Post #288,028
6/28/07 5:02:03 PM
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Supreme Court approves price fixing.
[link|http://biz.yahoo.com/ap/070628/scotus_retail_prices.html?|AP]: Manufacturers will have more leeway to set minimum prices at the retail level without violating antitrust laws under a Supreme Court ruling that could hurt consumers and small merchants.
By allowing minimum price agreements, the court's 5-4 decision on Thursday could lead to higher prices, dissenting justices said. The ruling could also make it harder for new retailers to enter the market, according to consumer advocates, because most innovative retailers begin as lower-cost alternatives. It's another step backwards.
Alex
When fascism comes to America, it'll be wrapped in a flag and carrying a cross. -- Sinclair Lewis
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Post #288,031
6/28/07 5:10:35 PM
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Riddle me this.
Prices on new Apple computers and iPods seem to vary at most about $5. Usually you can know what the retail price will be before you walk in the store. How can this be the case if most retail price fixing has been illegal?
:-(
I agree that the argument by the majority in this decision that this will lead to more competition in pricing seems ludicrous on its face. But the existing law doesn't seem to have been enforced in the [link|http://www.techdirt.com/articles/20061222/122642.shtml|consumer electronics space], in Apple's case anyway.
Cheers, Scott.
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Post #288,034
6/28/07 5:32:41 PM
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Co-sponsored advertising.
"Big ticket" items often have matching advertising dollars coming along with them from the manufacturer, that sets a MSRP value. Generally, there's also not a lot of profit on those items for the retailer - maybe $5 or $10 - which the retailer hopes to make up by the sale of overpriced accessories for the device.
Odoru aho ni miru aho! Onaji aho nara odoranya son son!
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Post #288,042
6/28/07 8:31:19 PM
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No it isn't.
It simply allows manufacturers the ability to set a bit of control over the distribution of their products.
Funny that you would be siding with Walmart and other big box here, who have long created problems by using certain items as loss leaders to drive business to the stores by keeping a ruling that made the manufacturer of those goods powerless to stop them.
Too much of today's music is fashionable crap dressed as artistry.Adrian Belew
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Post #288,054
6/28/07 11:38:25 PM
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Well there is this problem for a retailer...
There are times when the retailer needs to reduce his/her inventory even if there is a loss. For example when a "new" model of a product appears. Is it better to sell a product and take a small loss or tie up funds forever in an increasingly obsolescent product in inventory?
Now, there are ways to mask this with rebates, or tossing in a "free goodie" with the purchase of an item at the "regular price".
Alex
When fascism comes to America, it'll be wrapped in a flag and carrying a cross. -- Sinclair Lewis
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Post #288,059
6/29/07 12:18:52 AM
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For that there are always the vendor hated . . .
. . Gray Marketeers.
Well do I remember the bad old days when vendors tried every trick they could think of to find out who was supplying the grays. Not only did the grays take overstock and "end of life", but a reseller could order more than he could sell to get a price break, then sell off the surplus to the grays.
Hewlett Packard's printer division was the only organization that ever forced me to buy gray market and I have never forgiven them. I am still strongly prejudiced against HP printers and always will be, and that bleeds across to other HP lines.
Back when there were computer shows and vendor shows I never missed a chance to tell HP reps why I would not consider selling their products.
[link|http://www.aaxnet.com|AAx]
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Post #288,063
6/29/07 3:05:15 AM
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Shock news: BeeP with big biz against consumers, film at 11.
(And DON'T try to milk that ridiculous "Walmart and other big box" red herring any more, please. Thank you.)
[link|mailto:MyUserId@MyISP.CountryCode|Christian R. Conrad] (I live in Finland, and my e-mail in-box is at the Saunalahti company.)
Ah, the Germans: Masters of Convoluted Simplification. — [link|http://www.thetruthaboutcars.com/?p=1603|Jehovah]
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Post #288,069
6/29/07 4:54:59 AM
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This is a business to business decision
so you could play your little game no matter what my opinion.
Consumer effect is secondary and impact to the consumer likely to be zero to beneficial, as most mfrs who wanted to establish control of pricing have limited who they use as retail partners. With this, you might actually be able to get your iMac at Walmart.
Impact on prices? Little to none.
Too much of today's music is fashionable crap dressed as artistry.Adrian Belew
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Post #288,077
6/29/07 7:53:52 AM
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It's being reported as lifting a ban on retail price fixing.
E.g. [link|http://www.nytimes.com/2007/06/29/washington/29bizcourt.html?_r=1&oref=slogin|NY Times: Century-Old Ban Lifted on Minimum Retail Pricing]. The 55 page .pdf of the decision is [link|http://www.supremecourtus.gov/opinions/06pdf/06-480.pdf|here]: Given its policy of refusing to sell to retailers that discount its goods below suggested prices, petitioner (Leegin) stopped selling to respon-dent\ufffds (PSKS) store. PSKS filed suit, alleging, inter alia, that Leeginviolated the antitrust laws by entering into vertical agreements withits retailers to set minimum resale prices. [...] In Breyer's dissent he writes (sorry about the formatting): I can find no change in circumstances in the past several decades that helps the majority\ufffds position. In fact, there has been one important change that argues strongly to the contrary. In 1975, Congress repealed the McGuire and Miller-Tydings Acts. See Consumer Goods Pricing Act of 1975, 89 Stat. 801. And it thereby consciously extended Dr. Miles\ufffd per se rule. Indeed, at that time the Department of Justice and the FTC, then urging application ofthe per se rule, discussed virtually every argument pre-sented now to this Court as well as others not here pre-sented. And they explained to Congress why Congresss hould reject them. See Hearings on S. 408, at 176\ufffd177 (statement of Thomas E. Kauper, Assistant Attorney General, Antitrust Division); id., at 170\ufffd172 (testimony of Lewis A. Engman, Chairman of the FTC); Hearings on H. R. 2384, at 113\ufffd114 (testimony of Keith I. Clearwaters, Deputy Assistant Attorney General, Antitrust Division). Congress fully understood, and consequently intended, that the result of its repeal of McGuire and Miller-Tydings would be to make minimum resale price maintenance per se unlawful. See, e.g., S. Rep. No. 94\ufffd466, pp. 1\ufffd3 (1975) (\ufffdWithout [the exemptions authorized by the Miller-Tydings and McGuire Acts,] the agreements they authorize would violate the antitrust laws. . . . [R]epeal of the fair trade laws generally will prohibit manufacturers from enforcing resale prices\ufffd). See also Sylvania, supra, at 51, n. 18 (\ufffdCongress recently has expressed its approval of a per se analysis of vertical price restrictions by repealing those provisions of the Miller-Tydings and McGuire Actsallowing fair-trade pricing at the option of the individual States\ufffd).
Congress did not prohibit this Court from reconsidering the per se rule. But enacting major legislation premised upon the existence of that rule constitutes importantpublic reliance upon that rule. And doing so aware of the relevant arguments constitutes even stronger reliance upon the Court\ufffds keeping the rule, at least in the absence of some significant change in respect to those arguments.
[...]
The only safe predictions to make about today\ufffds decision are that it will likely raise the price of goods at retail and that it will create considerable legal turbulence as lower courts seek to develop workable principles. I do not be-lieve that the majority has shown new or changed condi-tions sufficient to warrant overruling a decision of suchlong standing. All ordinary stare decisis considerations indicate the contrary. For these reasons, with respect, I dissent. FWIW. Cheers, Scott.
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Post #288,085
6/29/07 10:50:21 AM
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What it is
is a rule that forbids a manufacturer from telling a retailer the lowest price it can charge for that manufacturers product.
Where you see this, every day, is with items such as Apple Computers, video games and consoles, etc. Essentially, mfrs who wanted to operate like this and could build the channel had already worked around this rule. It allows specialty operators to do the same within the existing retail infrastructure.
I don't share the same concerns as the minority opinion that this guarantees higher prices. It simply adds one more line item to the negotiations between manufacturer and retailer.
What it does from a legal standpoint is actually put the cases closer to the actual problem by pushing them further down the court structure. I expect that we will probably see an uptick in the number of cases actually brought forward...which may indeed have the exact opposite effect feared by the dissenting opinions.
Too much of today's music is fashionable crap dressed as artistry.Adrian Belew
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Post #288,082
6/29/07 9:25:42 AM
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It is sure to effect consumer prices
Consumer effect is secondary and impact to the consumer likely to be zero to beneficial, as most mfrs who wanted to establish control of pricing have limited who they use as retail partners. With this, you might actually be able to get your iMac at Walmart.
Impact on prices? Little to none. The whole point in this case is to control prices. And you can be sure the manufactures don't want to depress prices. The long term impact may be beneficial to consumers, that is very hard to judge at this point. The short term impact is sure to be higher prices, particularly for no alternative products. CDs and DVDs are sure to rise a bit, among other products. Despite that, it may turn out to be good for consumers in the long run. Price control like this will help small specialty stores over the big box chains. This may increase diversity of products and lead to higher quality. It is still all fairly uncertain though, because it will depend heavily on what happens when this case is kicked back to the lower court. At this point the Supreme Court has only said that not all price floors are illegal. Either this case, or new one, is sure to bring this back to the Supreme Court shortly addressing the question of when price floors are illegal. My fear is that the court may rule in a way that lets manufactures fix prices. Something that, while leaving it illegal in theory, sets the bar so high for retailers that they can never win price fixing cases. Jay
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Post #288,086
6/29/07 10:52:17 AM
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Re: It is sure to effect consumer prices
"CDs and DVDs are sure to rise a bit, among other products."
I don't see this at all. It assumes that Best Buy, Circuit City and Walmart will simply roll over and accept this as an additional term to their agreements. Not likely at all.
Too much of today's music is fashionable crap dressed as artistry.Adrian Belew
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Post #288,087
6/29/07 11:33:37 AM
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Re: It is sure to effect consumer prices
I don't see this at all. It assumes that Best Buy, Circuit City and Walmart will simply roll over and accept this as an additional term to their agreements. Not likely at all. It will take some time, yes. And companies like Walmart that are not dependent on any one product will be in a position to fight longer, and may end up deciding it isn't worth it. But companies like Best Buy and Circuit City that are dependent on CD and DVD sales will have little choice in the end. The producers will start with the small fry, lock them in and then work their way up the chain. And the terms themselves will probably slowly get harder over time. At first they will just set a price floor at 75% of the MSRP, and give them allowances for sales and such. But over time they will limit those options until the price floor and the MSRP are the same and companies have to get the manufactures permission to discount the price at all. Eventually they will have enough of the market locked up they can tell the rest to sign up or stop selling. Jay
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Post #288,089
6/29/07 12:19:10 PM
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I think you overestimate which side has the leverage
Too much of today's music is fashionable crap dressed as artistry.Adrian Belew
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Post #288,043
6/28/07 9:03:50 PM
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kinda like the IBM authorised dealership program back in the
day. Dealership agrees to never sell below 15% of list, I made a lot of money back then. thanx, bill
Quantum materiae materietur marmota monax si marmota monax materiam possit materiari? Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 51 years. meep
reach me at [link|mailto:bill.oxley@cox.net|mailto:bill.oxley@cox.net]
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