OP
Once a law is enacted by the US Government, it takes an enormous amount of work, money and pressure to change. No matter how unfair or stupid the law is. This is very seldom achieved. It simply persists.
The endless saga continues...
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Once a law is enacted by the US Government, it takes an enormous amount of work, money and pressure to change. No matter how unfair or stupid the law is. This is very seldom achieved. It simply persists.
SparticleBrane
Contributor
scjoe
Contributor
I think people are getting confused about price fixing and US law. There is no statute that makes it legal, it is an interpretation by the Supreme Court of anti-trust laws that prohibit anti-competitive behavior.
In 1911, the US Supreme Court ruled price fixing was illegal and that was the status of the law until 2007. The fact that manufacturers may have terminated retailers during that period does not mean it was done legally.
All of this changed in 2007, when in a 5 to 4 decision, the court reversed itself. In ruling that price fixing is not automatically illegal, the court relied on the argument by economists that resale price maintenance agreements can promote competition depending on the circumstances. Now, instead of price fixing being automatically illegal, courts must apply a case-by-case approach to assess their impact on competition. That doesn't mean that resale price maintenance agreements are legal in all instances.
The most common argument in favor of price maintenance is to enable a new producer to break into the market by getting retailers to carry its product. Without resale price maintenance the retailers won’t incur the risk of stocking and promoting a new product, or so the argument goes. The theory is more producers equals more competition at the top of the food chain and ultimately consumers benefit. There is also an argument that consumers benefit when retailers who provide product demonstrations and other consumer services are protected from internet based discount pricing.
Of course what we see in the scuba industry is that it is the most established manufacturers that engage in resale price maintenance, not the new guys. There is therefore at least some question as to whether ScubaPro and Aqualung agreements would pass muster under the new law.
In 1911, the US Supreme Court ruled price fixing was illegal and that was the status of the law until 2007. The fact that manufacturers may have terminated retailers during that period does not mean it was done legally.
All of this changed in 2007, when in a 5 to 4 decision, the court reversed itself. In ruling that price fixing is not automatically illegal, the court relied on the argument by economists that resale price maintenance agreements can promote competition depending on the circumstances. Now, instead of price fixing being automatically illegal, courts must apply a case-by-case approach to assess their impact on competition. That doesn't mean that resale price maintenance agreements are legal in all instances.
The most common argument in favor of price maintenance is to enable a new producer to break into the market by getting retailers to carry its product. Without resale price maintenance the retailers won’t incur the risk of stocking and promoting a new product, or so the argument goes. The theory is more producers equals more competition at the top of the food chain and ultimately consumers benefit. There is also an argument that consumers benefit when retailers who provide product demonstrations and other consumer services are protected from internet based discount pricing.
Of course what we see in the scuba industry is that it is the most established manufacturers that engage in resale price maintenance, not the new guys. There is therefore at least some question as to whether ScubaPro and Aqualung agreements would pass muster under the new law.
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The only past case I know of involved ScubaPro, Bailey Suits and NASDS in California; and they were guilty.
scjoe
Contributor
I should clarify that resale price maintenance is a form of vertical price fixing. Horizontal price fixing is when competitors at the same level agree to set prices. That is still illegal. Also, the 2007 case was an interpretation of federal law. States also have their own anti-trust laws that manufacturers have to contend with.
One way companies get around the prohibition on resale price maintenance is to only “suggest” a retail price and announce they will not do business with discounters. That is permissible because there is no “agreement” to set prices and companies are free to choose their distributors. The problem becomes in deciding when the suggestion has become a coerced agreement through policing or other activities. This can occur when a salesman simply confronts a distributor, asks him comply and the distributor “agrees.” Since 2007, if there is an agreement, it is not automatically illegal under federal law.
One way companies get around the prohibition on resale price maintenance is to only “suggest” a retail price and announce they will not do business with discounters. That is permissible because there is no “agreement” to set prices and companies are free to choose their distributors. The problem becomes in deciding when the suggestion has become a coerced agreement through policing or other activities. This can occur when a salesman simply confronts a distributor, asks him comply and the distributor “agrees.” Since 2007, if there is an agreement, it is not automatically illegal under federal law.
Heheheh, here's an interesting take on this issue from another angle.
According to this article, making a purchase in person at a local store may do more harm to the environment than buying online.
Being that the dive industry advocates environmental protection more than any other sport I can think of, perhaps we should start suggesting that all divers have a moral obligation to purchase from the most ecologically friendly source.
"If you buy from your LDS, what will you do when there's no longer an ocean to dive in?"
Eat crap air fill argument!
-B
According to this article, making a purchase in person at a local store may do more harm to the environment than buying online.
Being that the dive industry advocates environmental protection more than any other sport I can think of, perhaps we should start suggesting that all divers have a moral obligation to purchase from the most ecologically friendly source.
"If you buy from your LDS, what will you do when there's no longer an ocean to dive in?"
Eat crap air fill argument!
-B
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