Ban On Price Floors Abandoned, Internet Prices May Rise 544
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... (Score:5, Insightful)
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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... (Score:4, Insightful)
Yep, isn't it great that the one branch of government that should be completely apolitical has just become yet another neoconservative-controlled institution?
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Nonsense. The lifetime appointment system merely evens out the spikes, its by definition a political body, has been since the early 1800's when it basically appointed itself the role it has now. (I forget the descision, IANAL). The conservatives have been in power for 18 of the last 26 years, why is it any surprise the court is leaning that way? Just
Re:Let me guess... (Score:5, Informative)
Re:Let me guess... (Score:4, Insightful)
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... (Score:5, Insightful)
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.
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Re:Let me guess... (Score:5, Interesting)
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.
here comes the flamebait (Score:3, Insightful)
Re:Let me guess... (Score:4, Insightful)
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
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Re:Let me guess... (Score:5, Insightful)
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... (Score:5, Informative)
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.
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Drat, now I'm going to have to go read the decision, because there can still be a big problem. My understanding (and this is largely from
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The issue is that the court is attempting to re-define the term competition so as to make the market less efficient and undermine capitalism in accordance with current right-wing ideology. The dictionary definition is the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms .
Suppose that I am poor and have $4 to spend on a widge
Re:Let me guess... (Score:5, Insightful)
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... (Score:4, Interesting)
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You should be.
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
Yeah, America's health system is an inspiration to us all. Especially if we're lawyers.
TWW
Re:Let me guess... (Score:5, Informative)
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... (Score:4, Informative)
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... (Score:5, Interesting)
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.
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Second, we live in a competitive country and world.
That's right. I compete with other consumers for access to medications, driving prices up. Businesses compete with each other to get our business, driving prices down. Supply and demand. Except that we've got a patent and legal system that encourages high medication prices.
My primary medication goes "generic" this summer, which means I should be able to get it for significantly less, right?
Wrong.
It's going "generic" in name, only, but a single company (I don't know who, yet) will be given exclusive righ
Re:Let me guess... (Score:5, Interesting)
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
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Prices of US healthcare merely reflect that, and as long as litigation stays an integral part of your national mentality, the price/performance rating of your health-care system isn't going anywhere.
After all, your powers-that-be need to keep those insurance industry margins safe.
Re:Let me guess... (Score:5, Informative)
Re:Let me guess... (Score:4, Insightful)
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There's no link between health spending and life expectancy. Unfortunately, there is a link between beer bashes and life expectancy.
Spend the 15% on Glenlivet or Jameson instead.
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"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."
Because socialized medicine is the only system where people die waiting for treatment. In the US we just deny them, and they die knowing they can't get treatment. I'd prefer waiting with hope, to waiting with none.
Re:Let me guess... (Score:5, Informative)
Justice Breyer wrote the dissent [supremecourtus.gov]. Here's a piece:
They forgot the internet is GLOBAL (Score:4, Interesting)
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#E
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! (Score:5, Insightful)
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! (Score:4, Insightful)
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The people this will hurt most, contrary to the opinion of five SCOTUS justices, are the mom and pop
Huh? Think about this for a moment... (Score:3, Insightful)
Or more likely it will be someone like Sharp saying, "No one can sell the new 65 inch LCD TV for less then $4500 even though it only costs you $2000." I personally bought my 45" Sharp LCD TV for $2700 ($2400+$300 shipping/handling), which was $1200 less then the "retail" price. Now the companie
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Fixed prices, in the USA, gods of capitalism? (Score:2, Insightful)
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Also the idea that prices will rise overall is speculative. Prices can only be fixed in a monopoly, where they're already more or less fixed. When there's competition, price fixing is not an effective str
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Not going to help Wal-Mart, might hurt it. (Score:3, Insightful)
I don't think you're understanding the decision.
Right now, and for the past 90-odd years, it was illegal for a manufacturer to demand or enforce a price floor on its retail distributors.
The USSC said that now, manufacturers can do this. That's the change.
If anything, this is going to hurt Wal-Mart, because it prevents them from using their distribution network and huge size to drive out competition, at least not on brand-name goods.
Example: right now, W
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Please explain. (Score:5, Insightful)
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Okay, mods, don't let me down.
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If Lenovo sets the minimum price for its laptops to $1000 you would still be able to buy laptops from other manufacturers for under $1000.
All the Supreme Court did was establish that the manufacturers can set prices for their own products, not for all the products of the same type across the board. If the manufacturers want to shoot themselves in the foot, let them; the internet outlets should still be able
Cuts out savings if you know what you want. (Score:5, Insightful)
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.
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Re:Please explain. (Score:4, Insightful)
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.
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No. It isn't. It is about the manufacturers being allowed to select dealers on the basis of compliance with policies that set resale prices. There is every reason for a wall between the seller and the buyer that forbids the seller from imposing post-sale conditions on the buyer. You're not looking at the big picture here.
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I will not chip into the freedom to contract to prevent large manufacturers from being stupid.
The problem here is that the both parties in the types of contracts may not actually be "free" to negotiate the terms of the contract. Take a small retailer, for instance. If there are a limited number of brands of an item, in order to be competitive a retailer must stock a good variety of them. Company X says "You must sell our product for Y dollars." The small retailer knows that if they don't stock the product, then people won't come to their store, they will go to the big-box store down the street. The
Re:Please explain. (Score:5, Insightful)
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.
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Be a pal and let THEM know that, would you? As far as I can tell, they stopped listening to individuals over 30 years ago. Voting someone out is an idea, sure, if their successor takes heed of WHY, else you're just trading in for a newer model of Nincompoop...
Re:Please explain. (Score:4, Insightful)
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.
How the heck? (Score:4, Funny)
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It's called the "Firehose".
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No choice? (Score:4, Insightful)
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.
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You have a child. Your wife (or you if you're female) is not producing enough milk. Do you not buy the milk because it's priced too high?
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 to be sure but consider newegg and TigerDirect. Two web-sites I buy a lot of electronics from. A manufacturer can now te
Re:No choice? (Score:4, Insightful)
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)
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.
I'm not clear on precisely how this is supposed to be related, because we're concerned about manufacturers raising prices.
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.
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Re:No choice? (Score:5, Insightful)
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.
Yet another fraud (Score:2)
I thought price floors already existed ... (Score:5, Interesting)
Could somebody elaborate?
Re:I thought price floors already existed ... (Score:5, Interesting)
But some people seem to think that's okay ...
"no choice but to pay"? (Score:4, Insightful)
Re:"no choice but to pay"? (Score:4, Funny)
Price Fixing (Score:2)
Price fixing is illegal. These people should crack open a law book.
Re:Price Fixing (Score:4, Informative)
oh, crap! (Score:2)
well (Score:3, Interesting)
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 (Score:4, Informative)
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
Doesn't matter. There's Wal-Mart. (Score:5, Interesting)
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.
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Counter Wal-mart (Score:3, Insightful)
The argument against the ruling is:
If the rest of the world can't compete with the low end seller, they SHOULD get out of the business. Otherwise we leave crappy, foolish business men in charge and surprise surprise, we can't compete with China's low prices. Of course we can't, we let idiots that have no idea how to run a low priced business run our corporations.
Me, I am against the ruling. There is no reason ever to have a price floor. If you can't compete with Walmart, then find another business.
No choice? (Score:2)
Unless someone has suddenly drafted a law to force us to buy things, I always have the choice to NOT BUY something. How is that not a choice? A producer wants to set a price floor? Fine by me, he can sit there with his "floor" stacked full of goods that no-one will buy.
Unlike OPEC.... (Score:2, Insightful)
No choice but to pay? No way! We also have a choice NOT TO PAY! Unless you can't SURVIVE without a video card, then you do have a choice. And because we have a choice, we can start a massive boycott. But because we lack the organizational skills of ants, WE LOSE.
competition on quality and service, not price (Score:5, Insightful)
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!)
You Consumers are S T U P I D ! (Score:4, Interesting)
Yes you do, you have a choice, you always have a choice. If you feel the price is unfair then DONT BUY THE PRODUCT!!!!! Buy a Used/Refurbished/Experienced Versions of the product, go without find alternative substitutes. Price Floors will only lead to the company selling less units so in order for them to maximize their profit they will need to lower their prices at the market rate. The problem is that consumers are getting very STUPID lately and go crying oh they price fixed the cost of Memory so I am forced to pay extra for memory, Go without society has seemed to function with less then 2 Gigs of ram in the past. If you don't like the price then don't get one. That is why I am not planning on getting an iPhone any time soon, sure it is cool and all, and I would love to get one. But it is to much then what I want to pay for so I won't get one until I could get one at the price I feel is fair. If I don't think the price is fair then I won't get one. But as a Consumer I have a choice. The choice is always don't get it. Except for Food, Shelter, Heat, Water, and Transportation everything else you really have a choice to go without. If to many people go without then the price will go down to the Market point.
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Shortsighted "sky is falling" (Score:5, Interesting)
1. Internet seller sells Item by Manufacturer below MDBP (Manufacturer Demanded Base Price).
2. Manufacturer "bans" this. Since they do not have legal power, they'd ask distributors to stop distributing to that silly sod.
3. Distributors that disobey risk never getting shipments of Item anymore, so they comply.
4. Internet seller doesn't get Item anymore and can't sell them at Low Low Prices (tm).
Hmm... assuming that's how it'd work...
5. Progressive Manufacturer Alpha makes a competing product for Item: Item Alpha. They don't have an MDBP.
6. Distributors carry Item Alpha.
7. Internet seller gets a few lots of Item Alpha.
8. Item Alpha now gets sold at Low Low Prices.
9. Item loses market share to Item Alpha.
If you accept the above as not being very farfetched, then you accept that manufacturers act in their own disinterest by colluding for minimum prices. And that by lifting the ban it doesn't automatically follow that everyone's going to do it.
Even if I'm completely wrong about this, that's still always going to be the grey market from overseas, so, don't get your cheetos in a huddle,
Countermeasures (Score:3, Insightful)
1. Good service: extended hours, trained employees, better inventories, free shipping, free installation, etc.
2. Bundled goodies: accessories, logoed T-shirts, media, etc.
3. Extended 3rd party warrantees
And if the manufacturer says "thou shalt not bundle free stuff," then the retailer only needs to charge a nominal charge for the "separate" item -- say $0.50 for free delivery, installation, and 5 years of 24 hr in-home repair service.
Price is not the only dimension of competition and some would argue that the internet's focus on price competition is one reason retail service has come to suck so bad. The same transparency that lets current web users find the lowest price will let them find the best retailer in a fixed-price environment.
So the end result... (Score:3, Interesting)
I would think that forward-thinking domestic manufacturers would actually oppose this one. The real winner here is China!
Not that big of a deal... (Score:5, Informative)
For the most part, manufacturers don't want to impose price maintenance -- they BENEFIT when their dealers sell at low prices. Why? Well, here's an example: say Apple sells iPods to dealers for $100, sets a retail price of $200, and 5 people buy it. Apple now has $500. Let's say they don't set a retail price, and (because of competition), the retail price stabilizes at $130, and 7 people buy it at the lower price. Apple now has $700. Which one is better for Apple? Both manufacturers and consumers want dealers to make as little profit as they can.
Here's an example why vertical price restraints should not all be illegal: Suppose that you build sailboats, which are somewhat complicated, not many people know a lot about them, and there are a lot of first-time buyers. Your dealers, then, spend a lot of time and money educating the customers, maintaining showrooms, teaching "what to know before you buy your boat" classes, and so on. These things are very expensive, and consumers benefit by having them. The problem, though, is that if one of your dealers does all the education, and another doesn't, the second one will undercut the first one's prices. As a result, customers will go to the first dealer, look at the boats and take the classes, then go buy the cheap boat from the second dealer. Eventually, the first dealer either goes out of business or just stops offering all those extra services. If the manufacturer can set a minimum retail price, he can stop the second dealer from doing this free-riding. Now, the two dealers are still competing with each other, but they're doing it on something other than price -- they're doing it on service. So, consumers may get longer dealer warranties, or dealers may offer free storage or maintenance.
Um...states maybe? (Score:3, Informative)
If A is "No producer can set a minimum retail value for a particular product"
Not A is NOT "A producer MUST set a minimum retail value for a particular product"
All this means is that at the Federal level there is no prohibition against selling goods at a specific price (which incidentally, does not allow for "collusion" between companies; that is still illegal). The State of New York can easily write a law to establish what the Supreme Court struck down.
--Joey
Read the decision (Score:5, Informative)
What it says is not all price flooring is automatically illegal (per se). If the pricing is used to generate services or differentiate the product within a market to be competitive then why not.
What SCOTUS is arguing is that price flooring needs to be decided on it's merits (rule of reason). They say, it is still illegal to have price flooring within a manufacturing cabal. It is also illegal to have price flooring for a monopoly (as if that makes any difference). Generally price flooring is illegal if it is anticompetitive and legal of it is pro-competive.
As to the sale of handbags, anyone can make a handbag and thousands do. In this case the manufacturer had floor pricing to maintain marketing material and consumer cache. This manufacturer wanted a small botique feel to the sale of their products and not a Walmart experience. The retailer in question just wanted to boost sales by under cutting smaller shops and make their margin on volume. The retailer had signed agreements to price floors.
In this case, I too favor the manufacturer. SCOTUS has not thrown out the Sherman act, but merely noted that price flooring in certain circumstances can be OK. I'll still buy handbags at WallyWorld.
Granular decision making: Good
Small hit on the consumer, but a hit (Score:3, Informative)
One should acknowledge that the decision does not allow a price floor to be set amongst competitors in the same market. From the article, the decision allows prices floors to be set as part of the agreement between manufacturers and distributors. The impact may be visible in scenarios where a manufacturer sells its wares though its own direct sales channel and a retail channel. Prices for a specific product will reach parity amoungst all possible sellers. A retailer like Newegg may have to sell some of its wares at higher prices. However, those prices are still regulated by market pressures. If the price floor is above the equilibrium price, the manufacturer stocks are going to go up. In addition, the decision does allow the lower courts to hear complaints about price flooring on a case by case basis. So, the decision is not as damaging as it might seem at first.
I am a little uncomfortable with government policy leaning too pro business especially in the courts. Even the decision [nytimes.com] on campaign finance reform is a little disconcerting. That couple with the Republican block on pro labor laws shows a conservative disregard of the majority will in favor of businesses.
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Courts should be apolitical, in my opinion. That includes the supreme court. And I really don't think the majority of Americans are conservatives. I think the majority of *voting* Americans may be conservatives, probably largely due to the constant argument over abortion and gays. The overall majority of Americans are probably centrist people who don't bother
How can you be apolitical? (Score:3, Insightful)
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You have an interesting definition of "making sense."
Re:Boo Conservative-Majority Supreme Court... (Score:5, Informative)
Basically, it allowed large developers to lower their land acquisition costs. If you want too much for your little slice of heaven, the guys with guns will come and take it away. An erosion of one of the most basic rights in Western civilization.
Re:Boo Conservative-Majority Supreme Court... (Score:5, Insightful)
Let's look at this week (which isn't even over yet).
* Can't sue the government for using your money to fund religious groups, effectively overturning the 1968 precident allowing it -- all under the loophole that it wasn't spending specifically approved by congress, but by the executive branch via funding granted by the congress.
* Corporate ads supporting candidates are free speech, and are protected unless "the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate."
* "Bong Hits For Jesus" isn't free speech, and isn't protected (meaning that schools can now kick people out for saying almost anything that the school doesn't like).
* Efforts to desegregate schools can't look at the race of students. In other words, while a school can't officially be "whites only", it effectively can't be stopped from actually being whites only because the district can't consider race in school assignment and, more critically -- if you go by the majority's wording -- cannot even be monitored to know if they're unofficially skewing a school towards racial segregation. All this despite racial integration proving to be one of the few things in education that significantly improves the average academic scores of an area without a significant increase in funding.
And now, this -- effectively saying, "welcome back, collusion" and gutting the effectiveness of antitrust legislation.
Depressing, depressing.
(I think I missed one of the frustrating early-week ones, too)
Echoes of this administration for years to come. (Score:5, Interesting)
Roberts is a pretty traditional conservative in most (but not all) ways, which can be bad enough, but Alito is just an out and out fascist who believes strongly in no restraints on executive or corporate power. We're going to be feeling the aftershocks of this administration for decades thanks to the both of them.
Keep in mind (Score:3, Informative)
Re: (Score:3, Insightful)
Whoa whoa whoa there. There's no "in other words". The interpretation is left to other judges who may or may not be inclined to institute your "bad case scenario". This is a GOOD ruling which finally removes the purely artificial RACIALLY motivated reason for accepting students. I believe in a meritocracy, even if that means that colleges are full of asians.
P.S.
I'm a moderately smartass white guy.
Re: (Score:3, Insightful)
Ah, you're confusing conservatives with neo-conservatives. Classical conservatives *do* the things you've mentioned in your post. Neo-conservatives *say* those things, and then go off and do whatever stupid things they want...Some people pay enough attention to notice, but everybody else is more worried about how Paris Hilton is doing in prison (or out of prison, as the case may be)...
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"This will only effect retailers in the US right? If price floors are still illegal elsewhere, consumers could still tell they were being gouged and be able to purchase offshore."
Why not - they've offshored the manufacturing already.
This way, you get more incentive to bypass the importer. A FOrd tractor manufactured in China is less than 1/3 the price the Ford - New Holland dealer sells it in the US (same tractor, same assembly line, even same paint scheme). Even after taking into account shipping an
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How much they sell it to someone else for is irrelevant.
If they buy 20 of it for whatever you agree to sell it to them for, what difference does it make if they sell them to someone else for twice that, half that, or even give them away for free?
You made your money regardless.
If you are letting them make their own copies for nothing, and not specifying how much you want them to pay *you* per copy, well, then you are a fool. Dont agree to a percent of wh