Most founders treat product pricing as a marketing exercise: pick a number that customers will pay and that covers your costs. That instinct is right about the business, and dangerously incomplete about the law. How you set, present, and change prices can trigger antitrust exposure, consumer-protection claims, and federal enforcement, all from a decision that looked like pure strategy on a spreadsheet.
This article walks through the legal rules that quietly govern pricing, from the one conversation that can end a company to the fine print of how you advertise a discount, so you can build a pricing approach that holds up.
What You’ll Learn
Pricing Is a Legal Decision, Not Just a Number
A price is a promise wrapped in a claim. It promises what a customer pays, and it implies claims about value, comparison, and terms. Each of those layers is regulated. Antitrust law governs how prices get set relative to competitors, consumer-protection law governs how prices are presented, and a growing body of federal rules governs the fees and renewals bundled around the headline number.
The through-line is that pricing choices leave a paper trail, in emails, ad copy, and checkout screens, that regulators and plaintiffs can read later. Treating pricing as a legal strategy up front is far cheaper than defending it after the fact.
Antitrust: The One Conversation That Can End You
The single most dangerous pricing mistake is agreeing on price with a competitor. Horizontal price fixing, coordinating prices, discounts, or terms with rivals, is treated as per se illegal under Section 1 of the Sherman Act, meaning no business justification saves it. The statutory text at Cornell Law is short, but the exposure includes criminal liability and treble damages.
This is not limited to smoky-room cartels. Loose talk at a trade show, a shared spreadsheet, or even signaling future prices publicly can create risk. Vertical pricing, like a manufacturer setting resale terms with a distributor, is judged under the more forgiving rule of reason, and unilateral minimum-advertised-price policies are generally permissible. But the rule is simple and absolute: do not discuss your prices with your competitors.
Price Discrimination and the Robinson-Patman Revival
Charging different customers different prices is usually fine, and often smart, but there is a specific exception. The Robinson-Patman Act restricts sellers from charging competing buyers different prices for the same commodities where the effect may harm competition. For years it was rarely enforced; recently the Federal Trade Commission has signaled renewed interest, so it deserves fresh attention.
For most software and services companies, Robinson-Patman is not a daily concern, but wholesalers, distributors, and product manufacturers should map their pricing tiers against it. If you are pricing across an acquisition or integrating two price books, treat it as a diligence item; our note on how due diligence reprices the deal explains why pricing exposure surfaces at the worst moment in a transaction.
Deceptive Pricing and Junk Fees
How you present a price is regulated as tightly as the price itself. Fake reference prices, the perpetual “was $199, now $99” that was never really $199, are classic deceptive pricing and draw FTC and state scrutiny. Comparative and discount claims need to be truthful and substantiated.
The rules tightened in 2025. The FTC’s Rule on Unfair or Deceptive Fees took effect on May 12, 2025, targeting hidden “junk fees” in live-event ticketing and short-term lodging by requiring the total price, including mandatory fees, to be shown up front. Even outside those industries, drip pricing that hides mandatory charges until checkout is a well-worn path to a deceptive-practices claim. Pair honest pricing with honest product claims; the same discipline behind clear product and service warranties applies to how you advertise a deal.
Subscription and Auto-Renewal Pricing
Recurring pricing carries its own rules. The FTC tried to impose a nationwide “click-to-cancel” standard through its Negative Option Rule, but the Eighth Circuit vacated that rule on July 8, 2025, on procedural grounds, days before it would have taken effect. That does not make auto-renewal a free-for-all.
Federal authority under the Restore Online Shoppers’ Confidence Act and a patchwork of state automatic-renewal laws still require clear disclosure of renewal terms, informed consent, and an easy way to cancel. The FTC and state attorneys general continue to enforce against deceptive subscription practices. If your software or vendor contracts bundle auto-renewing fees, disclose them plainly and make cancellation genuinely simple. Regulated operators, including the cannabis retailers advised by Collateral Base, face added state-level pricing and advertising rules on top of the federal baseline.
Building a Product Pricing Strategy That Holds Up
A defensible product pricing strategy treats legal review as part of the design, not a cleanup step. A few habits go a long way.
- Wall off competitors: Never discuss prices, discounts, or terms with rivals, and train your team on that line.
- Substantiate every claim: If you advertise a discount or comparison, keep records proving the reference price was real.
- Show the total price: Disclose mandatory fees up front rather than at checkout.
- Make cancellation easy: For subscriptions, honest renewal terms and simple cancellation are both law and good business.
- Document the rationale: Keep a clean record of why prices are set as they are, which also matters in a sale.
Small companies sometimes assume these rules are for the giants. They are not; the same discipline that keeps small-business M&A clean keeps pricing defensible. When a pricing practice draws a demand letter or an investigation, that is litigation territory for our colleagues at Howard Law Group, and the same is true of the website accessibility demand letters that increasingly target checkout flows.
Frequently Asked Questions
Is it illegal to charge different customers different prices?
Usually no. Differentiated pricing is common and lawful. The main exception is the Robinson-Patman Act, which can restrict charging competing buyers different prices for the same commodities where competition may be harmed.
Did the FTC click-to-cancel rule take effect?
No. The Eighth Circuit vacated the FTC’s Negative Option, or click-to-cancel, rule on July 8, 2025. However, federal law under ROSCA and many state automatic-renewal laws still require clear disclosure and easy cancellation.
What is the biggest pricing legal risk for a small business?
Coordinating prices with competitors. Horizontal price fixing is treated as per se illegal under the Sherman Act and carries criminal and treble-damage exposure, regardless of company size or intent.
Next Steps
Pricing sits at the intersection of strategy and law. Set your number for the market, but present it, tier it, and renew it within the rules, and keep the records that prove you did. That combination protects margin and keeps regulators out of your checkout flow.
Rolling out new pricing or a subscription model? Contact Howard East to review your pricing and disclosures before launch.
This article is general information, not legal advice. No attorney-client relationship is created by reading it. Attorney Advertising.
