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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."
I thought companies like Apple or Palm already did this - an iPod shuffle is $79 everywhere for example.
Could somebody elaborate?
It doesn't really matter. Retail price maintenance was an issue when manufacturers were big and retailers were little. Today, it's the other way round. Wal-Mart can dictate prices to manufacturers.
Might matter for some luxury goods, like the iPhone, but that's about it.
So, presumably, how it would work is:
/.'ers.
1. Internet seller sells Item by Manufacturer below MDBP (Manufacturer Demanded Base Price).
2. Manufacturer "bans" this. Since they do not have legal power, they'd ask distributors to stop distributing to that silly sod.
3. Distributors that disobey risk never getting shipments of Item anymore, so they comply.
4. Internet seller doesn't get Item anymore and can't sell them at Low Low Prices (tm).
Hmm... assuming that's how it'd work...
5. Progressive Manufacturer Alpha makes a competing product for Item: Item Alpha. They don't have an MDBP.
6. Distributors carry Item Alpha.
7. Internet seller gets a few lots of Item Alpha.
8. Item Alpha now gets sold at Low Low Prices.
9. Item loses market share to Item Alpha.
If you accept the above as not being very farfetched, then you accept that manufacturers act in their own disinterest by colluding for minimum prices. And that by lifting the ban it doesn't automatically follow that everyone's going to do it.
Even if I'm completely wrong about this, that's still always going to be the grey market from overseas, so, don't get your cheetos in a huddle,
More Twoson than Cupertino
I've believed ever since Samuel Alito was nominated that the single worst legacy of the Bush administration will be nomination of Judges Roberts and Alito to the Supreme Court, and that those nominations will go down as the worst failures of the Democratic Party to display a spine and stand against Bush's radical ideology.
Roberts is a pretty traditional conservative in most (but not all) ways, which can be bad enough, but Alito is just an out and out fascist who believes strongly in no restraints on executive or corporate power. We're going to be feeling the aftershocks of this administration for decades thanks to the both of them.
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
This simply reeks of protectionism for big US manufacturers...
l asticity) will determine what happens as prices rise. In fact artificially high prices may cause additional suppliers to enter the market to compete (an increase in supply) which will cause a surplus of the product which in turn will lead to lower prices as manufactures try to entice consumers to buy. Ultimately unless you impose tariffs or other trade barriers, or all manufacturers collude (and fix prices) the market will solve the problem.
But as any economist will tell you price fixing generally doesn't work well for the economy or consumers as a whole. It may temporarily benefit one industry or sector but is generally undesirable. It is better to let uncompetitive companies face the pressure of competition and either become competitive or go out of business.
If people have a finite amount of money to spend and prices are higher they simply buy less.
They may buy less of different products, for example if the price of gas goes up and people still need to buy the same amount gas, but may not go on vacation or buy a new TV (this is why the price of oil is so important).
Basic concepts of supply and demand (http://en.wikipedia.org/wiki/Supply_and_demand)
drive pricing. Price elasticity (http://en.wikipedia.org/wiki/Supply_and_demand#E
Tariffs and other trade barriers are coming down with globalization, and price fixing involving collusion is highly unlikely between a competitive manufacturer, and an uncompetitive one. The competitive (ie lower cost) manufacture is better off selling at a lower price and taking the business for themselves and putting their competition out of business.
Besides the internet puts global manufacturers within reach of US customers. If prices go up in retail stores in the US because of all US manufacturers setting bottom prices, people will simply buy from outside of the US, and a huge gray import market will open up. At least for high value items, where the difference in price is significant.
If anything this is just one more nail in the coffin of US manufacturing. The legal changes may give them a temporary false sense of security, but realistically companies that fail to please the market (ie consumer) by providing good value simply don't last.
Just think what artificially high CD prices have caused people to do. They've found their music online (legal or otherwise).
Or think region codes and DVDs. Many Europeans buy their DVDs online from the US because they don't want to wait for the European release.
This is no different. Shipping costs are not that high (especially not for large volume gray market imports).
----- "Profanity is the one language that all programmers understand."
Competition reduces prices. What we have here is a case of market manipulation by insurance companies and pharmaceutical companies (among others) which drives up prices and in fact reduces the quality of care because it limits available treatments (insurance companies decide by fiat what they will or won't cover, and most Americans who do have health care get it from their employer and can't afford their own insurance.)
I can actually get dental work done in Mexico, with a reputable dentist who people I know have patronized, for less than the cost of my fucking co-pay here in the states. That includes my round trip flight (sacramento to san diego), and all the week's expenses including booze, transportation, and lodging. And I'm talking about minor work here.
If I get my major work done, I can probably squeeze a month's vacation in Thailand out of the deal (getting the work done there) and still come in under my co-pay. I have two impacted wisdom teeth and they are very large. And that price will include at least an hour of massage every day :P
The health care system is broken here in the US, plain and simple. It has been broken in the name of profits, due to illegal business practices (price fixing, but not this kind of price fixing) engaged in by health care providers, insurance companies, and pharmaceutical companies (the latter being one of the most morally bankrupt industries in existence, probably second only to the military-industrial complex.)
You can tell yourself any lies about it you want, but the fact is that the quality and availability of health care in the US have gone down while prices have gone up.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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.
...). Canada's is too hostile to supplimental insurance. Britain's is too minimal on its basic coverage. Germany's is too convoluted and inefficient. I think France got it pretty close to just right. They're a little too lenient on allowing unneccessary visits, but that's a mistake we could avoid here, and is relatively minor in the scheme of things. And despite the cost of living in France, and the fact that France isn't exactly famed for healthy food, their healthcare costs are less than half of ours and their life expectancy longer.
Read the links on the page that I provided; it goes into treatment of specific diseases and looks at how they fare in the US versus other countries.
Second, we live i.a competitive country and world.
Competition lowers prices.
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.
Have you priced living expenses in Europe lately? Europe, east Asia, and Canada are the nations we're comparing to, so let's look at the world's most expensive cities. London is number two (after Moscow). Copenhagen 6th, Geneva 7th, Zurich 9th, Oslo 10th, Milan 11th, and so on. Seoul is #3, Tokyo #4, and Hong Kong #5. The most expensive city in North America is NYC, and it's only #15. LA, our only other in the top 50, is #42.
American *salaries* are higher than European salaries (although that's changing), but as far as expenses go, Europe is more expensive. The simple fact of the matter is that our healthcare system is overpriced and under-effective, and there are countless studies out there on the subject. Start reading them.
What we need is a system like France's (yes, I know France is a dirty word, but hey
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
You know, you can live in a fantasy world or you can make the most of a situation. Some people live in a world where they can understand that sometimes you have to make a choice that isn't perfect.
Talk about a fantasy world. That's the one where we 3rd party voters only need to make the imperfect choice "sometimes." Give me a break. I make this imperfect choice every election. Yes, it pisses me off. But what happens if 3rd party voters vote instead for one of the big two parties? Nothing. The two big parties are equally corrupt, just in different ways.
And it sure doesn't make sense to convince otherwise reasonable voters that Gore and Bush were fungible.
Hindsight is 20/20, the grass is greener on the other side, and you can't predict the future of America if Al Gore had won. Perhaps instead of dumping our money into the war, we'd be dumping it on further social security and medicare waste, and imposing draconian environmental laws to curb greenhouse gases, economy be damned. You know, people die due to bad economies as well as wars.
In my view, the big parties are one giant party designed to increase their power and decrease ours. One side wants to limit what you. The other side wants to limit what you can do with the money you earn. Both increase taxes and spending and the size of government. Both parties want to infantilize the citizens so that they rely on bigger and bigger government -- which provides them with more power.
So yes, I do blame Nader as a spoiler, and the nuckleheads who helped him along.
You can continue to blame them all you want. I'll continue to vote my conscience. That means I'll be voting for Ron Paul. If he doesn't win, I don't care who wins.
Ironically, the word ironically is often used incorrectly.