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Ban On Price Floors Abandoned, Internet Prices May Rise
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."
Justice Breyer wrote the dissent. 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.
It's called the "Firehose".
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
These people are rewriting the law book in front of our eyes.
It was a joke! When you give me that look it was a joke.
That was _the_ eminent domain decision. When that decision was made the Court was weighted to the left. It decided that the gov't can take your land and sell it to the highest bidder in the interest of collecting higher taxes.
Basically, it allowed large developers to lower their land acquisition costs. If you want too much for your little slice of heaven, the guys with guns will come and take it away. An erosion of one of the most basic rights in Western civilization.
It's not overblown.
... 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.
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
It has been a well known fact that some companies use their power to fix prices. For example, Oakleys sun glasses absolutely don't budge, you sell their glasses for less than they want and you'll never be able to resell any of their stock ever again. The same is mostly true of apple, where it comes to Ipods and such, their power is in the fact that they are the only producers and they have the distribution to hold products hostage.
Of course I like this in oakleys, because largely as a result of this security oakleys have very good customer service. Unfortunately not all companies carry this through, like apple, their customer service could be very good, but just isn't anything special (I'm not saying its bad, just not particularly good).
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? Justices will choose to step down to allow a politically friendly president replace them on occasion, so that tends to stretch the swing time even longer.
You are in a maze of twisted little posts, all alike.
Marbury v. Madison. The Chief Justice was a Federalist who served a few days under a Federalist president and basically up until 1850 or so under non-Federalists.
Please, for the good of Humanity, vote Obama.
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 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 for this worse care. Check out all of the cited studies linked from that page, too.
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
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.
And why would this be depressing to any American who believes in equal protection of the law, and fairness to everybody?
Why should the color of my skin, or "race" have any bearing on the factors of school admissions? Doesn't that sound like reverse racism, oh sorry, "affirmative action" to you?
As a conservative American, I applaud these decisions by the Supreme Court in reversing the tide of the liberal activism that's been going on the last 30+ years.
Watch me get modded down for simply stating conservative opinions.
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
He did actually win the election, anyway.
Honestly I think he might have LOST, except there's a lot of very retarded individuals who failed to vote properly in Florida.
It's not a complicated form. At all. It's very simple. You're supposed to review it after it's done to make sure things are correct. They not only couldn't get it right the first time, but forgot to review their vote.
That does not entitle them to have their vote counted to what they INTENDED to vote. Once it's done, it's done, and that's that -- blame them for Bush's victory.
Not that anyone will do that, because that means Bush won because the people opposed to him were stupid, stupid to the point of not being able to muster up the wherewithall to vote correctly and keep him out of office. In the Bush-detractor's world, it's the people who DID vote for Bush who are the idiots.. even though they, at least, were able to vote correctly.
In any case, any government seizure of property is something to be abhorred. You can count on never being fairly compensated for it, most definately now that they government can DIRECTLY profit from taking the land. They'll want to maximize their profit margins, you know.
... still waiting for this free-as-in-beer free beer I keep hearing about.
We can all read the SCOTUS decision: http://www.supremecourtus.gov/opinions/06pdf/06-48 0.pdf
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
machinator omnis sine licentia
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.
If moderation could change anything, it would be illegal.
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 rights to manufacture and sell it for six months, before other companies are allowed to join the market. The doctor who related this "good news" to me promptly tried to sell me on the newer, twice-as-potent-so-you-can-take-half-as-much form of the drug, which will be released about the same time as my current medicine goes generic.
My current medicine costs my insurance company $500/mo, and people wonder why Medicare and Medicaid have such an impact on our budget.
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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 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.
.You don't have to be smart to use a Mac, you just have to be smart enough to buy one
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.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
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 widget. The widget maker sells his widgets for $3 a piece to a store that sells them for $5. Now I open up a second store that buys the widgets, also for $3 each. My store competes with the first store. The third party is the guy with $4. I want to sell my widgets that I bought for $3 for a price of $4 to secure his business by offering the most favorable terms.
A price floor of $5 prevents me from doing this. The widget maker is acting independently to secure the business of a third party, the buyer who will pay $5, but is preventing me from competing against the other store by offering the most favorable terms.
This ruling undermines capitalism. It suggests there exists a case where it is more favorable for the buyer to be strictly denied the most favorable terms - the exact case the Sherman act was trying to prevent and the reason we have laws against monopolies.
I've seen a lot of things, but I've never been a witness.
Another myth. Malpractice suits account for 0.46% of our total healthcare expenditures. An interesting observation is that Canada, for example, actually pays out more to plaintiffs than US courts do.
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
Freedom of contract only exists where the playing field is not grossly out of balance. Today's decision, while it may appear to restore freedom to contract, actually threatens it.
Supreme court justices are impeachable too.
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt