Attorney General Thurbert Baker announced today that he has joined a $34 million national settlement with New York shoe manufacturer Nine West Group Inc., resolving allegations of price-fixing. Baker joined fifty-five attorneys general in the settlement filed today in U.S. District Court in New York immediately following the filing of a lawsuit against Nine West Group in the same court. The settlement resolves the lawsuit, but allows the court to retain jurisdiction in overseeing the terms of the settlement agreement. When I believe that a companys practices have hurt Georgias consumers, I will seek to put a stop to those practices and, where appropriate, obtain a monetary recovery, Baker said. The states alleged that Nine West Group entered into illegal agreements with shoe retailers to fix the retail price of womens shoes between January 1988 and July 1999. Nine West Group of White Plains, NY, was purchased by Jones Apparel Group Inc., in June of 1999. Working with the Federal Trade Commission, the attorneys general uncovered evidence that various Nine West divisions, including Easy Spirit, Enzo Angiolini, and Nine West, had engaged in illegal vertical resale price maintenance, by prohibiting retailers from discounting certain shoes. Price-fixing is illegal under both federal and state antitrust laws. The lawsuit claimed that Nine Wests illegal price-fixing included occasions when the manufacturer distributed lists of shoes that could not be discounted by retailers outside of time periods dictated by Nine West. Nine West explained to many of its retailers that the purpose of the pricing policies was to protect them from competition. In order to enforce these illegal pricing policies, Nine West allegedly granted discounts to cooperating retailers and withheld discounts or threatened to cancel or refuse to take orders from companies that did not comply. As a result of the alleged illegal pricing agreements, state and federal authorities allege that consumers were denied an open and competitive market for certain Nine West shoes, and therefore paid higher prices for these shoes. Under the terms of the settlement, Nine West Group has agreed:
- To refrain from agreements or business practices during the next five years that are designed to influence or control the price at which retailers chose to sell Nine West products to consumers;
- To notify each of its dealers and retailers that it is their right to independently determine the price at which they wish to advertise and sell Nine West products;
- To pay $34 million into a settlement fund. Of this amount, no more than $3.5 million will be used to reimburse the states for attorneys fees, investigative costs, and publication and notice costs. $30.5 million will be divided among the 56 states and territories participating in the agreement according to population.
Under the terms of the settlement, the states must use their respective shares of the settlement to fund women's health, educational, vocational, and safety programs. The distribution formula should bring Georgia over $800,000. Under the terms of the agreement, which must be approved by the Court, Nine West Group did not admit any liability or wrongdoing.