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Ban On Price Floors Abandoned, Internet Prices May Rise

Posted by kdawson on from the 96-year-old-precedent dept.

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."

9 of 544 comments (clear)

  1. Let me guess... by Black+Parrot · · Score: 5, Insightful

    a 5-4 decision by the US Supreme Court Do we need to be told who voted each way?

    --
    Sheesh, evil *and* a jerk. -- Jade
    1. Re:Let me guess... by i_like_spam · · Score: 5, Informative
      As with all of the recent 5-4 splits, Justice Kennedy was the swing vote.

      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.
    2. Re:Let me guess... by drinkypoo · · Score: 5, Interesting

      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.

      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.'"
    3. Re:Let me guess... by _Sharp'r_ · · Score: 5, Informative

      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.
    4. Re:Let me guess... by That's+Unpossible! · · Score: 5, Interesting

      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.
    5. Re:Let me guess... by Rei · · Score: 5, Informative

      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..."
  2. I thought price floors already existed ... by trampel · · Score: 5, Interesting

    I thought companies like Apple or Palm already did this - an iPod shuffle is $79 everywhere for example.

    Could somebody elaborate?

    1. Re:I thought price floors already existed ... by Achromatic1978 · · Score: 5, Interesting
      Well, it's not "official". You just know, as a retailer, that if you undercut Apple, they're going to be "seriously depleted" when it comes to your next stock order.

      But some people seem to think that's okay ...

  3. Re:Boo Conservative-Majority Supreme Court... by t0rkm3 · · Score: 5, Informative

    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.