal judge, however, found that the state law was pre-empted by the federal Sherman Act and issued a permanent injunction against its enforcement.
But without tangible evidence of price collusion, the 7th Circuit dissolved the injunction, saying the state law “neither requires nor authorizes gasoline dealers to get together and agree on what price they will all charge for gasoline.”
Circuit Judge Michael Kanne noted that the decision “does not preclude a future plaintiff, properly armed with evidence of actual collusion among Wisconsin gasoline dealers, from bringing an as-applied challenge to the Act.”
From 2003 to 2008, all 1,541 alleged violations of the state law went unprosecuted.