Ban On Price Floors Abandoned, Internet Prices May Rise

paro12 and i_like_spam informed us of a 5-4 decision by the US Supreme Court which abandons a 96-year-old ban on manufacturers and retailers setting price floors for products. The Slashdot community discussed the issue when the case was argued back in March. The ruling means that anti-competitive complaints based on price-fixing will have to be argued case-by-case and will be harder to prove. Discounts and discounters in all venues may be under pressure, with internet sales possibly the hardest hit. "Importantly, this case points a dagger at the heart of the most consumer-friendly aspects of the Internet. The Internet has shifted power to the consumer in two ways. First, it allows consumers to search for and gather information in a cost-effective, efficient manner. Second, it provides a low-cost means of retailing, making it easy for discounters to offer products to the public. This combination squeezes excess profits and inefficiencies out of product prices. Retail price maintenance seeks to short circuit this extremely consumer friendly process. By setting minimum prices, manufacturers can build in excess margins for themselves and for their favored retailers -- prices that consumers have no choice but to pay."

Let me guess...

a 5-4 decision by the US Supreme Court

Do we need to be told who voted each way?

Re:

Nope. The supreme court now splits nicely down party lines for every vote.

I wonder how many 5-4 votes have gone through in the last six months, with votes falling the same way every time.

Americans: I feel sorry for you.

Re:Let me guess...

Nope. The supreme court now splits nicely down party lines for every vote.

Yep, isn't it great that the one branch of government that should be completely apolitical has just become yet another neoconservative-controlled institution?

Re:Let me guess...

Yep, isn't it great that the one branch of government that should be completely apolitical has just become yet another neoconservative-controlled institution?

Good thing we got rid of all those "activist" judges who thought their job was to rewrite the law!

Oh, wait...

I guess judges are only "activist" - and that activism is only a bad thing - if they're liberals.

Kinda like being a conservative means you don't believe in big government... except for the military, the CIA, the DHS, the Justice Department (which has been converted into an agency for enforcing a political agenda), the FCC... it's only big government that helps people that's bad. Just like laws that help people are bad; they're perfectly okay to overturn. Overturning a law intended to help people apparently doesn't make a judge "activist", it makes him a "constructionist". Free market price competition? Who needs it? Let big business set the minimum price retailers are allowed to charge. Screw consumers.

I guess I should be glad that our Constitution was apparently written with the interests of global conglomerates first. After all, if a constructionist judge writes a ruling that says so, then it must be true. They can't possibly be following their own political agenda.

Re:Let me guess...

Marbury v. Madison. The Chief Justice was a Federalist who served a few days under a Federalist president and basically up until 1850 or so under non-Federalists.

Re:Let me guess...

Maybe those Nader voters had principles?

Maybe instead of directing anger towards the few voters that actually exercised free will, you should instead point it towards (a) the sheep that stick to party lines, and (b) the fucked up voting process that forces you to vote for 'who you think can actually win' rather than who you actually want to represent you.

Re:Let me guess...

You know, you can live in a fantasy world or you can make the most of a situation. Some people live in a world where they can understand that sometimes you have to make a choice that isn't perfect.

Talk about a fantasy world. That's the one where we 3rd party voters only need to make the imperfect choice "sometimes." Give me a break. I make this imperfect choice every election. Yes, it pisses me off. But what happens if 3rd party voters vote instead for one of the big two parties? Nothing. The two big parties are equally corrupt, just in different ways.

And it sure doesn't make sense to convince otherwise reasonable voters that Gore and Bush were fungible.

Hindsight is 20/20, the grass is greener on the other side, and you can't predict the future of America if Al Gore had won. Perhaps instead of dumping our money into the war, we'd be dumping it on further social security and medicare waste, and imposing draconian environmental laws to curb greenhouse gases, economy be damned. You know, people die due to bad economies as well as wars.

In my view, the big parties are one giant party designed to increase their power and decrease ours. One side wants to limit what you. The other side wants to limit what you can do with the money you earn. Both increase taxes and spending and the size of government. Both parties want to infantilize the citizens so that they rely on bigger and bigger government -- which provides them with more power.

So yes, I do blame Nader as a spoiler, and the nuckleheads who helped him along.

You can continue to blame them all you want. I'll continue to vote my conscience. That means I'll be voting for Ron Paul. If he doesn't win, I don't care who wins.

Re:Let me guess...

Next thing, they'll be backing Cheney's notions he's not part of the executive branch.

Yep - and the use of executive privilege to ignore congressional subpoenas - and the evisceration of the Presidential Records Act...

We have a Court that's willing to let public schools strong-arm students into the confines of politically correct speech at an off-campus event.

We have a Supreme Court that believes that no one has standing to challenge the White House's massive donations of funds to religious organizations - that such spending is "discretionary." (That's funny; they neglected to teach me in law school that the Establishment Clause is optional.)

We have a chief justice expressing the opinion that the CIA is absolutely above the law, because a jury won't convict anyone of wrongdoing as long as they flash their nifty "War on Terror" badges.

Folks, what we have is an extremely deferential Court that's willing to give authority a pass for any old excuse: national security, executive privilege, whatever. We have five justices who see no problem in letting government do whatever the hell it wants. And so, we have the greenlight for fascist America.

Thanks, justices. You've wholly failed to uphold the Constitution, protect the American public, and preserve any teeth for the judicial branch of the federal government. You can go ahead and turn in your "jurisprudence" badges any time now.

- David Stein

Re:Let me guess...

Americans: I feel sorry for you.

We'll live. The U.S. Supreme Court has done a lot of good, especially in reigning in the worst excesses of the legislature, and one result of an independent judiciary is sometimes they're going to do things you don't like.

I feel sorrier for the people in those countries where the courts simply apply the law, and are never allowed to challenge it.

Re:Let me guess...

I'm trying to figure out if anyone posting (or the summary writer) actually read the decision?

To summarize:

Prior to this decision, any price floor set by a manufactorer was automatically considered a violation of anti-trust laws designed to increase competition.

Apparently there are some specific situations where a price floor would lead to more competition, not less. The specific cases in question included some of those situations. The argument was that since they led to more competition, not less competition, they didn't violate the relevent anti-trust laws.

Therefore the court took another look and said "You're right, there are some specific situations where a price floor wouldn't violate the law against being anti-competitive, since in those situations it actually leads to more competition". As a result, you may now set a price floor and not have the Feds come after you as long as you are able to show a federal judge that your price floor actually leads to more competition, not less.

If your price floor leads to less competition, then you still can do it as it's still a violations of the relevent anti-trust laws designed to encourage more competition.

So, having read that summary, why the hell does anyone think there is anything wrong with that decision? True, now people who can justify their price floor on more competition grounds might have to defend that in court, but how is that worse than those same people being not able to encourage competition that way in the first place?

For specifics on exactly how a price floor may in rare cases lead to more competition, please read the actual court briefs and decision.

Re:Let me guess...

So, having read that summary, why the hell does anyone think there is anything wrong with that decision?

Because the rule will prompt businesses of all kinds to set up price floors, that's why.

By creating a "balancing test," the Court has changed the operative rule from "don't set price floors under any circumstances" to "you can go ahead and set price floors, so long as you can create a facade of competitiveness in case the DOJ brings an antitrust violation against you."

The sad reality is that the DOJ's antitrust division is toothless. It does nothing. Its last victory was in 1982, against the Ma Bell cartel. It has fought one significant case since then, against Microsoft, and it got whipped. Even clear-cut, admitted perpetrators of antitrust activities get off with a slap on the wrist (Samsung was caught red-handed in DRAM price fixing, and was fined $90MM... even though its annual *profits* are $3,000MM.)

So what has this rule done? It's shifted business from a "we can't, we'll get slapped" stance to a "we're gonna go ahead and do it - prove us wrong, we dare ya!" stance. Prepare to see every good in America sold at the same price through all outlets. This sucks.

- David Stein

Re:Let me guess...

"Nope. The supreme court now splits nicely down party lines for every vote." Firstly the supreme court is a-political but if you must know seven of the nine judges on the court now were apointed by Republicans. Sandra O'Conner was appointed by Regan and I doubt youd would have considered her a political hack for the right. "I wonder how many 5-4 votes have gone through in the last six months, with votes falling the same way every time." Probably about the same percentage as any other year you only hear about the 5-4's because, well, usually those are the news worthy cases. http://docket.medill.northwestern.edu/archives/003 771.php [northwestern.edu] Shows most decisions in 2006/07 were either unaninous or extremely one sided but its not news worthy unless about 40% of the population disagrees with it. "Americans: I feel sorry for you." Dont, despite what you might think many of us are not hopelessly despondent and unhappy with our nation. Sure we have a very unpopular president but hell be out of office in a bit over a 18 months (if not sooner). Nothing is as tacky as someone from another nation saying who they 'feel sorry' for someone else because the culture there is different and the government reflects that. I Dont feel sorry for some European nations (Im not even going to name them) despite the fact people die waiting to see a doctor there its their health care system and for whatever reason they like what they got.

Re:Let me guess...

I Dont feel sorry for some European nations (Im not even going to name them) despite the fact people die waiting to see a doctor there its their health care system and for whatever reason they like what they got.

You do realize that the US ranks 45th in the world [cia.gov] in terms of life expectancy, right below Saint Helena and right above Cyprus, right? The average life expectancy in Cuba, an impoverished nation which is under an embargo that covers much medical technology is only one year less than that in the US, the wealthiest nation on the planet. Meanwhile, we spend twice as much as anyone else [typepad.com] for this worse care. Check out all of the cited studies linked from that page, too.

Re:Let me guess...

There are a couple of things wrong with your statement.

First, medical care isn't the only thing that affects life expectancy, nor are they directly proportional. The culture in the U.S. and the average person's diet and exercise regimen may have as much or more to do with how long they live than the quality of medical care.

Second, we live in a competitive country and world. Paying twice as much as other countries for medical care doesn't surprise me in the least, since we typically pay more than that for just about everything else. Do you think people in Cuba all buy $200,000 houses? I don't think so. Yet that's common here.

In fact, normalized to the cost of living in any place, twice as much doesn't sound bad at all.

Re:Let me guess...

Second, we live in a competitive country and world. Paying twice as much as other countries for medical care doesn't surprise me in the least, since we typically pay more than that for just about everything else.

Competition reduces prices. What we have here is a case of market manipulation by insurance companies and pharmaceutical companies (among others) which drives up prices and in fact reduces the quality of care because it limits available treatments (insurance companies decide by fiat what they will or won't cover, and most Americans who do have health care get it from their employer and can't afford their own insurance.)

I can actually get dental work done in Mexico, with a reputable dentist who people I know have patronized, for less than the cost of my fucking co-pay here in the states. That includes my round trip flight (sacramento to san diego), and all the week's expenses including booze, transportation, and lodging. And I'm talking about minor work here.

If I get my major work done, I can probably squeeze a month's vacation in Thailand out of the deal (getting the work done there) and still come in under my co-pay. I have two impacted wisdom teeth and they are very large. And that price will include at least an hour of massage every day :P

The health care system is broken here in the US, plain and simple. It has been broken in the name of profits, due to illegal business practices (price fixing, but not this kind of price fixing) engaged in by health care providers, insurance companies, and pharmaceutical companies (the latter being one of the most morally bankrupt industries in existence, probably second only to the military-industrial complex.)

You can tell yourself any lies about it you want, but the fact is that the quality and availability of health care in the US have gone down while prices have gone up.

Re:Let me guess...

First, medical care isn't the only thing that affects life expectancy, nor are they directly proportional. The culture in the U.S. and the average person's diet and exercise regimen may have as much or more to do with how long they live than the quality of medical care.

Read the links on the page that I provided; it goes into treatment of specific diseases and looks at how they fare in the US versus other countries.

Second, we live i.a competitive country and world.

Competition lowers prices.

Paying twice as much as other countries for medical care doesn't surprise me in the least, since we typically pay more than that for just about everything else. Do you think people in Cuba all buy $200,000 houses? I don't think so. Yet that's common here.

Have you priced living expenses in Europe lately? Europe, east Asia, and Canada are the nations we're comparing to, so let's look at the world's most expensive cities [finfacts.ie]. London is number two (after Moscow). Copenhagen 6th, Geneva 7th, Zurich 9th, Oslo 10th, Milan 11th, and so on. Seoul is #3, Tokyo #4, and Hong Kong #5. The most expensive city in North America is NYC, and it's only #15. LA, our only other in the top 50, is #42.

American *salaries* are higher than European salaries (although that's changing), but as far as expenses go, Europe is more expensive. The simple fact of the matter is that our healthcare system is overpriced and under-effective, and there are countless studies out there on the subject. Start reading them.

What we need is a system like France's (yes, I know France is a dirty word, but hey ...). Canada's is too hostile to supplimental insurance. Britain's is too minimal on its basic coverage. Germany's is too convoluted and inefficient. I think France got it pretty close to just right. They're a little too lenient on allowing unneccessary visits, but that's a mistake we could avoid here, and is relatively minor in the scheme of things. And despite the cost of living in France, and the fact that France isn't exactly famed for healthy food, their healthcare costs are less than half of ours and their life expectancy longer.

Re:Let me guess...

Another myth. Malpractice suits account for 0.46% of our total healthcare expenditures [healthaffairs.org]. An interesting observation is that Canada, for example, actually pays out more [medicalnewstoday.com] to plaintiffs than US courts do.

Re:Let me guess...

You do realize that there are many studies that show there is no link between life expectancy and health spending, right?

Awesome! Currently health care is 15% of US GDP, let's cut it to 0% and spend the money on a beer bash.

Re:Let me guess...

As with all of the recent 5-4 splits, Justice Kennedy was the swing vote.

Justice Breyer wrote the dissent [supremecourtus.gov]. Here's a piece:

That change, other things being equal, may enable (and motivate) more retailers, accounting for a greater percentage of total retail sales volume, to seek resale price maintenance, thereby making it more difficult for price-cutting competitors (perhaps internet retailers) to obtain market share.

They forgot the internet is GLOBAL

This simply reeks of protectionism for big US manufacturers...

But as any economist will tell you price fixing generally doesn't work well for the economy or consumers as a whole. It may temporarily benefit one industry or sector but is generally undesirable. It is better to let uncompetitive companies face the pressure of competition and either become competitive or go out of business.

If people have a finite amount of money to spend and prices are higher they simply buy less.
They may buy less of different products, for example if the price of gas goes up and people still need to buy the same amount gas, but may not go on vacation or buy a new TV (this is why the price of oil is so important).

Basic concepts of supply and demand (http://en.wikipedia.org/wiki/Supply_and_demand [wikipedia.org])
  drive pricing. Price elasticity (http://en.wikipedia.org/wiki/Supply_and_demand#El asticity [wikipedia.org]) will determine what happens as prices rise. In fact artificially high prices may cause additional suppliers to enter the market to compete (an increase in supply) which will cause a surplus of the product which in turn will lead to lower prices as manufactures try to entice consumers to buy. Ultimately unless you impose tariffs or other trade barriers, or all manufacturers collude (and fix prices) the market will solve the problem.

Tariffs and other trade barriers are coming down with globalization, and price fixing involving collusion is highly unlikely between a competitive manufacturer, and an uncompetitive one. The competitive (ie lower cost) manufacture is better off selling at a lower price and taking the business for themselves and putting their competition out of business.

Besides the internet puts global manufacturers within reach of US customers. If prices go up in retail stores in the US because of all US manufacturers setting bottom prices, people will simply buy from outside of the US, and a huge gray import market will open up. At least for high value items, where the difference in price is significant.

If anything this is just one more nail in the coffin of US manufacturing. The legal changes may give them a temporary false sense of security, but realistically companies that fail to please the market (ie consumer) by providing good value simply don't last.

Just think what artificially high CD prices have caused people to do. They've found their music online (legal or otherwise).

Or think region codes and DVDs. Many Europeans buy their DVDs online from the US because they don't want to wait for the European release.

This is no different. Shipping costs are not that high (especially not for large volume gray market imports).

Re:An Original Idea!

Sorry. Doesn't work that way in the real world. Those cheap t-shirts they sell at Wal-Mart are often not the same ones you buy in another store, for one thing. Thus, this ruling has little impact on their products. In addition to often carrying products by different manufacturers, they also quite frequently get special sourcing of custom, cost-reduced versions of products (particularly in electronics). Such products won't be affected in any way.

Even ignoring that, though, the Wal-Mart chains of the world, however, who have huge buying power, will still be able to do what they do now: say "You don't like it, fine. We're not carrying your product." Most manufacturers can't cope with the sudden drop of revenue when this occurs, and basically keel over and die. Thus, Wal-Mart is pretty much insulated from strong-arm tactics by nearly all manufacturers.

The people this will hurt most, contrary to the opinion of five SCOTUS justices, are the mom and pop shops. Now, the manufacturers will be able to tell those stores that they have to meet a minimum price while other manufacturers of similar products are still caving to Wal-Mart's price demands. The result will be that the disparity between Wal-Mart prices and prices at smaller stores will increase, driving those smaller stores even more quickly out of business.

There is simply no way to not see this as a serious blow to consumers.

Re:An Original Idea!

Good point. I hate to sound like the eternal optimist here, but I think this is the kind of thing that the market will sort out. Companies who refuse to allow their products to be sold at a reduced price will find that stores and internet retailers are less likely to stock their products, in favor of products that do not have such limitations. Consumers hold little loyalty to brands anymore, so I don't think consumers will really care all that much. And of course, manufacturers of imported goods will see this as an opportunity. And they'll be right.

Please explain.

Why is this tagged slownewsday? Is this not something that will in theory affect all internet shoppers?

Re:

For the same reason this comment will be modded flame bait. The immature mind gets more satisfaction out of destruction than construction.

Okay, mods, don't let me down.

Re:Please explain.

It's hardly the case this is a new development.

The way equipment vendors of all kinds have gotten around the previously illegal activity was to set up "Authorized Dealer" agreements. Most corporations at the top of their respective food chains use them. Authorized dealers have pricing sent to them. Pricing includes regular, msrp, and promotional pricing. Big retailers normally do deals above and beyond those offered by the brand in question thereby crushing the small retailer.

Look at Apple as an example. Every retailer's price is about the same except for the unauthorized dealer that got some units somehow.

Just because the Supreme Court handed down a decision some people don't like doesn't mean it's unchanging. That's what the legislature is for. That's what your democratically elected officials are for.

Oh wait, most Americans don't vote so, they got exactly what they put in. If you are that angry, get involved.

Re:Please explain.

Oh wait, most Americans don't vote so, they got exactly what they put in. If you are that angry, get involved.

That is blatant nonsense. First, Americans can't vote on federal legislation. Second, Americans can't vote on supreme court members. Third, Americans can't control the political parties. Fourth, no person not a member of the two political parties and compliant with the two parties agenda can obtain power in congress. Fifth, almost no elected official even tries to do what they say they are going to do after they are elected (and they can't succeed unless that goal is in line with the goal of the two parties, anyway.) Sixth, the vast majority of power, specifically meaning control of legislation, in Washington is wielded by corporate and money-rich groups with specific interests that have nothing to do with the needs and wants of the average citizen.

"Voting" in the federal political process is no more than a sop to keep the citizens somewhat quiet and bewildered, part of a larger process involving propaganda), disenfranchisement, federal power grabs and more. It works, too; your post is a good example of someone who is under the completely mistaken impression that voting at the citizen level makes any difference at all at the federal level.

The largest voting swing seen in many years just put Democrats in power with the specific intent of getting us out of Iraq; are we out of Iraq? No. Has the funding for Iraq been altered? No. Have any deadlines been set? No. Has anything outside of a bunch of rhetoric been accomplished? No. Well, wait - some things got done: We have more troops in Iraq. We have more funding for the war. Haliburton has more income, more roles, more people working in Iraq. And more soldiers and Iraqi citizens have died. So yes, things are getting done, all right, it is just that, as per usual, they have nothing to do with what the majority of the voters want. Which tells you, if you'll just think for a moment, why some people don't bother to vote. It also completely breaks your idea that the current state of affairs can be laid at the feet of the non-voting.

The president is doing whatever he wants. He is refusing court orders, continuing his aggression on Iraq, issuing signing statements, ignoring the law, and generally making a hell of a mess. Congress and the Senate won't do squat, as they have repeatedly shown us both prior to and post the recent election. Your laying the responsibility for this mess at the feet of the citizens who don't vote is the ultimate act of bewilderment. It isn't the citizens who have set up this system; it is a relatively small group of political animals with money, power, and access.

However, you are right about one thing, even if only peripherally: The citizens do have the power to stop this bloody mess. As King George III of England found out.

Cuts out savings if you know what you want.

That's all well and good if there are a lot of products on the market that meet your demands, but if your demands are enough that you already know which product you want, this seriously undercuts your ability to save money.

For example, a few years ago, I decided on a specific LCD HDTV (an extravagant purchase that I still regret to this day). At the time, MSRP for the set was $8999. All retail outlets sold it for that price. However, I was able to go online and buy it for only $5499. Had the price floor been set at MSRP or something else favorable to the big retailers, I could've lost thousands of dollars in the purchase.

As an internet shopper, I am pleased by this decision because this will also mean the end of the stupid bargain/rebate/shoparound/missed discount remorse routine.

Yeah, well to nuts to that, my friend. I'd rather know that I missed out on the best deal possible than to know that I never had the opportunity to avoid getting gouged because of legalized price fixing. Besides, price comparison search engines will let you easily get pretty close to the best possible prices out there if you look right. Froogle exists for a reason.

Also, if you're going to argue that the existence of alternate products makes this irrelevant, then you should consider that having to compare alternate products negates the advantage of not having to look around for the best discount. I seriously can't believe, though, that you'd rather everyone be gouged than you feel the remorse of missing out on a sale.

Re:Please explain.

Can't you see how this is bad for consumers?

It is bad for everyone. There are liberty aspects to be concerned with. If I buy something from you, just like a dealer, I own it. You no longer have any say in what I do with it, nor should you. If you do retain a say, then you have not actually sold me the item; only a share in it. Do we really want to support a commerce model that (further) dilutes the concept of ownership?

As near as I can tell, there is very little high level reasoning going on behind these kinds of decisions. Not that I expect such things from a constitutionally errant court that just said a US citizen couldn't display a banner in a public venue.

How the heck?

How did this get tagged slownewsday *before* there were any comments? Are Slashdot now selling tags to partisan groups? If so I wish to buy a large supply of 'thistagisnotatag' tags. Not for any real reason, I just like to confuse people.

Re:

How did this get tagged slownewsday *before* there were any comments?

It's called the "Firehose".

No choice?

By setting minimum prices, manufacturers can build in excess margins for themselves and for their favored retailers -- prices that consumers have no choice but to pay."

Most of the price-fixed stuff like this is crap you don't need anyway, like movies and music (especially music!)

All they're really going to accomplish is to end up devaluing their merchandise, because it will be harder to get rid of excess stock.

Ultimately you DO have a choice, except when purchasing necessity goods from monopolies - and again, that is typically not the purpose of a price floor. Usually it's for crap goods, which are from monopolies (artificial ones) but which you don't need anyway.

You do have a choice: if it's too expensive, don't buy it! And if you want to see the price come down, send a letter (preferrably a handwritten one, unless your writing is illegible) explaining why you didn't buy it, and why you bought their competitor's product.

Re:No choice?

You drive to work everyday because, unlike me, your city does not have good mass transit like AC Transit or BART. Do you not buy gasoline so you can drive to work because it's priced too high? Those are extreme examples

Those are extremely ridiculous examples. The price of gasoline will not change one whit due to this legislation: gasoline prices are already controlled through collusion and price fixing. Big Oil is the world's largest price-fixing cartel. Their day-to-day activities along these lines are illegal practically everywhere... But no one seems to be interested in pissing them off for obvious reasons. There are many competing vendors for milk. Lucerne can tell Safeway that they can't sell their milk below a certain dollar level, but they don't have shit to say about the price of milk from Berkeley Farms. (mooooo)

Those are extreme examples to be sure but consider newegg and TigerDirect. Two web-sites I buy a lot of electronics from. A manufacturer can now tell them that they cannot reduce my price below a set level.

Your price on what? On Hitachi DVD-ROM drives? Buy a ToshibaSamsung. Your price on intel processors? Buy AMD. Your price on a Viewsonic LCD panel? Buy something else.

And if you're not worried about that, consider WalMart! They have to power to force manufacturers to reduce prices. I know this because everytime WalMart says "shit", my Sales and Marketing departments squat and ask, "what color?"

I'm not clear on precisely how this is supposed to be related, because we're concerned about manufacturers raising prices.

They have already killed off the Mom & Pops. With this decision I'm starting to wonder who's next to fall?

I just don't understand how Wal-Mart's ability to drive down prices (which is coupled by a willingness to take all the crappiest product) is supposed to be a threat.

Re:No choice?

You actually hit on the right answer.

This is affecting small groups that cannot negotiate prices directly and can harm them on BEHALF of wal-mart.

Wal-Mart can demand a lower price, something they already do, but smaller groups cannot demand lower prices.

This makes it so that everyone just goes to Wal-Mart because Wal-Mart now has the ability to severely undercut prices while smaller, local groups have to sell them at high prices or not sell them at all. At worse they will even be forced to keep stock that they cannot return because they cannot sell the stock. That is the reason you have sale prices in the first place, it is to get rid of stock that you can't sell at the regular price.

Now they will just have to burn the stuff or something, not sure exactly, but in the end the company that sold it to them got their money already.

I thought price floors already existed ...

I thought companies like Apple or Palm already did this - an iPod shuffle is $79 everywhere for example.

Could somebody elaborate?

Re:I thought price floors already existed ...

Well, it's not "official". You just know, as a retailer, that if you undercut Apple, they're going to be "seriously depleted" when it comes to your next stock order.

But some people seem to think that's okay ...

"no choice but to pay"?

There's always a choice to not buy. No firearms are being directed at heads.

Re:"no choice but to pay"?

The supreme court removed the restriction of retailers from pointing firearms at your head to encourage you to buy.

well

two things come immediately to my mind. the first is that bit there about "prices customers have no choice but to pay" I guess that is true if somebody is selling air or something - and there are no others selling it, but otherwise, that language is completely over blown. customers can choose not to buy it and then either it will go away or the price will come down.
 
second - this ruling seems to allow for more judgment - so that if there is no reason to view that there have been anticompetitive practices, then there is no reason not to let it slide. I think that is good. There should be leeway for reason. Look at what a mess has come from mandatory sentencing. People should be able to look at a situation and let what happens fit a reasonable view of the circumstances - not some inflexible letter of the law approach.

Re:well

It's not overblown.

I'll grant that much of the stuff that this will affect is fluff that people can generally get along without, but depending on the situation, that may not necessarily be the case. Consider some of the indirect players such as patent licensors. Further, what about the people who actually do sell the necessities of life like electric power service? You know those competitive third parties that encourage a level of competition to keep costs lower? What about those people like DelMonte who actually does the packaging for generic-branded products that compete directly with their own brand names?

This sort of price fixing being allowed can truly raise the general cost of living... and the cost of doing business.

The intent of these demonstrably successful laws has been to keep the invisible hand doing its job and preventing underhanded schemers from controlling the market unfairly.

Nothing good will come from this ... or any of the more recent SCOTUS rulings. I was silently cursing the confirmation hearings as they were going on... they should have refused any and all Bush appointees... they did manage to keep one off the bench but they let the others through and now bad things are happening.

Doesn't matter. There's Wal-Mart.

It doesn't really matter. Retail price maintenance was an issue when manufacturers were big and retailers were little. Today, it's the other way round. Wal-Mart can dictate prices to manufacturers.

Might matter for some luxury goods, like the iPhone, but that's about it.

competition on quality and service, not price

There's an argument that this is actually PRO-consumer since it makes it possible for businesses to compete on the basis of quality and service instead of being forced to compete on price alone. Price-only competition is surprisingly corrosive since there really is no middle ground on many things -- even if you're willing to pay a 50% markup for quality (and it really is cheaper to pay 50% more if the product lasts twice as long) there's not enough other people to make it economically viable in most cases. Look at t-shirts. You have really cheap junk at Walmart, shirts from other stores that can't charge much more than Walmart so their quality has also suffered, and the $100 designer shirts. No middle ground with good fabric but no handstitching.

I'm not sure I buy this argument, no pun intended, but the race to the bottom has got to stop. I know it's in Walmart's interest that I need to buy a new tv every two years, but it's not in mine.

(Sidenote: I've never entered Walmart/Sam's Club due to this policy and the way they mistreat their employees. Costco, baby, Costco!)