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The Courts Government Businesses The Almighty Buck United States News

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."
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Ban On Price Floors Abandoned, Internet Prices May Rise

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  • Let me guess... (Score:5, Insightful)

    by Black Parrot ( 19622 ) on Thursday June 28, 2007 @04:47PM (#19681129)

    a 5-4 decision by the US Supreme Court
    Do we need to be told who voted each way?

    • Re: (Score:3, Insightful)

      by epiphani ( 254981 )
      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... (Score:4, Insightful)

        by omeomi ( 675045 ) on Thursday June 28, 2007 @04:54PM (#19681273) Homepage
        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: (Score:3, Informative)

          by ePhil_One ( 634771 )
          Yep, isn't it great that the one branch of government that should be completely apolitical has just become yet another neoconservative-controlled institution?

          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:4, Insightful)

          by badasscat ( 563442 ) <basscadet75@yahoo . c om> on Thursday June 28, 2007 @10:54PM (#19684981)
          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... (Score:5, Insightful)

        by nomadic ( 141991 ) <nomadicworld&gmail,com> on Thursday June 28, 2007 @04:59PM (#19681377) Homepage
        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... (Score:5, Informative)

          by _Sharp'r_ ( 649297 ) <sharper AT booksunderreview DOT com> on Thursday June 28, 2007 @07:03PM (#19683003) Homepage Journal
          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: (Score:3, Insightful)

            by Gulik ( 179693 )
            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.

            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 /. commentary, so you're free to start ignoring me immediately) is that, before the decision, a manufacturer setting a minimum sale price was just flat-out illegal, so nobody cou
          • Re: (Score:3, Informative)

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

            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)

            by tambo ( 310170 ) on Thursday June 28, 2007 @10:48PM (#19684949)
            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... (Score:4, Interesting)

        by N3WBI3 ( 595976 ) on Thursday June 28, 2007 @05:09PM (#19681565) Homepage
        "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: (Score:3, Insightful)

          by nagora ( 177841 )
          many of us are not hopelessly despondent and unhappy with our nation.

          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)

          by Rei ( 128717 ) on Thursday June 28, 2007 @05:25PM (#19681823) Homepage
          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... (Score:4, Informative)

            by Bluesman ( 104513 ) on Thursday June 28, 2007 @05:49PM (#19682239) Homepage
            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... (Score:5, Interesting)

              by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Thursday June 28, 2007 @05:59PM (#19682349) Homepage Journal

              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: (Score:3, Informative)

              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)

              by Rei ( 128717 ) on Thursday June 28, 2007 @06:27PM (#19682623) Homepage
              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: (Score:3, Insightful)

                by MikShapi ( 681808 )
                What you need is to cope with the fact you live in a society where litigation is the national pastime, sport, hobby and status symbol all rolled into one.

                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: (Score:3, Insightful)

          by tthomas48 ( 180798 )
          Yes, they feel sorry for our nation because you make comments like:

          "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)

      by i_like_spam ( 874080 ) on Thursday June 28, 2007 @04:52PM (#19681227) Journal
      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.
    • by aqui ( 472334 ) on Thursday June 28, 2007 @05:49PM (#19682235)
      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).
  • Oh well, MS and other huge multis, must have paid huge fees to get this one to pass, essentially turning the USA into a fascist corporacy. This may sound alarmist, but that is exactly the way things worked in fascist dicatorships.
    • Re: (Score:3, Insightful)

      by StikyPad ( 445176 )
      SC decisions don't pass, they're decided, and implying that the SC was bribed is a serious accusation. It could be argued (weakly, considering that each decision must be explained in writing) that the justices are the tools of the executives who appointed them, who are in turn tools of corporate America.

      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
    • Re: (Score:3, Insightful)

      by secPM_MS ( 1081961 )
      I do not agree with this ruling, but I don't view it as likley to that much impact on me -- I am not brand / image concious. Each manufacturer is and remains free to set its prices. This ruling, allows - in some circumstances - the manufacturer to set a floor price for the consumer. This guarantees the retailer a profit level that they would not have had otherwise. The consumer can buy comparable products from other manufacturers who are more willing to compete on price. If your media device has to be from
  • Please explain. (Score:5, Insightful)

    by x_MeRLiN_x ( 935994 ) on Thursday June 28, 2007 @04:48PM (#19681137) Homepage
    Why is this tagged slownewsday? Is this not something that will in theory affect all internet shoppers?
    • Re: (Score:3, Funny)

      by amyhughes ( 569088 )
      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: (Score:3, Insightful)

      by megaditto ( 982598 )
      No, it should not. There is still competition out there between the manufacturers. Here is an example:

      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
      • by Valdrax ( 32670 ) on Thursday June 28, 2007 @05:33PM (#19681961)
        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. (Score:5, Insightful)

      by mpapet ( 761907 ) on Thursday June 28, 2007 @05:18PM (#19681723) Homepage
      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: (Score:3, Insightful)

        by UncleTogie ( 1004853 ) *

        That's what the legislature is for. That's what your democratically elected officials are for.

        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)

        by fyngyrz ( 762201 ) * on Thursday June 28, 2007 @06:09PM (#19682427) Homepage Journal
        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.

  • by also-rr ( 980579 ) on Thursday June 28, 2007 @04:48PM (#19681141) Homepage
    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: (Score:3, Informative)

      by drinkypoo ( 153816 )

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

      It's called the "Firehose".

    • Only the moderators can tag. I mean, you can type in tags and "sugguest" them to moderators, but the tags arn't automated anymore.
  • No choice? (Score:4, Insightful)

    by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Thursday June 28, 2007 @04:49PM (#19681157) Homepage Journal

    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.

    • Far arguments sake consider:

      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)

        by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Thursday June 28, 2007 @05:09PM (#19681555) Homepage Journal

        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: (Score:3, Insightful)

          by DigiShaman ( 671371 )

          Big Oil is the world's largest price-fixing cartel

          I guess I'm part of the cartel then, because I personally own stock in Big Oil. I'm not alone, millions of other citizens own stock too.

          Also, oil is fungible because the market is global. It's all about selling the black substance to the highest bidder. And guess what! Each time you fill up your gas tank, or purchase a new TV made out of plastics, your collectively BIDDING on the price of the product. That's right, as an American, my purchase is in direct co

      • Re:No choice? (Score:5, Insightful)

        by Buzz_Litebeer ( 539463 ) on Thursday June 28, 2007 @05:12PM (#19681619) Journal
        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.

  • Yet another case of fraud for profit- and I'm sure the libertarians are all for this particular deregulation. It's frauds like these that continue to validate my choice of being against any economic system larger than a small town- at least in the small town, if a product endangers your child, you've got the ability to track down the manufacturer and shoot him.
  • by trampel ( 464001 ) on Thursday June 28, 2007 @04:50PM (#19681167) Homepage
    I thought companies like Apple or Palm already did this - an iPod shuffle is $79 everywhere for example.

    Could somebody elaborate?
  • by rpresser ( 610529 ) <rpresser@@@gmail...com> on Thursday June 28, 2007 @04:50PM (#19681185) Homepage
    There's always a choice to not buy. No firearms are being directed at heads.
  • Price fixing is illegal. These people should crack open a law book.

  • I still haven't upgraded the 512mb of ram in my Macbook. I guess this ruling will allow the memory manufacturers to go back to price gauging. To rephrase my previous comment with a more interesting euphemism; The ruling implies that I'll be sticking with 512mb of ram...
  • well (Score:3, Interesting)

    by stoolpigeon ( 454276 ) * <bittercode@gmail> on Thursday June 28, 2007 @04:52PM (#19681237) Homepage Journal
    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 (Score:4, Informative)

      by erroneus ( 253617 ) on Thursday June 28, 2007 @05:12PM (#19681613) Homepage
      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.
  • by Animats ( 122034 ) on Thursday June 28, 2007 @04:54PM (#19681283) Homepage

    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.

    • Re: (Score:3, Insightful)

      by Lockejaw ( 955650 )
      Wal-Mart may well negotiate a deal with a manufacturer that lets Wal-Mart (and only Wal-Mart) undercut the manufacturer's price floor. Wal-Mart is a large enough chunk of the retail segment to do that.
  • Counter Wal-mart (Score:3, Insightful)

    by gurps_npc ( 621217 ) on Thursday June 28, 2007 @04:57PM (#19681325) Homepage
    The argument for the ruling is to prevent a single low end seller, (read WALMART) from undercutting everyone else's price, driving everyone out of the business except for them.

    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.

  • prices that consumers have no choice but to pay

    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)

    "....prices that consumers have no choice but to pay...."

    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.
  • by coyote-san ( 38515 ) on Thursday June 28, 2007 @05:02PM (#19681407)
    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!)
  • by jellomizer ( 103300 ) * on Thursday June 28, 2007 @05:11PM (#19681587)
    consumers have no choice but to pay
    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.
    • by Hatta ( 162192 )
      So our options now are either 1) pay higher prices or 2) do without. Whereas before we could pay low prices AND consume more goods. How is this ruling not a bad thing again?
      • Re: (Score:3, Insightful)

        by jellomizer ( 103300 ) *
        You are forgetting, if people don't buy the higher prices the price will drop to market price. Price Floors cause a market surplus. While the company may think it is a good deal because they have higher margins but the truth because of the less quantity in sales will cut on total profit. If you sell 10 goods at $1000.00 vs selling 100 goods at $500.00 $10,000 Gross Profit vs. $50,000 Lets Factor in that the good costs say $100 to product then the Net Profit is $9,000 vs. $40,000. The economics will f
  • by Applekid ( 993327 ) on Thursday June 28, 2007 @05:13PM (#19681623)
    So, presumably, how it would work is:
    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, /.'ers.
  • Countermeasures (Score:3, Insightful)

    by G4from128k ( 686170 ) on Thursday June 28, 2007 @05:17PM (#19681699)
    Although price floors seem like a way to preserve the profits of inefficient retailers, I'm sure that the better retailers will figure out a way around any sort of binding MSRP. These might include:

    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)

    by FlyByPC ( 841016 ) on Thursday June 28, 2007 @05:23PM (#19681787) Homepage
    If US retailers can set price floors, this opens the floodgates even wider for imported products. Except that now, we consumers might not feel compelled to buy domestic -- if artificial price floors are in place for domestic products.

    I would think that forward-thinking domestic manufacturers would actually oppose this one. The real winner here is China!
  • by cfulmer ( 3166 ) on Thursday June 28, 2007 @05:32PM (#19681957) Homepage Journal
    First of all, this only said that there are some cases where vertical price restraints are legal. It did not say that they're all legal. In fact, the opinion listed several situations where they're almost certainly illegal.

    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)

    by Joey7F ( 307495 ) on Thursday June 28, 2007 @05:38PM (#19682057) Homepage Journal
    I know this comes as a shock for people who have no concept of civics or formal logic but...

    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)

    by Ropati ( 111673 ) on Thursday June 28, 2007 @05:45PM (#19682171)
    We can all read the SCOTUS decision: http://www.supremecourtus.gov/opinions/06pdf/06-48 0.pdf [supremecourtus.gov]

    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

           
  • by Enrique1218 ( 603187 ) on Thursday June 28, 2007 @06:14PM (#19682477) Journal

    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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