Supreme Court upholds legality of manufacturers requiring MAP and MARP.

[Cummje]

I don't understand something. If the shops buy products from a manufacturer, then the shop is paying a wholesale price, right? So then, why would the manucturer care how much the product is sold for? They've already made their money from the shop, so what's it to them? Status???

 

[redacted]

I don't understand something. If the shops buy products from a manufacturer, then the shop is paying a wholesale price, right? So then, why would the manucturer care how much the product is sold for? They've already made their money from the shop, so what's it to them? Status???

I believe it allows them to keep the wholesale prices at the level they want. If an authorized dealer started selling $500 regs for $400 then others would have to follow suit or lose business. So shops would then only make $150 on that reg rather than $250. Smaller shops would have to either change product lines or seek wholesale price reductions to maintain their profit levels. And before you know it, open market competition would break loose everywhere to the benefit of the consumers.

 

[vladimir]

I resurrected this thread for an update. Today's Wall Street Journal has an article on the fallout from last year's Supreme Court ruling in Leegin Creative Leather Products v. PSK Inc., which made it harder to prove a minimum retail price agreement was an anti-trust violation. The article is here:

Price-Fixing Makes Comeback
After Supreme Court Ruling

The gist of it is:

Manufacturers are embracing broad new legal powers that amount to a type of price-fixing -- enabling them to set minimum prices on their products and force retailers to refrain from discounting.

Other points:

Critics argue the policies undermine the free market by limiting shoppers' power to decide for themselves whether to, say, buy at rock-bottom price from a no-frills outlet, or pay full price to someone offering better service or other benefits.

State attorneys general are warning that minimum pricing, also known as "resale price maintenance," will feed inflation. Supreme Court Justice Stephen Breyer, in his dissent in the case, estimated that legalizing price-setting could add $300 billion to annual consumer costs.

 

[Catt99]

I resurrected this thread for an update. Today's Wall Street Journal has an article on the fallout from last year's Supreme Court ruling in Leegin Creative Leather Products v. PSK Inc., which made it harder to prove a minimum retail price agreement was an anti-trust violation. The article is here:

Price-Fixing Makes Comeback
After Supreme Court Ruling

The gist of it is:


Other points:

Thanks for resurrecting this old thread. I've only just read the thread and the quotes from WSJ that you excerpted, so I haven't thought about the issue much at all -- and I have no particular expertise in anti-trust law, but it strikes me as an interesting conceptual / philospohical discussion.

I bring my own political biases to the discussion and obviously haven't read the court's decisions let alone the reporter's article describing the perceived aftermath of the decision a year later. If permitting making "rules" in the marketplace by market participants affects the consumer playing field, does allowing the rule-setting to go on at the manufacturer level as opposed to the wholesale or retail level have positive or negative effects on either or both the consumer or supply side? Does the court's decision stimulate or retard competition to deliver products to consumers? Does it make enforcement of other, related, consumer protection provisions more or less effective / disruptive? It's a very interesting issue and one I never really connected with the diving industry directly despite the quirky retail / consumer market situation -- thanks again for bumping.

 

[reefduffer]

Here's a thoughtful very short essay on the subject:
ongoing · Business

Basicly, capitalism is like any powerful tool. I wouldn't want to work without tools, but you can hurt yourself if you don't control them. What it mustn't become is a religion.

 

[jviehe]

I still beleive in my original assessment. Resellers are free to negotiate resale contracts with manufacturers. There are plenty of manufacturers who do not do MARP or MAP, but they dont have as profitable a product, so businesses CHOOSE to deal with companies that do have price fixing. Because this is how to make money, which is the point of doing business. Anytime we can remove govt from business, this is good for everyone.

The retort was that were we not to have laws which force competition by banning competition (ironic) then the manufacturers would band together and control the market...until one didnt, and then got all the business. Thats true competition. Monopolies exists only so long as they serve the customer. With no money, they go out of business.

 

[OldNSalty]

I don't understand something. If the shops buy products from a manufacturer, then the shop is paying a wholesale price, right? So then, why would the manucturer care how much the product is sold for? They've already made their money from the shop, so what's it to them? Status???

Fixed pricing is also part of marketing. If scubapro forces the LDS to sell model X for $600 minimum (and no matter where you look, you can't find it for less then $600) and generic brand reg Y list for $600 but the LDS tells you that they can cut you a deal and sell it for $450 then it makes you question the quality of that product(Y). You will look at the scubapro as being 'worth' $600 and brand y as maybe being 'worth' $450.

Of course, a more informed consumer who has read the reviews of the 2 regs will be less likely to fall for that but some still will and most new consumers will almost always fall for it.

On a side note-how do dive shops that use scubapro discount for package deals? Is this allowed?

 

[Pug211]

Can the supreme court rule on this for oil companies as well?