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#1
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You are half right.
Manufacturers can set _minimum_ sale prices: http://www.ftc.gov/bc/compguide/question.htm "Will Thompson" wrote in message ... So why is this? Manufacturers *cannot* set actual selling prices, per federal law (Sherman Act and related) so it is strange that they try to impose this barrier. . |
#2
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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. "Will Thompson" wrote in message ... So why is this? Manufacturers *cannot* set actual selling prices, per federal law (Sherman Act and related) so it is strange that they try to impose this barrier. |
#3
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![]() "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. |
#4
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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." |
#5
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![]() 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. Color me stupid, but I don't see a dime's worth of difference between these two practices, except that the second is enforced from the top down, which makes it wose than the first, which could in theory be a mutual agreement. all the best -- Dan Ford email: (put Cubdriver in subject line) The Warbird's Forum www.warbirdforum.com The Piper Cub Forum www.pipercubforum.com Viva Bush! blog www.vivabush.org |
#6
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"Cub Driver" wrote in message
... Color me stupid, but I don't see a dime's worth of difference between these two practices The difference is whether the policy applies to all vendors or just some. |
#7
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Actually, this was settled in the US Supreme Court in 1919. It's called the
Colgate Doctrine. "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. "Will Thompson" wrote in message ... So why is this? Manufacturers *cannot* set actual selling prices, per federal law (Sherman Act and related) so it is strange that they try to impose this barrier. |
#8
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MichaelR wrote:
Actually, this was settled in the US Supreme Court in 1919. It's called the Colgate Doctrine. The Colgate Doctrine doesn't apply to your original assertion that "Manufacturers can set minimum sale prices" since to do that would require an explicit agreement with the dealer and such agreements are illegal. In general the manufacturer would have the right to terminate a dealer from getting products in the future if they sold items below the suggested price. But that doesn't allow them to "set minimum prices" since the dealer is still free to sell his current inventory at as low a price as he chooses. There have also been exceptions to Colgate in cases where the manufacturer dominates the market. Whether Garmin would fall into that category is something the courts would have to decide on the basis of the facts in this particular case. "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. "Will Thompson" wrote in message ... So why is this? Manufacturers *cannot* set actual selling prices, per federal law (Sherman Act and related) so it is strange that they try to impose this barrier. |
#9
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![]() Actually, this was settled in the US Supreme Court in 1919. It's called the Colgate Doctrine. What was settled? That price-fixing was legal? Well, so it was, until the 1950s. When I was in high school, just about everything manufactured item in the U.S. sold for the same price everywhere, city and country. Then the good times started. all the best -- Dan Ford email: (put Cubdriver in subject line) The Warbird's Forum www.warbirdforum.com The Piper Cub Forum www.pipercubforum.com Viva Bush! blog www.vivabush.org |
#10
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It's a fine point in the law, but Garmin can legally announce that they will
only sell to dealers who keep a minimum price on their products. Then, if a dealer undercuts that price, Garmin can stop selling to them. Technically, it's a unilateral decision by Garmin, and an independent decision by each dealer. Since there is not an "agreement", it is not considered to be price-fixing. "Cub Driver" wrote in message ... Actually, this was settled in the US Supreme Court in 1919. It's called the Colgate Doctrine. What was settled? That price-fixing was legal? Well, so it was, until the 1950s. When I was in high school, just about everything manufactured item in the U.S. sold for the same price everywhere, city and country. Then the good times started. all the best -- Dan Ford email: (put Cubdriver in subject line) The Warbird's Forum www.warbirdforum.com The Piper Cub Forum www.pipercubforum.com Viva Bush! blog www.vivabush.org |
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