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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."
...all this pro-business, ultra-conservative ruling is quickly eroding the American way as we know it.
"In the interests of free speech" large companies can buy campaign ads on behalf of a candidate of their choice, and immediately after that, a boy can't hold up a sign that he thinks is humorous simply because there's a potentially underlying endorsement of illegal drug culture? "Free speech as long as it's morally approved" isn't free speech.
As if we aren't there already, but things have really gone wrong when you have to be afraid of your own thoughts. And when one group of people feel the need to control the thoughts of another group of people, guess which group of people ACTUALLY has a problem.
There's always a choice to not buy. No firearms are being directed at heads.
You like to eat don't you? Want to grow all of your food?
Legalizing price fixing is the most shocking piece of US law since Congress passed the torture is AOK bill. It's going to be abused by distributors and manufacturers to screw their smaller competition and you. If you think things are consolidated today, just wait until you see the effects of industry dancing with price floors to eliminate their competition. The results are cascading and multiplicative rather than a simple sum of their parts. It is impossible to imagine any way this will actually create more competition, despite the glib logic given by Kenedy.
First retailers and you will be squeezed. By setting a price floor, distributors can charge retailers more for their goods. Retailers will have to pass the difference on to you and will also have to bear the cost of not being able to dump goods that don't sell. When a retailer makes a mistake now, they are stuck with it and can't sell the goods off at or below cost.
More risks for retailers means a smaller market overall, because they will buy less, but that's just the beginning of a new manufacturer's problems. Price floor distort prices in a way that make monopoly rents easier. Imagine you find a process to make something better than everyone else. When you start making it, the monopolist can drop the floor on your one good while raising it just a little on everything else. New entrants always have less to offer than established businesses, so they won't be able to move their pricing around as well and will be crushed.
The majority thinks the courts can weed this kind of behavior out, but what they are really saying is that they don't care about startups that can't withstand the pressure for as long as an uncertain lawsuit takes. Shame on them!
Price floors create nothing but friction and economic friction is always harmful.
Friends don't help friends install M$ junk.
There have been studies done on this question which demonstrate conclusively that the so-called "liberal" justices have voted as a bloc more often than the so-called "conservative" justices for about the last 25 years. But, as a previous poster said, don't let reality intrude on your fantasies.
...following the principles of Heisenburger's Uncertain Cat...