C J Campbell wrote:

"Peter" wrote in message
news:yL%bc.182419$_w.1842540@attbi_s53...

MichaelR wrote:


You are half right.
Manufacturers can set _minimum_ sale prices:

http://www.ftc.gov/bc/compguide/question.htm

The above website does not support your assertion. It states:
"If the manufacturer and a dealer entered into an agreement on a resale
price or minimum price, that would be a price-fixing violation. The
agreement could be formal, through a contract, or informal, when the
dealer’s compliance is coerced. However, if the manufacturer has
established a policy that its dealers should not sell below a minimum

price

level, and the dealers have independently decided to follow that policy,
there is no violation."

So a manufacturer coercing a dealer to abide by a minimum sales price
is a violation of price-fixing legislation. But the manufacturer can
suggest a minimum sales price and hope that the dealers abide by it.

If Garmin is telling dealers that they must abide by the minimum price
for the 296 or have their supplies cut off that would constitute
coersion and I expect they would lose in court if Darrel (tvnav) or
other affected dealers decide to fight the policy.


Refusing to deal with a reseller is not considered coercion. The FTC web
site at http://www.ftc.gov/bc/compguide/illegal.htm says:

Resale price maintenance agreements. Vertical price-fixing -- an agreement
between a supplier and a dealer that fixes the minimum resale price of a
product -- is a clear-cut antitrust violation. It also is illegal for a
manufacturer and retailer to agree on a minimum resale price.

The antitrust laws, however, give a manufacturer latitude to adopt a policy
regarding a desired level of resale prices and to deal only with retailers
who independently decide to follow that policy. A manufacturer also is
permitted to stop dealing with a retailer who breaches the manufacturer’s
resale price maintenance policy. That is, the manufacturer can adopt the
policy on a "take it or leave it" basis.

It would make an interesting court case. While true that in general
manufacturers are free to stop dealing with retailers who undercut the
minimum price policy, the courts will apply the "rule of reason" that
takes into account the anti-competitive effects of such an action and the
market share dominance of the manufacturer. Actions by a manufacturer
that dominates the market can be held to be coersive even if the same
actions would be legal for a manufacturer in a more competitive market.
http://www.ftc.gov/speeches/anthony/aliabaps.htm :
"For example, the FTC prevented Nintendo(16) from exercising its Colgate
rights(17) to terminate or suspend retailers that did not comply with its
announced pricing policy. This severe remedy was necessary because Nintendo
commanded 80% of the market and, by virtue of this power, could have
maintained its policy without an agreement because retailers could feel
intim[id]ated."